Department of Science and Technology on its 1st Quarter 2016/17 performance

Meeting report

Briefing: Department of Science and Technology (DST)

Mr Imraan Patel, Deputy Director General (DDG): Socio-Economic Innovation Partnerships, Department of Science and Technology (DST) said the policy mandate of the DST arose from the 1996 White Paper and the key was to examine how the DST outputs and outcomes were targeted to ensure that science and technology could play a driving force in enhancing productivity, economic growth and socio-economic development.

The DST had continued to contribute to key government outcomes in the current financial year. In addition to those outcomes, the DST was quite involved in advancing some of the fast result delivery programmes, or “phakisas”, linked to some of the government outcomes. For an example, there had been a big focus on the oceans economy, and the DST was providing support to this economy, while last year it had completed the mining phakisa. It was also providing support to the education and information communication technology (ITC) phakisa. There was a new phakisa planned on agriculture, and the DST was playing an important role in linking up support and interventions in that area.

The DST’s strategic outcome-oriented goals for the five year plan remained:

• A responsive, coordinated and efficient National System of Innovation (NSI).
• Increased knowledge generation.
• Human capital development.
• Using knowledge for economic development.
• Knowledge utilisation for inclusive development.

In the first quarter, the DST had a total of 41 targets across the five programmes, and had achieved 61% of the planned output targets, while 39% of the planned output targets were not achieved.

Achieved Targets

The first strategic goal was to create a responsive, coordinated and efficient NSI. A new framework for science and technology cooperation with other government departments had been taken to the Executive Committee (EXCO), and this had been approved and implemented. There had been positive feedback received regarding this framework. The DST had asked other government departments to identify a focal point that could coordinate on behalf of departments to strengthen high level coordination. The framework also tried to develop a coordination of government departments, depending on how close the departments were, to the work of the DST. The DST had created a six-monthly reporting cycle to their own executive committee on where they were in terms of cooperation, what issues had been raised, and how these had been resolved.

 

The second key development in terms of building a responsive, coordinated and efficient NSI was the research and development (R&D) tax incentive. There were a number of dimensions to this incentive, including the on-going challenges to ensure an efficient administration. There were also more strategic policy issues around whether the incentive was working as best as it could, and ultimately improving it. The Minister had put a task team together between government, some academics and industry, to conduct a review around the key challenges with regard to the R&D tax incentive and to highlight what needed to be done. The work had been completed and the DST had finalised the report and was now looking at how to take some of the recommendations forward. The DST would be returning to the Committee in the next few months with the performance report, as required by legislation on the R&D tax incentive, and would be providing more detail on the content of the government task team.

The third key highlight was the indicator work, which was an important part of the DST’s work. Part of this was the on-going role of the Centre for Science, Technology and Innovation Indicators (CeSTII) at the Human Sciences Research Council (HSRC). There were some challenges in this area, and the DST had now mapped and clarified the responsibility of CeSTII and a strategy had been put in place to rebuild its capacity, including the appointment of a new head of the Centre who would be starting on 1 November.

In terms of information as a basis for a responsive, coordinated and efficient NSI, the National Advisory Council on Innovation (NACI) had been given the responsibility to look at a national science and technology information portal, where they would be able to pull information from a number of areas into a single place. This would allow all stakeholders, including the Portfolio Committee, to look at what was happening in science and technology systems and to use the information as a basis for improvement. In the last quarter, gains have been made on this and work had started on scoping the information portal with a scoping workshop that had been held on 20 June 2016.

In terms of partnerships and collaborations, the DST had worked with a number of government departments, agencies and entities.

One of commitments for year, which had been made in the State of the Nation Address (SONA), was around a Sovereign Innovation Fund, which the DST was leading on. The idea behind this fund was to catalyse a gap in the DST’s funding system. The DST had been working with the Departments of Trade and Industry (DTI) and Small Business Development (SBD), and National Treasury in advancing this concept, and to try to put it in place as soon as possible.

The partnership with business had become increasingly important, and significant progress had been made on a quarterly basis. Some of the more notable partnerships were with the Da Vinci TT100 Institute, and specifically the Black Business Council (BBC), who were keen to look at some of the ways in which more advanced technologies could be taken forward, as this helped with commercialisation. There had been a recent workshop on sanitation technology.

