The Department of Science and Technology (DST) had a bigger role to play within the context of South Africa, especially in the economic space, and its White Paper would explore how it would reposition itself to be able to play a meaningful role and direct the future economic growth of the country, either through industrialisation or beneficiation. This was made clear by the Minister in her overview to the Committee ahead of the Department’s presentation of its annual performance plan.
Looking at what the World Bank had released in respect of South Africa’s economic outlook, what was being projected in the National Development Plan (NDP) could not be achieved. Initially, South Africa had projected around 5% of economic growth. However, for it to have a turnaround in economic growth and employment, it needed 8% of economic growth. One of the critical issues involved innovation, and paying particular attention to innovation would assist South Africa.
There was a need for the DST to push rigorously and aggressively for an investment in research and development (R&D) for South African economic growth to happen. The current allocation or spending of the country across both government and the private sector was at a level which was not sustainable. Let it not be a fact that when the country faced economic difficulties, the first thing to cut was research and development, because it impacted on future growth.
There were environmental issues that the DST needed to take cognisance of when dealing with issues of transformation. Without the inclusion of the majority in the mainstream economy, the economic growth and development of the country, as well as stability, were not sustainable. Transformation must be an agenda that was consciously and deliberately driven. Access to science and technology, information and activities for rural and township communities, remained a critical path that the DST had to take as a Department and with its entities.
The Minister said she was concerned about the financial sustainability of the Council for Scientific and Industrial Research (CSIR) and the Human Sciences Research Council (HSRC). With its responsibility for poverty alleviation and a reduction in inequality, the HSRC was doing an important job. The CSIR, in terms of its work, was also doing very well, but how it ran its projects, and its reporting and funds management, would be looked into. Their financial sustainability was critical for the DST.
Members were generally concerned about the timeline for the White Paper and issues to do with the DST’s constrained budget. They referred to the State of the Nation Address (SONA) comments by the President, who had said the prosperity of a nation depended on its ability to take advantage of rapid technological changes, and asked if the Department was working with that in mind.
Ms Mmamaloko Kubayi, Minister of Science and Technology, said the annual performance plan (APP) was tabled before the Speaker, as required by law, together with the budget for approval by Parliament. It was linked to what had been done over the years by the government to ensure a level of stability and certainty which had contributed to the flourishing of the Committee and the successes in the implementation of the 2006 White Paper. Together with the amendments to the Science and Technology Laws Amendment Bill that would be coming before the Committee, the Department would be coming with a review of the Decadal Plan.
She referred to the renewal of the Director General’s (DG’s) contract with effect from 1 April 2018 for three years. She appreciated his knowledge and expertise, as well as his good stewardship in directing the portfolio as the accounting officer, and his supervision over the DST team.
What the Department sought to achieve in the White Paper was to ensure that there was policy certainty going forward, and the review process would allow proper reflection of the current environment and where the DST wanted to go. This would obviously be building on the successes and work that had been done. The process of reviewing the legislation, as well as the policy, was to ensure that the DST synchronised its work. Policy certainty arose when everybody knew where to find what, with a document that gave direction and synchronised the work under way. The DST had a bigger role to play within the context of South Africa, especially in the economic space. The White Paper would explore how the DST would reposition itself to be able to play a key and meaningful role and direct the future economic growth of the country, either through industrialisation or beneficiation.
Looking at what the World Bank had released in respect of South Africa’s economic outlook, what was being projected in the National Development Plan (NDP) could not be achieved. It had raised the question of what challenges South Africa could face for it to be able to achieve what it wanted. Initially, South Africa had projected around 5% of economic growth. However, for South Africa to have a turnaround in economic growth and employment, South Africa needed 8% of economic growth. One of the critical issues involved innovation, and paying particular attention to innovation would assist South Africa. The DST should be able to reflect objectively. This would be tabled in line with BRICS (Brazil-Russia-India-China-South Africa) and the hosting of Southern African Development Community (SADC) ministerial meetings, at which the Department would bring forth and showcase what South Africa was doing, what it had the potential to do, and most of the work around the partnership.
There were environmental issues that the DST needed to take cognisance of when dealing with issues of transformation. Without the inclusion of the majority in the mainstream economy, the economic growth and development of the country, as well as stability, were not sustainable. Transformation must be an agenda that was consciously and deliberately driven. Access to science and technology, information and activities for rural and township communities, remained a critical path that the DST had to take as a Department and its entities. Though it was a challenge, it was something that the Department had to do in this financial year, addressing all these problems to make sure that in terms of science and technology, the grassroots were brought to the fore to make sure growth became a reality.
