Technology Innovation Agency Bill [B49-2007]: hearings

Science and Technology

16 January 2008
Chairperson: Mr G Oliphant (ANC)
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Meeting Summary

The Committee heard submissions from several key stakEholders on the Technology Innovation Agency Bill (Bill). The Innovation Hub, the Licensing Executives Society South Africa, Industrial Designers Association South Africa (IdeaSA) and the University of KwaZulu-Natal were generally supportive of the objectives of the Bill and the creation of a new public entity aimed at enhancing innovation and inventions. However, all the stakeholders were chiefly concerned about the role and level of participation of government in private companies. This conflict of interest vested in the duality of the proposed enabling-and-competing nature of Technology Innovation Agency (TIA or Agency).

Members posed questions about international best practice, definitions, and the degree of state involvement. The qualification for board membership and the establishment of supplementary innovation hubs were also scrutinised by the Committee.

The Department of Science and Technology provided its initial response to the submissions and undertook to give a more detailed answer at its next sitting with the Committee.

Meeting report

The Innovation Hub (TIH) submission
Mr Tsietsi Maleho (Manager: Corporate Affairs, TIH) expressed the entity’s support for the establishment of the Technology Innovation Agency (TIA). He explained that TIH was tasked with stimulating the growth of knowledge-based businesses in the Gauteng province. In that regard, the entity hoped that the new Agency Bill allowed for the establishment of an environment that facilitated the stimulation and growth of strong knowledge-based sectors. It was well established that small and emerging companies based on technology and research and development, were the drivers of a knowledge economy. Finland was touted as a successful country which managed to change its economy dramatically through creating an enabling environment for innovation.

Dr Jill Sawers (Manager: Incubation, TIH) voiced concern about the wording in the current Memorandum of Objects of the Bill. It implied direct involvement and interference (by the Agency) in other public or private organisation’s initiatives. It was imperative that the Agency positioned itself as an enabler as opposed to a competitor, which would discourage collaboration with the private sector. Moreover, the speaker cautioned that the Agency should be risk tolerant and that a long term rather than a short tern return on investment was to be expected. Lastly, she raised concern regarding certain aspects of the proposed Agency Board.

Mr S Farrow (DA) probed two issues. Firstly, he queried whether TIH was a government agency. Secondly, he wondered what sort of funding the agency received.

Mr Maleho confirmed that TIH was a government agency. He added that the agency received funding for operational expenses and not for entrepreneurs.

Mr S Dithebe (ANC) sought the agency’s view on the degree of state involvement in the operations of private companies.

Mr Maleho replied that it was good for the state to be involved in the funding of innovation but not to the extent of taking equity in private companies

Mr J Blanche (DA) posed two questions. Firstly, he wanted further examples of international best practice regarding innovation funding. Secondly, he explored whether there were adequate innovation hubs or science parks in the country.

In response to the first question, Mr Maleho highlighted Finland as example of international best practice in the sphere of innovation funding. He urged that this model be replicated in South Africa.

Mrs Sawers answered that there were insufficient innovative institutions in the country. However, encouragingly there were plans to establish such centres in different regions of the country.

Licensing Executives Society South Africa (LES SA) submission
Mr T Doubell described the organisation’s background and activities. He stressed that LES SA generally welcomed and supported the objectives of the Bill and the establishment of a new public entity aimed at enhancing innovation and inventions. However, there were aspects of the Bill, which the organisation considered problematic, and in some instances counter-productive. These issues related primarily, to the apparent conflict of interest vesting in the duality of the proposed enabling-and-competing nature of the Agency, the scope of the innovations and inventions to be dealt with by TIA and the transition from the then South African Inventions Development Corporation (SAIDCOR) to the TIA. The organisation also had minor issues relating to several definitions and ambiguities in the provisions of the Bill.

Mr Farrow examined the reason behind the speaker’s objection to the definitions of certain words in the Bill.  

Mr Doubell appealed to the Committee to give attention to the definition of certain words listed in his presentation. In his view, they were not properly defined, unclear and inconsistent with the Oslo Manual of the OECD Report. He concluded that some words were also better defined in other legislation and could simply be duplicated in the current Bill.

Submission by Professor Mark Laing of University of KwaZulu-Natal
Professor Mark Laing (Chair of Plant Pathology, University of KwaZulu Natal) outlined his background and provided a summary on the sources of innovation funding in the country. Similar to the previous presenters, the speaker argued that the TIA should be a facilitative, benevolent agency instead of a competitive, commercial entity. The submission concluded with a proposed list of amendments (to the Bill) relating to the disqualification for board membership, terms of office, remuneration, CEO and meetings of Board.

Mr Farrow wanted to establish whether the presenter made the submission on his personal behalf or on behalf of the university.

Mr Laing admitted that it was primarily a personal submission. In addition, he mentioned that the university was aware of and supported his submission.

A member of the Committee was emphatic that the proposed TIA board should not be exclusively composed of specialists and experts in innovation. There should be space allocated for individuals who had the ability to analyse and be decision makers, despite their lack of expertise.

Mr Laing concurred with this thinking and held that it was not necessary for board members to be experts in the field of innovation.

Prof I Mohamed (ANC) observed that money seemed to be the main motivator for pursuing certain innovations. Also, he wondered what advantage TIA would have over existing structures, like SAIDCOR. 

Mr Farrow hoped that TIA would be able to reach the whole broad spectrum of innovation.

Industrial Designers Association South Africa (IDEASA) comment
Mr B Smith (Chairman, IdeaSA) applauded Parliament for developing this legislation. He stated that there was a general lack of respect for intellectual property in the country. Finally, he narrated his personal experience, of struggle and frustration, as an industrial designer.

The Committee was sympathetic to the presenter’s plight and urged him to seek assistance from the Department of Science and Technology.

Department of Science and Technology (DST) Preliminary Response to Submissions
Dr Phil Mjwara (Director General: DST) indicated that the Department appreciated the submissions conveyed during the public hearings. He noted the debate on definitions and cautioned against “playing around with words at a semantic level”. 

Furthermore, the DG observed that the stakeholders misunderstood the original intent of TIA. He attempted to correct this misconception by explaining that TIA was not envisaged to operate as a commercial entity but as an investment vehicle that facilitated ideas and activities to go into the commercial space.

In addition, Mr Mjwara counselled the Committee to be careful when it looked at international best practise for innovation funding. It was imperative to look at what those countries did when they were at a similar state of development to South Africa.

Also, the DG stated that issues pertaining to the board and remuneration were valid. However, this was a Bill and not an operational plan, and therefore, did not have to be detailed.

Mr Mjwara disclosed that TIA would resuscitate the original intention of SAIDCOR at a national level. However, he acknowledged that it would not be the answer to all the problems in the funding sphere. He emphasised that funding would be provided to the public sector and the private sector.

In conclusion, the DG extended an invitation to all the presenters to engage further with the Department and promised to give the Committee a more detailed response at a later stage.

The Chairperson thanked the stakeholders for their participation and contribution.

The meeting was adjourned.



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