Knowledge generation dealt with research and infrastructure, and some important progress had been made with the National Integrated Cyberinfrastructure System (NICIS), which was a long term project to enhance abilities to use data. As part of the NICIS project, some systems had been developed. The last quarter had seen the development of a new framework for cyberinfrastructure, to create secondary level data nodes. e-Science was becoming a science on its own and required skilled people, and the DST was in the process of creating post-graduate teaching and training platforms.

An important milestone had been reached in the last quarter with the Square Kilometer Array (SKA).. With the four operational MeerKAT dishes, scientists had been able to produce an image of the universe that had received international coverage. The quality of the image had placed the SKA as an outstanding facility, and the image had exceeded expectations.

There had been a process of public engagement and consultation regarding the regulations for the Karoo Central Astronomy Advantage Areas (KCAAA),. As part of the effort to ensure support and buy in, the Minister had granted an extension for the public consultation process.

As part of the DST’s work to deal with long-term human capital and research infrastructure needs, programme 4 had been on an on-going basis, doing modelling work to ascertain what it would take to achieve some of its objectives. This modelling work had been presented to EXCO in April.

For infrastructure support, the DST had put the Strategic Research Equipment Programme (SREP) in place to address the limitations of the National Equipment Programme (NEP) which was a competitive grant programme. The NEP had lifted the seeding level from R10 million to R35 million.

In terms of human capital development (HCD), the Minister had launched the second set of bilateral cooperation agreements in May 2016. The partnership between the UK and SA jointly identified bilateral chairs. The research chairs were now in place.

Modelling had been done on bursaries support in respect of what it would take to achieve the national development plan (NDP) targets for producing PhDs. This would require more effort and identification, taking into account the generic requirements of the tertiary education system.

Highlights in using knowledge and innovation for economic development had included hydrogen and energy work. There were two tracks, one being thin film solar panels, and the other one was on fuel cells. In terms of thin film solar panels, the company that had been established with this technology had participated in the  Department of Energy’s Northern Cape expression of interest to provide 1.5 GW of concentrated solar power as part of the Renewable Energy Independent Power Producer Procurement Programme (REIPPP). The company, PTiP Innovations, had also been successful in providing this thin film solar technology to some of the tourist sites, like the Kruger National Park, based on a Department of Tourism call for moving towards more renewable energies. The DST was working with Gauteng Province around generating energy for self-consumption. In terms of the fuel cell work, the spin-off company that had been established between the University of Cape Town and Mintek had made its first sales of platinum-based fuel cell components to an international customer in May 2016.

Hydrogen SA (HySA) continued to make additional gains, some of which had been to put the programme on a more sound footing from a governance and institutional perspective. An achieved milestone was that there was now a HySA programme office which was responsible for strategically driving the hydrogen work. This unit would be incubated at Mintek over the next three years.

In terms of bio-innovation work, an important area had been the agri-innovation hubs which were linked to the broader agricultural development project. In terms of the industry, the DST was looking at bio materials and bio refinery work. The Bio Manufacturing Industry Development Centre had been formally launched, with its facilities aimed at supporting Small and Medium Enterprises (SMEs).

In the field of Information and Communication Technology (ICT), one of the areas identified in the Minister’s budget vote speech had been to look at expanding the mobile lab (mLab) model beyond Gauteng and the Western Cape. That work was under way, and discussions had been had with the Northern Cape, Limpopo and KwaZulu-Natal. There had also been progress in terms of ICT security, which underpinned a lot of government efforts. Many important gains had been made at the CSIR, which allowed for better scans of fingerprints, which was safer. The DST was working with the Department of Health in terms of the budget support programme.

Highlights of international resources outputs showed that gains had been made with a number of partners. The DST had concluded an agriculture, fisheries and forestry partnership with the French Embassy. A similar relationship had been signed with United States Aid for International Development (USAID), to look at advancing development. The European Union (EU) had a continued strong focus on marine research partnerships, as part of the commitment to the Oceans Phakisa. Food and nutrition in an African context was a process that had run for a couple of years, and South Africa had played an important role to craft an Africa-EU research and innovation partnership on food and nutrition security. From a science policy perspective, there had been a series of workshops with the University of Sussex and the Science Policy Research Unit (SPRU) on how innovation policies were changing globally.

In terms of bilateral engagements, the BRICS relationship remained important, and there was now a formalised framework for looking at cooperation at the BRICS level.

Mr Patel said the DST had five programmes, and achievements in the first quarter had varied from 33% to 88%.

