Address by Minister & Department of Science and Technology: Annual Report 2006/07 briefing
Science, Technology and Innovation
20 November 2007
Meeting Summary
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Meeting report
SCIENCE AND TECHNOLOGY PORTFOLIO COMMITTEE
20 November 2007
ADDRESS BY MINISTER & Department OF SCIENCE AND TECHNOLOGY: ANNUAL REPORT
2006/07 BRIEFING
Chairperson: Mr G Oliphant (ANC)
Documents handed out:
OECD Review of
the South African NSI
Operational
efficiency
Towards 2018: South
Africa’s 10-Year National Innovation Plan
Audio recording of meeting
SUMMARY
The
Deputy Minister of Science and Technology, and the Department briefed the
Committee on the Annual Report 2006/2007. The Department noted that
Organisation for Economic Cooperation and Development had carried out a review
on the National System of Innovation. The findings of the review were
highlighted. On the positive side, South Africa had a resource based
industry, a knowledge infrastructure, industrial and academic networks and
political awareness of science and technology. Weaknesses included poor quality
schooling for many, shortages of human resources at all levels involving
mathematics, science and technology, lack of design, engineering,
entrepreneurial and management actors, and ageing, white male dominance of
industrial and academic research and development.
The Department had responded to these weaknesses and challenges by developing a
governance plan and policy, innovation focus, human capital pipeline, and
developing a 10 year plan for the NSI. It launched an Innovation survey,
developed a Technology Innovation Agency, and sought to increase fiscal incentives.
The Department then described how it sought to increase its operational
efficiency, to create a unique and sustainable competitive position.
Members posed questions on the cost architecture, the savings, the poor reports
of some of the Institutes under the Department, whether the Department procured
services from small businesses, the mandate of the Public Benefit Foundation,
how the Department ensured that children reached the higher education levels,
and what the Intellectual Property offices covered. Further details were sought
on the 10-year plan, coordination of science councils, innovation, whether the
Department was seeking more funding, whether there was investigation of climate
change, interaction with other departments, the need also to train
technologists, and the need for collaboration between the universities and
secondary schools. The role of the National Council on Innovation was
questioned, as also collaboration with industry, the reasons why other
countries performed well in innovation, and the cross-cutting nature of the
innovation strategy. The Chairperson emphasised the need for the Department to
present the reports of the institutes before the Committee.
MINUTES
Department of Science and Technology(DST): Annual Report Briefing
Dr Phil Mjwara, Director General, DST, briefed the Committee on a review
undertaken by the Organisation for Economic Cooperation and Development (OECD)
on the South Africa’s National System of Innovation, which is a requirement
following the observer status of South Africa in the OECD Science and
Technology Committee. He noted that the review process involved a review team
comprising of OECD Secretariat, two countries as ‘special’ reviewers and
consultants. Interviews were undertaken of the major National Systems
Innovation stakeholders. He stated that the review was timely as it was done at
a time when there were expanded Science, Technology & Innovation (STI)
discussions in Cabinet and a change of leadership in the flagship STI
institutions.
Dr Mjwara highlighted some of the key review findings with respect to South
Africa’s strengths. These included resource-based industries, knowledge
infrastructure, traditional linkage between major industries and the knowledge
infrastructure, industrial and academic international networks and political
awareness on the importance of STI. The review highlighted opportunities
available, and aimed to raise economic performance by building on existing
innovation systems strengths in industry. It also identified attraction of
foreign direct investment (FDI) to establish durable South African capacities,
exploiting of latent talents of the majority and building on industry-research
sector interactions as ‘focusing devices’ for developing the knowledge
infrastructure.
Some of the weaknesses highlighted included poor quality schooling for many
citizens, giving rise to shortages of human resources at all levels involving
mathematics, science and technology, lack of design, engineering,
entrepreneurial and management actors, ageing and white, male dominance of
industrial and academic research and development (R&D), and insufficiently
holistic governance of the state components of the innovation system. In
addition to these weakness some of the threats facing South Africa included,
HIV/AIDS, social unrest and the demographic pressures on education, research
and innovation systems.
Dr Mjwara highlighted some of the responses to these weaknesses and
findings. These included the development of a governance plan and policy,
innovation focus, a human capital pipeline, developing a 10 year plan for the
NSI, launching an Innovation survey to complement the internationally respected
research and development survey, developing a Technological Innovation Agency
and increased momentum on fiscal incentives.