Global competitiveness and the utilization of innovation would be prioritised, as well as issues around patent registering. The global reports on patent rates and registering showed that South Africa was not doing well as compared to its BRICS partners. Some of them had been doing quite a lot of work over the years and because South Africa was a developing country, it was trailing behind. Utilising the opportunity of South Africa participating in the BRICS platform, what it could be able to draw from this partnership was that it could assist the DST to come to the forefront, where at least South Africa could be found in the top ten global countries.
Ms Kubayi said the environment around the DST’s budget process was a bit concerning. Sustainable funding for both the Department and its entities remained a key driver of success. The DST’s work and results could not be realised or seen over a period of a year. For instance, in order for it to produce the number of PhDs that the Department wanted, it had to be funded over a period of time. In order for it to see innovation, projects that were funded had to take place over a period of time. Part of the challenge in the portfolio was that the Department was committed to a number of PhDs per year, but if the departmental budgets were cut in the middle of a five, six or seven-year project or PhD, for example, it made it difficult to deal with. The blanket approach by Treasury in cutting budgets was not conducive to the portfolio of science and technology. The Department appealed to the Committee, as it wrote its reports, to come up with mechanisms to indicate at what point the Treasury could cut a budget after considering medium term expenditure framework (MTEF) commitments. The departments understood the policy that budgets could be revised and could be cut, but Treasury had to be aware of the impact on a department’s work. The Department was not blind to the economic challenges requiring a reduction of the budget during the MTEF, but equally the Treasury must also not to be blind to the impact on the departmental work, as it was difficult for the Department to reprioritise the work it was doing.
There was a need for the Department to rigorously and aggressively push for an investment in research and development (R&D) for South African economic growth to happen. A number of countries’ success was based on the amount of time, money and conscious investment in R&D. The current allocation or spending of the country across both government and the private sector was at a level which was not sustainable for the country. The DST would aggressively advocate that there was need to see an increase in R&D. Let it not be a fact that when the country faces economic difficulties, the first thing to cut is research and development, because it impacts future growth.
From the executive point of view, there would be interacting with the DST’s entities. The executive had interacted with all the entities except the National Research Foundation (NRF). It normally met with the boards first and then met with the chairpersons and chief executive officers (CEOs) on a monthly basis. The CEOs would generally meet directly with the Director General (DG), while the executive would have the interaction with the chairpersons. The executive had met with the entities to check on progress thus far and what needed to be done in this financial year and going forward. It had discussed what they should be concerned about and what should be attended to. It was commendable that the majority of the entities were stable and performing well.
The Minister said she had been conducting oversight for a number of years and believed in accountability and transparency in order to give the public the assurance that there was nothing being hidden under the table. There two entities that needed close attention from the Department, and though it had been doing well, there were areas which needed to be strengthened, especially the areas of monitoring of the finances and management, without interfering with the entities. More oversight was needed without interfering. Lessons could also be drawn from other public sector entities on what was it that the Department could do what had gone wrong, and what could then be done to avoid trouble.
She was comfortable with the current board, which possessed the required skills. The acting positions at executive levels would be prioritised and would be filled within six months. For an entity to be effective, there was a need of permanent people in the top posts, and those who were appointed with a contract could be held accountable.
The Minister said she was concerned about the financial sustainability of the Council for Scientific and Industrial Research (CSIR) and the Human Sciences Research Council (HSRC). With its responsibility for poverty alleviation and a reduction in inequality, the HSRC was doing an important job. The CSIR, in terms of its work, was also doing very well, but how it ran its projects, and its reporting and funds management, would be looked into. Their financial sustainability was critical for the DST, and how they were able to recover, account and record their resources and financial systems was important in the spirit of transparency and accountability.
Observations from the NRF and the Academy of Science of South Africa ASSAf indicated that issues of accountability, transparency and good governance must be seen across the entities. Potential problems must be addressed immediately, and prevention was better than cure. Stringent oversight of the entities was very important, led by the Deputy Director General (DDG).
Department of Science and Technology: 2018/19 Annual Performance Plan
Mr Phil Mjwara, Director General: DST, said that science and technology was a key element in advancing economic growth and driving social change. He worried about the lack of significant growth in the budget, as well as the growing vacancy rate. However, the Department would play an important role in the policy space, and was almost at the end of compiling the new White Paper. When it was ready, it would be presented to the Cabinet first, and then to the Portfolio Committee.