In Programme 1, which was to conduct the overall management and administration of the Department, some of the targets in filling vacancies had been achieved. There was a current moratorium on filling vacancies, and it had become increasingly difficult to achieve this target. The DST had maintained its record of paying suppliers within 30 days of receipt of invoices. Regarding weaknesses identified in terms of IT governance, the enterprise architecture system had been a performance indicator and a couple of upgrades had been done with some of the important IT systems. There had been successful public participation programmes, of which two had been completed in the last quarter out of the ten that had been targeted for the year. There had been an increased focus on media articles, with nine already having been done in the quarter against a target of four, with a projected target of sixteen for the year.

In Programme 2, which was called technology innovation, the purpose was to enable research and development in strategic and emerging focus areas to support commercialisation. One of the indicators was evaluation and assessment reports that informed policy around key technology areas. Two evaluation reports had been planned, and these were both done.

Programme 3 was the International Cooperation and Resources Unit, where there had been a focus on the African Union (AU) and the Southern African Development Community (SADC). The target was to facilitate ten science, technology and innovation (STI) initiatives by the end of the financial year, and in quarter one the DST had managed to achieve five. A lot of these AU and SADC initiatives took many years, and there had been a big focus on getting this in place. There had been a series of international partner organisations which had collaborated, with an annual target of collaborating with 450 international partners. The target for the first quarter had been collaboration with 50 international partners, and the achievement had been 79 collaborations. In terms of international funds invested in African regional and continental research programmes, there was an annual target of R70 million. These targets depended on where the particular projects were, and how soon they could be formalised. The first quarter target was modest, at R5 million, which had been exceeded.

Programme 4 was the Research Development and Support programme, which was responsible for the human development and research infrastructure development work. The quarter one target had focused on graduates and students placed in DST-funded work preparation programmes in Science, Engineering, Technology and Innovation (SETI) institutions. It was an important programme for providing graduates and students with work experience. The annual target was 840, and these were internships that lasted a year. For the first quarter, the target had been 700, and the DST had managed to place 733 graduates and students in these programmes across the SETI institutions. The DST provided bursaries to the National Research Foundation (NRF) and DST-managed programmes, with an annual target of 10 996 students. The quarter one target had been 5 498, with an achieved outcome of 5 744 students.

Programme 5 looked at supporting the particular growth and development priorities of other government departments. One of the indicators for achievement was knowledge products, which helped people to think about how science and technology could be used. The quarter one target was to identify the knowledge products that had been produced, and five topics had been identified which would hopefully be produced by the end of the financial year:

• A policy brief on algae-based waste water treatment works as an alternative cost effective technology for rural environments.
• A case study on the entrepreneurial opportunities in technology transfer -- the case of Young Agricultural Graduates as Knowledge Brokers.
• A case study on STI for transformative livelihoods in distressed district municipalities: Limpopo.
• A case study on STI for transformative livelihoods in distressed district municipalities: Eastern Cape.
• Promoting a policy for inclusive development.

Regarding the seven decision-support interventions, the progress had been on learning interventions, and the quarter one target had been achieved. The DST continued to fund some important decision-support systems. It had also introduced a new manner of sanitation, which was a tool that was used to help people assess the performance of different sanitation technologies.

The DST would be facilitating a number of learning interventions. It was doing its bit to address one of the key and primary challenges in the country, which was youth unemployment. There was also an internship programme which was not necessarily for graduates in areas related to design, manufacturing and product development. The target had been 150 interns, and 192 interns had been supported, with many of them working in companies with DST’s technology stations. In terms of knowledge and innovation products, the target for the first quarter had been to sit with entities and get a sense of what was in the pipeline. The DST had been able to get three products to add to its portfolio by 30 June. The DST did work to support provinces and local government in terms of developing and implementing a stronger innovation agenda. By the end of the financial year, the DST had continued working with the Regional Innovation Forum of the Western Cape on joint areas of interest as well as with the Regional Innovation Hub at the Nelson Mandela Metropole University (NMMU) to look at how to enhance innovation in the Eastern Cape.

Targets not achieved

The DST was still experiencing some weaknesses in terms of how to take an annual target and break it down into quarterly targets or adequate milestones that allowed for proper tracking. Classifications of reasons for non-achievement of targets included process delays, administrative delays and the ineffectiveness of implementers. In some projects, the reality was that there had been unforeseen instances which had impacted on performance. The DST’s risk management system had allowed it to pick these up early so that it could address the challenges with the entities as quickly as possible.

