I n d u s t r y I n n o v a t i o n P a r t n e r s h i p s

Innovation for Sustainable Industry Development22 July 2015Isaac Maredi

Presentation Outline

System Wide Challenges Technology Balance of Payments Manufacturing Trade Deficit

Private Sector R&D Investment Rationale for Funding Industry R&D GERD Trends

DST Interventions Industry Innovation Partnerships Programme Environmental Innovation Programme

2

www.dst.gov.za

SA Technology Balance of Payments

3

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

-

500.0

1,000.0

1,500.0

2,000.0

2,500.0

Figure 2(a)

Payments Receipts

Paym

ents

and

rece

ipts

• SA is a net importer of technology• The gap between imports and exports has

been increasing • Points to increasing local demand for

technology

www.dst.gov.za

SA’s current account deficit

4

Manufacturing Trade Deficit

• Manufactured goods made up 52% of merchandise exported in 2012, up from 41% in 1994

• SA’s growing trade deficit in the manufacturing sector is a structural concern for the economy

5

Rational for industry R&D funding

?R&D / Technology / New Knowledge: direct impact on competitiveness & innovation

NDP & NGP: Role of RDI in

economic growth

TYIP : Develop and capacitate a knowledge economy

IPAP: invest in innovation & technology to ramp up competitiveness in production &

services sectors of the economy

Investors and Flows, 2011/12 R&D survey

39%43%

15%

8

Technology Localisation Programme (TLP): • Leverage public procurement opportunities• Improve the technological capability of local firms leading to

Increased competitiveness (quality, cost, customisation) Expanded capability (new products, services) Expanded market (local and global)

• Industry Innovation Partnerships Programme• Sector Innovation Funds

DST Interventions

DST tax incentive programme

Industry Innovation Partnerships

Sector Innovation Fund

Motivation for IIP

DST allocated R500 million over 2013/14 MTEF to develop and

implement the Industry Innovation Partnership (IIP) Programme

Key goals:

Leverage industry investment in RDI by stimulating increased RDI

co-funding & participation by industry players in projects to

maintain and increase their export market share

Mitigate against under-investment in technology & innovation

in identified niche and strategic sectors of SA economy so as to

improve their competitiveness

Key long-term outcomes measure will be increased sector

contribution to GDP through stronger RDI-based industrial

development

IIP Initiatives

Titanium Development (existing CoC)

Satellite Development & Manufacturing

CSIR (Bio-manufacturing, Nano-upscaling, Bio-refinery & Photonics)

ICT Industry Partnerships (CSIR Meraka)

Nanotechnology Innovation Centre

Sector Innovation Fund (SIF)

Sector Innovation Funds

DST intervention to enhance economic competitiveness of

participating sectors

Encourages private sector to co-invest with government in

RDI activities that address competitiveness and sustainability

of participating sectors

Managed by Industry associations or bodies

Formal entities

representing interest of members

Industry identifies challenges & determines own RDI agenda

Key Performance Indicators

RDI outputs (HCD, knowledge

products, scientific publications)

Absorption capacity and/or rate iro

HCD

Knowledge/technology transfer

No. of knowledge products

transferred

To whom (big companies/SMMEs;

previously disadvantaged players;

etc)

Jobs created or sustained

New enterprises created or

supported

Amount of funding contributed by

sector

Increase/sustaining of market share,

including exports

Increased contribution to GDP (long

term)

Measured at impact, outcomes and output levels

Some key performance indicators:

Complexities and considerations

Must use the process to better understand and appreciate

the complexities of R&D funding in the private sector

Signaled that performance measure is not simply matching

funding for the SIF but increases in the level of R&D within

the sector (even in-house funding)

SIF is a crucial initiative under the proposed MTSF target

1.5% GERD by 2019

DST aims to secure continued public funding beyond the

ECSP and at significantly higher levels

2014/15 IF APPLICANTS Industry Association Initiative/Programme

South African Minerals to Metals Research Institute

Mineral Processing

Citrus Research International Research for Citrus Export

Marine Finfish Farmers’ Association of South Africa

South African Marine Aquaculture Research Centre

Paper Manufacturing Association of South Africa

Paper Manufacturing

Forestry South Africa Future Plantation Forests for the South African Bio economy

Sugar Milling Research Institute Sugarcane Bio-refinery Research Programme

Fresh Produce Exporters’ Forum Post Harvest Innovation Programme

Marine Industry Association of South Africa

Marine Manufacturing innovation

Wine Industry Network of Expertise and Technology

Wine Industry Innovation

Sectors Supported

9 SIFs established by end 2014/15

Sectors’ Contribution to GDP

SA’s GDPSAMMRI (8.8%)