Innovation and technology were not funded in a cyclical way. The goals of the Department were to ensure and create a coordinated and efficient national system of innovation, as well as maintaining and increasing the relative contribution of South African researchers to global scientific output. The other goal was to increase the number of high-level graduates and improve representation. The Department also sought to accelerate inclusive development through scientific knowledge, evidence and appropriate technology.
The Department had started working with the Treasury on the budget coordination mechanism for deploying funding to the science councils, especially those which did not report to the Minister. On the research articles published by researchers in Africa, the Department would look carefully at the targets, as the targets were at moderate risk, and they were going to be working closely with entities. On the articles co-published by researchers on the African continent, a target of 4 306 had been set for 2020, and the 2015/16 and 2016/17 figures suggested that the Department had gone above the target of 5 393. For the current achievement, compilation was still under way to establish an informed position on the achievement. The Department sought to improve the number of graduates and to improve representativity. It was in the fourth year of implementing the annual performance strategic plan. It targeted 100 PhDs per 1 million people.
Globally, there was a discussion about open science and open innovation, and the Department would development a strategy towards that, taking into consideration the 27% unemployment rate in South Africa. The Sovereign Innovation Fund would be instituted to fund innovative ventures and small and medium enterprises (SMEs) venturing into innovation. This would be in collaboration with the private sector. The Department was also training a lot of people in intellectual property management. It was tracking the targets in the five-year plan.
Mr Imraan Patel, DDG: Socio-Economic Innovation Partnerships, said that the portfolio Committee report of last year had identified the importance of having performance impact indicators, and the difficulty in coming up with indicators. The first indicator on commercial and industrial financing was the reason why the Department was double-checking to make sure that it was aligned with what it was currently doing. Regarding SMEs, the numbers would be validated in accordance with the annual report. The DST was also looking at companies which were improving, based on the support it provided.
Mr N Koornhof (ANC) asked when the Department could finally expect to have the White Paper released. It was in its 11th draft, and this was a little bit of a slow. There were various models on how to compile a White Paper, and the Department normally used outside people. It had decided to do it in-house this time. He asked for a timeframe for when it would be ready. The National Advisory Council on Innovation (NACI) was struggling to understand its own brief, and he asked if the decadal plan would help it. The Technology and Human Resources for Industry Programme (THRIP) was definitely a link between industry and science, and it must come to the DST as soon as possible. The HSRC was gradually doing more commercial consultancy work and trying to get revenue to pay for salaries. It was not getting support from the government, and was doing less for the government in terms of research. He asked how long the Department could use Treasury funds to fund it? He acknowledged that it was a fantastic brand, and the Department should not lose it.
Dr A Lotriet (DA) said that the Committee had been very aware of the DST’s budget problems for the past few years. The growing vacancy rate was extremely concerning, given the budget constraints the Department was currently experiencing. How was the Department going to deal with the lack of senior researchers, because that was going to have a serious impact on its performance? To what extent was the budget coordination mechanism that had been approved by Cabinet being implemented? She asked the Department to elaborate more on the funding of science councils.
Dr S Thembekwayo (EFF) agreed with Mr Koornhof on a timeframe for when to expect the White Paper. In reference to the Minister making statements of engaging a number of entities, the most important was the NRF, which had not been engaged so far. The Minister had mentioned that discussions would take place later on, but since the DST programmes like the research development and support were very important and interlinked to the NRF and other service providers, why could it not be engaged now, since it was affecting a lot of projects? This would allow the next report to include the involvement of NRF, especially when dealing with the progress of PhD students. She also asked about the strategic outcome goals, with special reference to improving the number of high-level graduates and improving on their representivity, against the blanket approach of cutting the funding by the Treasury. How could the DST reach this goal, with the Treasury’s blanket budget cuts?
The Chairperson referred to the increases in the new targets at a time when the Department was striving to have a clean audit, and failing to achieve those targets. This worked against the Department, despite it having good intentions. She also asked for proper deadlines in respect of the White Paper so that the Committee could plan properly. The governance issues raised must be incorporated into the new APP. When was the Department prepared to make a presentation on open science?
The Minister said the Department had completed its work on the White Paper process, and would be meeting on 24 April to deal with other inputs. Part of the discussion was around the institutional landscape -- whether it could be put in the White Paper pronouncements or in a separate document. The role of the Presidency was also one of the recommendations which needed to be sorted out. The Department was looking at the mechanisms that would not collapse the Department of Science and Technology, and she had consulted the Deputy President in that regard. The issues would be discussed with the Cabinet in the next two weeks. A summit would then be called to engage on the document so that everybody would be taken on board as to what was being proposed by the Department.