Towards 2018: South Africa’s 10-year National Innovation Plan
Dr Phil Mjwara addressed the Committee on the policy landscape from the
White Paper on Science & Technology in 1996 to the 10 year innovation plan
in 2007. He noted that there had been economic transformation from 1829, where
there was significant growth during the age of steam, to the 20th
century, where there was growth of the information age, to the present day
where bio-economy was experiencing a steady growth. He stated that the four
pillars of the knowledge economy were economic and institutional regime,
education, information and infrastructure and innovation. All these pillars are
interdependent and interconnected.
Dr Mjwara stated that the principles informing the 10 year plan included
articulation of an innovation path to contribute towards the transformation of
the economy to reach a knowledge economy. This plan would be informed by a
decision making process emphasising a focus on South Africa’s areas of
competence, global objectives and societal transformation. It was realised that
government’s growth targets required a significant investment in innovation.
Dr Boni Mehlomakulu, Group
Executive: Research, Development and Innovation, DST,
briefed the Committee on the grand challenges. The challenge of farmer to
pharma value chain meant there was a weak role played in South Africa with
respect to Pharmaceuticals, space science and technology. There was a challenge
in energy security since Africa had not been able to exploit solar energy, and
also global climate and other change in science and human and social dynamics.
She stated that the plan was to generate knowledge through science councils,
state owned enterprises, global projects, developing research chair initiatives
and professional development programmes. She highlighted the funds available
for publications, which included the National Research Foundation (NRF),
specialist research funds and international research funds. As for the
commercialisation of technology funding was generated from the Public Benefit
Foundation, funds from Industrial Development Corporation (IDC) and Small
Enterprise Development Agency (SEDA).
Several initiatives were taken to strengthen the innovation competence of South
Africa. A Technology Innovation Agency was responsible for the Intellectual
Property Rights Bill, establishment of Centres of Competence, public benefit
foundation and regional innovation systems. She compared South Africa’s profile
in terms of production of PhD’s with other selected countries, and identified
that South Africa was not doing well. A study on students with higher education
in Maths and science had shown that out of the 26 000 students registered only
561 ended up studying until the PhD level.
In conclusion Dr Mehlomakulu stated that there was need for application of
knowledge to generate new products and services, to ensure innovation as a
national competence through centres of competence, enhance the country’s
ability to generate knowledge, including early stage research areas, and
improve on the infrastructure and internationalisation of South African
research enterprise.
The Deputy Minister Science and Technology, Hon Derek Hanekom, whose interest
on the issue of innovation was identified by the Chairperson, stated that the
10 year National Innovation plan was of interest to other departments such as
Public Works and Trade and Industry. He stated that the 10 year plan aimed to
guide the DST in its work. The plan was not a government wide plan but that it
was more of a view to guide the work of the DST. He noted that DST was focusing
on a few main areas. This did not mean that DST was neglecting other areas, but
rather that it was placing emphasis where it had expertise. These and other
initiatives were geared to combating poverty and imbalances in the South
African society.
Operational Efficiency
Mr Daniel Moagi, Senior Manager, DST, briefed the Committee on the
operational efficiency. He stated that DST was influenced by both internal and
external factors. He noted that the budget was structured so that transfers and
subsidies took up 92.9% of the budget, goods and services 3.5%, compensation of
employees 3.6% and payment for capital assets 0.1%. He noted that the DST had a
policy of saving and had achieved this by reviewing the architectural structure
of the budget to ensure that moneys unspent were saved. He stated that
operational efficiency entailed continuous improvement, increased productivity,
working better, minimising operational costs, improving synergies, simplifying administration
and improving outputs. The strategic goals behind the operational efficiency
were the creation of a unique and sustainable competitive position.
Mr Moagi noted that the initiatives undertaken to achieve these goals included
streamlining the planned framework, quarterly and monthly reports on projects
undertaken, financial analysis of the cost architecture to identify where DST
was over or under spending, detailed monitoring of transfers, IT infrastructure
and a move towards a vacancy rate of 8%. As for the audit findings, policies
and procedures were developed for asset management and user profile management
procedures. In conclusion he stated that the DST reprioritised critical
projects and improved its operations.
Discussion
The Chairperson asked how the Department managed to save money, as alluded
to earlier He noted that some government departments would describe moneys
retained when vacancies were not filled as “savings”.
Mr Moagi noted that the Department was influenced by the internal and external
environment. The Department was assisted to manage its budget and this gave
rise to savings. He stated that the savings were derived from the operations
side of the DST, for example, reducing communication costs and travel expenses.
The Chairperson asked the presenter to clarify the overall mandate as a
Department that had in the past been undertaking the duty of transferring
funds. He sought clarification on whether the Department wanted to be a new
Department with a new mandate.
Dr Mjwara noted that the reason for developing of the cost architecture was so
that the Department could identify and understand the core objectives. He noted
that the emphasis was on the fact that the money in the hands of the DST should
be deployed, not spent by DST.