CRI (0.16%)

MFFASA (0.026%)

PAMSA (0.6%)

FSA (1.2%) SMRI

(0.7%)

FPEF (1%)

MIASA

WINETECH (2.2%)

Future plans Permanent budget line item - MTEF

Industry innovation partnerships with direct (mandatory) industry

participation

Sector Innovation Fund aimed at transformation in key sector(s):

Existing SIF objectives

Localisation of

RDI capacity and services

Technology driven industry development and competitiveness

Transformation within the NSI

Institutions, researchers, etc

Contribute to other industry and economic development imperatives

E.g., Black Industrialists Programme

Overview of Environmental Innovation at DST

Environmental Services & Technologies

Water RDI Roadmap Waste RDI Roadmap Environmental Services

WADER Waste RDI Implementation Unit Ecological Infrastructure

Biomimicry Platform

Water RDI RoadmapHow

Problem Statement:

• 98% of all water resources already allocated

• Non-revenue water is 36% on average ~R7 billion / yr

• By 2030 demand will outstrip supply by 17%

Problem

Human Capital

Development (HCD)

(Skills)

Innovation (technological and non-

technological)

(Technology)

Research and

Development (R&D)

(Evidence)

Means

Opportunities:

Better coordination and improved decision making supported by the translation of research into practise

More products and services to reach the market through a better coordinated water innovation pipeline

National savings through targeted RDI investments (e.g. By reducing water losses to 15%, through innovation interventions, an approximate R3.5 bil would become available for investment in other needs/areas)

Opportunities

Use of sources

Govern, plan & manage

Supply infrastructure

Operational performance

Govern, plan & manage

Efficiency

Monitoring and collection

Increase ability to make use of more sources of water, including alternatives.

Improve governance, planning and management of supply and delivery.

Improve adequacy of performance of supply infrastructure.

Run water as a financially sustainable business by improving operational performance.

Improve governance, planning and management of demand and use.

Reduce losses and increase efficiency of productive use.

Improve performance of pricing, monitoring, metering, billing and collection.

Environmental Innovation Programme

Pull together the research and commercialisation stages of the water innovation continuum. • Demonstrate water technologies in

operational environments (piloted at scale).

• Assess the performance, validity, impact (social, environmental, etc.) and suitability of the technology.

• Build multi-sectoral and cross-disciplinary partnerships in support of technology demonstrators.

• Disseminate information widely to promote technology adoption, investment, and user-confidence as well as communicate gaps in research, etc.

• Promote and support water entrepreneurship and relevant skills development in the water technologies space.

Market Entry

Commercialisation

Market-ready product

Development

WADER

Demonstration

Fundamental Research

Research

Bench Scale

Taking technologies out of the laboratory and proving them in real-

world test situations

Image: Adapted from SDTC, 2014

Water Technology Demonstration Programme

Waste and Environment

Waste Logistics Performance

Strategic Planning

Modelling and Analytics

Technology Solutions

Waste and Society

Waste RDI Roadmap

Strengthen skills and generate evidence to optimise decision-making around the movement of waste across the country (logistics, assets, resources)

Develop, evaluate, demonstrate, localise and deploy technologies to support municipalities and industry in diverting waste away from landfill towards value-add

Strengthen skills in methods, tools, models and techniques and apply these to generate evidence to inform the management of waste

Strengthen skills and generate evidence to inform decision-making, planning and policy development by government and industry

Strengthen skills, generate evidence, deploy technologies to reduce the impacts of waste on receiving environments

Deepen understanding of the socio-economic opportunities provided by waste, but also the threats that waste poses to human health

How

Problem Statement:

• 90% of South Africa’s waste goes to landfill

• Resulting in loss of resources to the economy

• Resulting in social (human health) and environmental impacts

• Municipalities face challenges in delivering services and diverting waste from landfill

• Alternative waste treatment typically more expensive than landfilling

Opportunities:

• Preventing waste creates opportunities for industry to increase value-addition and competitiveness

• Diverting waste from landfill creates opportunities for new direct and indirect jobs and enterprises

• Improved management of waste reduces risks to human health and environment

Human Capital

Development (HCD)

(Skills)

Innovation (technological and non-

technological)

(Technology)

Research and

Development (R&D)

(Evidence)

OpportunitiesMeans

Problem

Environmental Services

Environment & Society

•Citizen Science – MiniSASS app•SARVA

Ecological Infrastructure

•Evaluation of NRM funding window of the Green Fund•Developing a data and institution management portal for the Ntabalenga Catchment - DEA

Biomimicry Platform

•Being developed with WRC – creating a community of practice on Biomimicry

Siyabonga

isaac.maredi@dst.gov.za

+27 12 843 8761