With the Science and Technology Laws Amendment Bill, the conclusion would be on 24 April, and in two weeks it would go into the Cabinet system. The Portfolio Committee would be invited to all the summits. The White Paper had not been tabled in Parliament for approval, but would be shared so that they knew what was included. Only amendments identified would be brought to the Committee. After the summit, if the Committee felt they needed a hearing or a specific engagement as a Committee separately, the Department would be ready to do that.
The Department had engaged with the NACI, and the appointment of a CEO was being prioritized. The shortlist had been completed, and interviews would be conducted by the Minister. The HSRC would be brought back to the forefront of driving dialogue and researching critical areas that affected the government and the country, since they dealt with critical issues like inequality.
There was engagement with the NRF at the level of officials. Within two to three weeks, there would be meetings at the ministerial level, and from a technical point of view, the work was continuing.
The Chairperson commented that the State of the Nation Address (SONA) had stressed that the prosperity of the nation depended on its ability to take advantage of rapid technological changes. This meant there was an urgent need to develop capacity in the areas of science, technology and innovation. She asked out how the Department had incorporated that.
The Minister said with the “fourth industrial revolution,” a lot of opportunities existed, and Africa had to take advantage of them.
Mr Thomas auf der Hyde: DDG, NRF, said the science, technology and innovation study was to identify institutional landscape gaps for public institutions in South Africa. It was also to find public research models for public research institutions. Some public research institutions in South Africa should be considered for re-establishment, bearing in mind the growth of scientific education, as well as the needs of post-apartheid South Africa, because the institutional landscape was still premised very much on the needs of the pre-apartheid era. Not many new institutions had been established. The DST would work towards establishing new public research institutions to strengthen certain areas of research and innovation, as well as creating new opportunities for the PhD graduates that the universities were increasingly producing. A lot of people were saying there were few public research institutions in South Africa, but nobody had written down and argued the point. A roadmap for establishing a new public research institutions project was being finalised, as well as identifying the gaps in the institutional landscape at the moment and what type of institutions needed to be established. There was a wide range of different typologies that could be utilized, so the DST would look at what the needs were, and how they could be pulled together to increase the economy of scale and the critical mass. There was a linkage between this project, the White Paper and the decadal plan. Key sectors would be identified to see where public research institutions would be needed.
Responding to Dr Thembekwayo on how to project targets, given the financial situation, he said that in the early stages of the five-year strategic plan, Treasury had injected a significant amount of new money – R350 million -- into the development of human resources. It had allowed for a significant number of bursaries at that time. The amount was not exhausted -- it was still on the baseline and increased every year. However, the students’ needs were growing at a faster rate. The allocation had not grown at the same pace as the cost of living for the students. The per capita amount of the bursaries had to be increased each year, and it was a struggle to keep increasing the number of bursaries with the slow rate of increase in the bursary allocation that the Department received. Besides the Treasury allocation, the NRF had been able to raise additional funding. Other monies were also leveraged from the Scarce Skills Fund through consultation with the Department of Higher Education and Ttraining.
Ministerial guidelines to the NRF had also been issued over the years, setting out the parameters for the racial and gender demographic distribution of the funds or bursaries that were awarded to students. The number of black PhD students was not yet what the Department needed it to be, but at the masters and honours level, it had been achieved.
Mr Imraan Patel, DDG: Socio-Economic Innovation Partnerships, referred to the budget coordination process, and said the DST would make an accommodation in the existing budget process. There had been a very good engagement with the Treasury, which did not have dedicated officials who were focused on the issues of science, technology and innovation. The DST and the Treasury had carried out a joint study to understand the funding requirements of science and technology.
Mr Tommy Makhode, DDG: DST, said declaration forms had been introduced, which each chief director had to sign to ensure compliance and performance. The internal audit unit looked at this performance. Roles and responsibilities had also been raised to ensure performance.
Mr Mjwara, Director General, said the Department was also improving engagement with funders from overseas who needed to oversee the proof of evidence for programmes. The point raised by the President had helped the it to approach the issues of science and technology at different levels.
The Chairperson, in conclusion, agreed with the Minister that the budget cuts must not affect the strategic programmes and annual performance plans of the DST. She welcomed the position of the Minister when it came to ensuring accountability. She also applauded the signing of declaration forms so that only the DG would be blamed or have to take responsibility while the culprits were let off. She commended the good work of the Department and encouraged it to continue on the same trajectory.
She informed the Members and the Minister about a proposed study tour to Japan because of a programme linked to science and technology. There was another proposal to visit South Korea, but the Committee would see which one to approve.
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