Mr A Ainslie (ANC) stated that the Auditor General’s
report should be closely related to the expenditure of the department. He noted
that the African Institute had for some time received poor audit reports. He
asked the Department what measures it had put in place to ensure that
institutions could receive unqualified reports.
Dr Mjwara stated that a new board had been appointed, and new policies had been
implemented. He stated that the Department had emphasised the need for the
establishment of sub-committees that would evaluate the work of these
institutions.
Mr Ainslie asked, with reference to the budget allocations on goods and
service, whether the Department procured services from small businesses.
Dr Mjwara stated that the Small, Micro and Medium Enterprise (SMME) policy was
governed by legislation and that the Department’s procurement was based on this
policy. He stated that the Department contracted a lot of consultants from
these groups and procured from small businesses.
Mr Ainslie stated that there was too little reference, on the 10 year plan, to
poverty eradication.
Mr Ainslie asked what the mandate of the Public Benefit Foundation (PBF) was.
Dr Mjwara stated that the purpose of the Foundation was to assist the Department
in the coordination of poverty alleviation projects. He stated that the
Department had no capacity to learn from previous projects. The PBF would
change this by recording the findings and evaluation of progress of these
projects. This information would be used in future to assist the Department in
poverty alleviation projects. He stated that R35 million had been set aside for
the PBF.
The Chairperson stated that the Committee would require the Department to
present reports on institutions under the Department that were the subject of
discussion in the Committee meetings, such as the African Institute.
Mr P Nefolovhodwe (AZAPO) noted that the majority of talented individuals
belonged to the second economy. He stated that these individuals did not have
the capacity to expose their innovative ideas, and that there was a need to
come up with a solution to help them.
Dr Mjwara explained that the Public Benefit Foundation aimed to target these
individuals.
Mr Nefolovhodwe stated that children from disadvantaged communities became
“lost” in the school system even before the country discovered their raw
talent. He asked how the Department ensured that these children reached the
higher education levels.
Dr Mjwara stated that the DST was trying to increase the number of students
enrolling for higher education by offering attractive bursaries to them at the
third year level, before they received job offers that would detract them from
furthering their studies. He noted further, with respect to disadvantaged
children, that the Deputy Minister was a member of a Committee with the
Department of Education that had developed strategies on how to help these
students.
The Deputy Minister stated that he was constantly interacting with the Ministry
of Education. The Department did what it could to assist disadvantaged
students, for example by giving supplementary funding. He stated that a number
of Dinaledi schools had been established in the nine provinces, each linked to
science and technology.
Mr Nefolovhodwe asked what the Intellectual Property offices envisaged and
whether it was in line with the Department of Trade and Industry’s policies on
Intellectual Property.
Dr Mehlomakulu noted that Norwegian funding had been given for certain
projects, and that innovations were being launched in Norway. She stated that
the Companies and Intellectual Property Registration Office was mandated with
the registration of patents. These offices created an environment for people to
register their patents but did not identify new ideas. She noted that through
the IP offices the DST would encourage the transfer of technology from
universities to registration of patents.
Mr S Nxumalo (ANC) asked what the 10 year plan meant for South Africa.
Dr Mjwara stated that it was hoped that through the plan the patent portfolio
and the number of PhD students would increase. He stated that through the
Science Councils the Department was looking into the possibility of developing
a titanium industry, and eventually start producing
airplane components.
Mr Nxumalo asked whether there was any future with respect to coordination of
Science Councils by the Technological Innovation Agency.
Dr Mjwara was positive that there was a future and noted that research
management systems had been established to provide information on the output of
these institutions, to enhance institutional coordination.
Mr Nxumalo noted that the OECD review identified that South Africa was weak
with respect to innovation. He stated that there had been no improvement with
regard to mathematics and science for over 50 years.
Dr Cheryl de la Rey, Councillor, National Advisory Council on Innovation
(NACI), stated that unless South Africa broadened its prospects of innovation
it would not achieve its goals. She gave an example of a school in
KwaZulu-Natal which had good mathematics and science teachers. These teachers
travelled around the region offering their expertise. She stated that the
intervention needed in some cases was minimal. She stated that there was also
need to restore historic schools that did well in mathematics and science.
Mr Nxumalo asked whether the Department would seek further funds for improved
operations.
Mr Moagi stated that the idea was not to ask for more funding but that the
Department tried to look at better ways of doing things and therefore were able
to save on some money.
Mr S Dithebe (ANC) noted that nothing was said with respect to climate changes
challenges.