The quarter one target for disclosures reported by publicly funded institutions had been 120, with an achievement of 106 due to some institutions not submitting their biannual reports. The DST had been told that the entities would catch up in the remaining three quarters of the year. Similarly, there had been four regulatory recommendations targeted for the first quarter, but the DST had received fewer permit applications due to the drought, and could not do field trials. In terms of the EU and other partnerships, R60 million had been targeted for international funds directly invested in research, innovation and STI human capital development programmes, and the DST was still awaiting evidence from international partners as part of the internal audit requirements. Most of the indicators that were associated with international work related to the DST’s cooperation with international partners. A lot of these were new indicators that had been improved, based on previous experiences.

In Programme 4, the target of 1 568 PhD students had been exceeded, to a level of about 2 100 students -- but the DST was still consolidating the outstanding evidence from the NRF. A similar issue applied to the researchers who had been awarded research grants through the NRF, where 810 researchers had been awarded grants, with evidence to validate this. Many more had been awarded, but evidence from the NRF was still outstanding. The idea had been to have 30 of the MeerKAT antennas installed by the end of June 2016. The actual achievement had been 23 in total, and part of the reason was due to a problem that had been identified with a previous antenna. The decision had been not to chase this target but to fix the problem and to ensure it had been corrected for the new antennae, and that had been done.

In Programme 5, there had been a target of 250 masters and doctoral students in specific niche areas by the end of the first quarter, and an achievement of 236 could be reported with evidence. Some would make up the numbers in some programmes where there were difficulties. There was a target for technologies in the green economy, where some technologies had been identified but some corrective action needed to be taken. These projects were reliant on international partners to provide funding, which they had not yet provided. The target on the 90-day turnaround time for the tax incentive -- where the target for the first quarter had been 150 days -- had not been achieved due to the focus on the backlog.

Financial Performance Information

The budget split by programme showed that Programme 4 took the largest split, at 56% of the total budget, with Programme 5 receiving the second largest allocation, at 24%. The budget split by economic classification had the bulk of the budget with transfer payments at 93%, goods and services accounting for 2.7%, and compensation of employees at 4.2%. In the short term, there was a need to enhance some IT systems.

 

The plan had been to spend 17.6% of the budget in the first quarter, and the 18% which had been spent was within the National Treasury guidelines. There were no major concerns with respect to spending by programme.

In summary, the innovation chasm issue remained important and a lot more time was being spent looking at partnerships across the board, with a much bigger focus on the private sector. The plan was to also have high level round table discussions with entrepreneurs and company executives in financial institutions. These were important long-term efforts to enhance what had been done. The DST had emerging work with the BBC specifically to ensure that in the Black Industrialist Programme, there was evidence that the DST was creating industrialists based on the new technologies.

Discussion

Mr N Koornhof (ANC) asked if, in terms of the evidence outstanding from international partners, it was the same international partners, or if they were different international partners. Who would own the capital assets and the land in the end -- would it be the Department of Public Works, or was it a partnership like a Special Purpose Vehicle (SPV). 

Mr M Kekana (ANC) commended the DST report, and asked how the DST was going to recover the unachieved targets and how those would impact the Department. He requested that future reports should be structured to talk less about percentages and to focus on unpacking everything, as this was a Committee briefing.

The Chairperson referred to the 198 awarded research chairs, and asked how many of those were to women and young people. Regarding the issue of the Cyber-Infrastructure Framework, she asked how far the DST had engaged or partnered as part of the inter-departmental relationship with the Department of Telecommunication and Postal Services (DTPS), as most issues around cyber security were with the DTPS. Did the 150 fully funded interns get absorbed into the DTS, or were they assisted to be attached to other areas requiring the same competencies? In quarter one, three MeerKat dishes had been installed, and the issue had been around a screw -- did that mean that the entire project was on hold until the screws were received, to ensure that the rest of the targeted 32 dishes were installed? Had the 93.1% of the financial performance budget by economic classification, which pertained to transfer payments, been paid within 30 days as required? If not, what were the reasons?

Ms A Tuck (ANC) asked what had been the circumstances that had resulted in process delays involving factors which were outside the control of the DST. How would the DST get on top of them?