Dr de la Rey noted that at the focus at present was on the threat of HIV/AIDS. However,
the threat of climate change was an issue of concern to the DST.
Mr Dithebe noted that there seemed to be a half-hearted approach towards
interdepartmental interface on the innovation strategy. He noted that the 10
year plan as stated by the Deputy Minister was focused on the vision of DST
alone, as opposed to speaking to the Industrial Policy Framework.
Dr de la Rey stated that in order for the innovation strategy to be interfaced
with other departments, a comprehensive information plan was needed, and people
had to be aligned with ideas. Where it was possible to develop bilateral
agreements with other departments the DST would do so. She stated that through
the economic cluster the DST was undertaking a number of projects with the
Departments of Minerals and Energy, Trade and Industry, Public Enterprises and
others. The titanium project was an example. She stated that even though the
innovation strategy was a DST plan, there was also work with other departments.
Mr Dithebe noted that although the Deputy Director talked about four pillars of
the knowledge economy there did not seem to be emphasis on the economic and
institutional regime. He thought that all work of DST should be grounded on
sound macro economic policies and sustainability of employment.
Dr Mjwara stated that the Department had not ignored the economic and
institutional regime, and was working with the Department of Trade and
Industry. The Department was concentrating on the pillars over which it had
direct control.
Mr J Blanche (DA) stated that it was one thing to build an engine but another
for it to work. He stated that there was a need to share information on the
innovation strategy with other departments. He stated that PhD graduates would
not drive the economy, but technologists would. He believed that the Department must look at ways
of transferring technology knowledge. He noted that one of the problems faced
in South Africa with respect to sharing information was that there were 11
official languages.
The Chairperson noted that the issue of language could be discussed, to identify whether
it was an advantage or disadvantage.
Mr Bethuel Sehlapelo, Group
Executive: Human Capital and Knowledge Systems, DST, noted that
there was a need to train people and get more PhD students to enhance the
technology capabilities. He stated that there was a need to invest money in
universities to develop technology.
Mr C Morkel (PIM) noted that there should be collaboration between the
universities and secondary schools to identify students who were innovative,
and students who studied mathematics and science. The focus should not only be
on the number of students who graduate with PhDs but also on the quality and
output of the programmes and the students.
Dr Phil Mjwara stated that it was not possible for the DST to bulldoze its way
into championing the whole knowledge infrastructure through Cabinet. There were
various partners undertaking initiatives to tackle these problems.
Mr Morkel noted that the presenters had identified collaborations with other
departments. Many of the initiatives taken may require collaboration agreements
for purposes of co-ownership and harmonisation. He asked whether there were any
existing collaborations, and, if so, then the Committee should be made aware of
them.
The Deputy Minister noted that the Department was doing what it could to work
together with other government departments. He stated that NACI could be a very
important organisation if it took up the mandate of coordinating the innovative
strategy within the government spheres.
Dr de la Rey noted that the composition of NACI was specified in the
legislation. She stated that NACI had decided, with respect to the review of
OECD, to combine a small group of members of NACI with some specialists to complement
the expertise. NACI specifically invited someone with expertise on SMMEs to
assist NACI to interrogate the recommendations in order to formulate advice to
the Minister of Science and Technology. The mandate of NACI was to advise the
Minister of Science and Technology on the innovation strategy, and that was the
reason behind the comments of the OECD review that NACI was too restricted.
Ms B Ngcobo (ANC) asked whether the Department was comfortable with the review
of the OECD.
Dr Mjwara stated that the Department was happy with the review and noted that
if it had been done three years earlier the findings would have been different.
Ms Ngcobo asked whether the Department was working together with SASOL in
regard to bursaries to students.
Dr Mjwara stated that three weeks before the meeting the Department had a
meeting with SASOL’s executives and sold the idea of SASOL working with the
Science Councils and universities.
Mr B Mnyandu (ANC) noted that the presentation identified countries that had high
economic and scientific wealth. He asked whether the Department had undertaken
any studies to identify why these countries performed well with respect to
their innovation systems.
Dr Mjwara responded that the newly industrialised countries such as Japan and
South Korea exploited their innovative systems and produced goods that would
sell in the global market. South Africa was not able to do the same, as it was
not ready to implement the innovation strategy. In other countries the
innovation strategy was implemented from the Premier’s office. South Africa
needed a structure that looked at the role of innovation in the economy.
Mr Mnyandu sought confirmation with respect to the department’s ability to cut
across departments with the innovation strategy.
Dr Mjwara stated that the mandate on the innovation strategy was only with DST
at present.
The Chairperson thanked the presenters and re-emphasised the need to present
the institutional reports before the Committee.
The meeting was adjourned.
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