DST’s Response

Mr Patel responded that there were a variety of international partners. He gave an example of the various partnerships, like the agreements with the EU and the bilateral partnership with the UK. He said the programmes were part of agreements for joint projects in terms of data collection. The DST worked very closely with the NRF as a facility which managed the information on an on-going basis. The partnerships were not only with countries, but with other types of organisations like the Bill and Melinda Gates Foundation. In each of these partnerships, the targets were quite different.

In terms of the capital assets -- for example, with regard to the SKA -- the money for the infrastructure was moved to the NRF which managed the programme, and therefore the asset appeared on the NRF register. The NRF would then set up an office which became an SPV. Part of the DST’s contribution would be a discussion around some of those assets. For the National Equipment Programme (NEP), the DST provides funding to the NRF which issues a call and the universities apply for the equipment. The funding agreement would make provision for the recording of an asset in the asset register of the university. The infrastructure in the HySA project would be part of the institution managing the project and if it moved into a spin-off company, then part of the process would be to move the asset into the register of that company.  The arrangements with assets were quite variable. The same occurred with the ownership of the land.

The DST would provide more details on what the achieved and unachieved targets were, as well as information on continuous improvements. This information had been provided at the level of the Executive Committee with the Minister.

Regarding cyber security, the DST was part of an international partnership which also affected private industry. Under the leadership of some of the security cluster departments, a structure had been created to look at cyber security holistically, with each government department identified as having certain responsibilities. The responsibility of the DST was around cyber security research and development. Every country was required to have a cyber security research and development response centre to communicate with other centres, but this was not the responsibility of the DST though it assisted with some of the research. The DTPS was not fully responsible for cyber security, but rather for cyber infrastructure.

The 32 MeerKAT dishes targeted for the year would still be achieved. The project was not at risk.

The 30-days timeframe for transfer payments related to two types of transfer payments. The one was Parliamentary grants to institutions, and the other was for specific contracts. The specific contracts did not work on a 30-day cycle, as the institutions needed to send a proposal and once that had been agreed upon, a contract would be signed with specific funding cycles for three years.

The process delays outside the control of the Department occurred because entities sometimes did not submit documentation for the relevant financial year, and sometimes they had personnel changes which delayed the submission of reports. At times, the negotiations around new programmes and proposals took a lot longer to negotiate.

Ms Tuck wanted to know what the selection process for the interns was, and how interns were selected.

Dr Phetiwe Matutu, Acting Deputy Director General (DDG): Research Development, DST, responded to the question raised around research chairs. She said these were the people considered to be top researchers in their areas of expertise, and there were 198 research chairs awarded, of which 40% were female. The DST had arrived at that target because of the Minister’s innovation-specific call for women only. In terms of race, 74% of the research chairs were white and 26% were black. There was no data currently in terms of age. 70% of the research chairs were from South Africa, and 30% come from abroad.

Ms Matutu said the 32 MeerKAT dishes had been completed by the end of June 2016, but it had been established that there was a faulty component in the drive mechanism. The manufacturer had agreed to replace this component at its cost, which was why the DST was reporting on a number that was far less than what was required.

The DST interns were placed at a number of institutions, with a few private institutions and a substantial number of public institutions. These were people who held diplomas and degrees up to masters level. About 60% of the interns were absorbed within three months of completing their internships. About 20% of the interns pursued further studies, as they were prioritised on bursary provision with the NRF. The internships were advertised after the institutions had provided their needs, and thereafter a call was made in national newspapers, prescribing exactly what was required. Once the applications were received, the selections took place. About 82% of the interns were black and 18% were white. The DST paid the stipends for the interns.

Mr Patel added that the interns around the 150 target were linked to the technology stations in other programmes. The technology stations identified the students, based on the host university. These students required a period of experiential training and were therefore selected by the technology stations.

Ms Pretty Makukule, Chief Financial Officer (CFO), DST confirmed that the R2.3 million budgeted to capital assets was linked only to tools of the trade, like the furniture, laptops and software. In cases where money had not been transferred as per the contract, this would be where the money was being withheld due to the outstanding portfolio of evidence by the bidding agency, or due to contractual issues not being finalised.  The payments were processed as and when the contractual obligations were met.

Mr Tommy Makhode, Deputy Director General (DDG): Institution and Support, DST, added that any report that was presented to the Committee went through a number of internal processes beforehand. It firstly went to the monitoring and evaluation (M&E) unit, which verified the information provided on the programmes. From there, it moved to the DST’s internal audit to verify the information. A lot of the programmes would be achieved in the second quarter, as the outstanding evidence would be accounted for.

The meeting was adjourned.