ISSUE #3 2014RSA R30.00

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DIRECTORS’ REPORT

This August edition of The Money Tree, as you will notice, is a little bit different. We have partnered with the biggest players in Science and Technology, namely, the Department of Science and Technology, to showcase how far we have come, and where we are going in this

arena. This “Special Edition” showcases South Africans at different stages of their development as innovators and creators, such as Elon Musk and electric cars, Zest Mobile and Vuya in the mobile tech space, Siya Xuza and fuel cells, and Gareth Cliff disrupting the radio industry. Unlocking your potential can come in many forms, and on the African continent, science and technology are some of the most exciting areas in which to do this. We are there on the edge of breakthrough scienti� c discoveries, with so much more to come, especially with the development of the Square Kilometre Array (SKA) project, and our � ourishing young talent.

In The Money Tree style, we unravel this amazing world of science. Have a look at page 38 for a feature on the SKA – the world’s biggest and most powerful radio telescope. For an idea on what South Africa is aiming at in the future, and where the government is adding impetus, we have a feature on the recent Science Budget Vote on page 14 and page 32. Also have a look at the series on young entrepreneurs starting on page 25 for some insight into how you can begin to develop your own ideas and potential.

With all the excitement of the FIFA World Cup coming to an end in July, we take an economic view of the different countries battling it out on the pitch. Page 46 sheds some light on the economic defeats and victories some of these countries are facing – hopefully not another 7-1 for Brazil!

Lastly, I would like to implore those Student Investors out there to apply for our Student Investor Ambassador Program (see more on page 31). Your potential can only be realised by taking the opportunities that present themselves to you.

Yours,Matthew Piper

This “Special Edition on Science & Technology” showcases South Africans at different stages of their development as innovators and creators.

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T H E M O N E Y T R E E

Special Edition in conjunction with the Department of Science & Technology

ENTERTAINMENT 6 Calendar of Events

8 Films & Games10 Tech, Gear & Apps

MARKETS & ANALYSIS 18 Economic Report: Market Overview

46 The World Cup of Global Economies52 The Importance of Investing with Compound Interest

55 Fund Focus: Enterprise Outsourcing Holdings

THE NEW INVESTOR 12 Investor of the Issue: Tyla Meadows

50 What is an Index Fund?62 Strategy: Going Short or Long?

LIFESTYLE 20 Success Stories: Yours Truly Café42 Pro�le: Gareth Cliff56 Icon: Elon Musk60 Fashion: Wearable Tech64 Advice from an Elder

SCIENCE AND TECHNOLOGY14 The Honourable Minister Naledi Pandor’s Speech32 The DST Budget Vote Highlights34 The DST Guide to the Budget 201438 The Square Kilometre Array (SKA) Project

THE SCI-TECH ENTREPRENEURIAL EDGE 25 Siya Xusa: SA’s Rocket Scientist26 Vuya: Solar Tablet27 BrailleNote: Tech for the Blind 28 EcoBrick Exchange29 ICS: SA Team Takes Gold30 Zest: Opportunities in the Mobile Tech Space

Special Edition in conjunction with the Department of Science & Technology

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This season is about being bold, con� dent and celebrating everything that is you. POLICE is renowned for bringing futuristic shapes and colour explosions like

no other brand, transmitting your personality into your everyday timepiece essentials.

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...And stand a chance to win this POLICE New Avenue watch and a R1,000 investment account, courtesy of Student Investor.Competition closes 15 September 2014 when the winner will be announced.

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MEET THE DIRECTORS

The Money Tree magazine is published quarterly by Chapel Lane Media on behalf of Student Investor. Opinions expressed in this publication are not necessarily those of Chapel Lane Media, Student Investor or any of its clients. Information has been included in good faith by the Publisher and Editor, and is believed to be correct at the time of going to print. No responsibility can be accepted for errors and omissions. No

material (articles or photographs) in the publication may be reproduced, in whole or in part, without speci� c written permission from the Editor. Submissions of articles and photographs for the publication are to be

arranged in advance and will be published at the discretion of the Editor. The Publisher, while exercising all reasonable care, cannot be held responsible for any loss or damage.

Please ensure that all enquiries for material submission are mailed to editor@tmtmag.co.zaCopyright © 2014.

All copyright for material appearing in this magazine belongs to Chapel Lane Media in conjunction with Student Investor and/or contributors.

All rights reserved.

A Student Investor PublicationIssue 3 2014

Joseph M BushaChairman

For The Money Tree Magazine

For Student Investor

PublisherChapel Lane Media

Charl du Plessischarl@chapellane.co.za

082 452 8110

DistributionFree distribution at major university and college campuses, and at

premier high schools across South Africa. To � nd out where to get your copy, contact distribution@studentinvestor.co.za

Print by CTP, Cape TownStock Photos from dollarphoto.com

Managing EditorTanya Goodman

tanya@chapellane.co.za

Art DirectionWhite Space Invaders

ws-invaders.co.za082 959 3263

Advertising SalesTokologo Phetla

sales@studentinvestor.co.za 073 684 8874

How to read QR-codesFirst, you need a QR-code app and a smartphone or tablet equipped with a camera. Then, go to the app store and search for a free QR-code app.

Some examples of free QR-code apps: RedLaser for iOS; RedLaser or QR Droid for Android; QR Code Scanner Pro for BlackBerry.

When you launch your app, you’ll see that your phone’s camera is activated. Next, line up the camera on your device with the QR code you want to scan and hold the device steady until the app can read the code.

Then, most apps automatically take you to the relevant website; some you have to click or tap. Have fun!

MONEY TREETHE

Joseph Makamba BushaJoseph Makamba Busha is Chairman of Student Investor (Pty) Ltd, and Group Managing Director of JM Busha Investment Group. His love for education, work and business experience made it easier for an

idea to be converted into a business. His life is devoted to creating a better, more inclusive and responsible society and equitable world.

Matthew PiperMatthew Piper is the Managing Director of Student Investor (Pty) Ltd. His passion for entrepreneurship, investing and empowering others is what led to the founding of Student Investor. When away from the bustle of

business life, he spends his time on other passions such as art and academia. Matthew aims to be at the forefront of change in South Africa through entrepreneurial leadership.

Tokologo PhetlaTokologo Phetla is the Director of Operations & Strategy of Student Investor (Pty) Ltd. His vision is to contribute to the creation of an economically powerful African continent. He aims to do this through entrepreneurship and

building up what he terms, a new African Consciousness. “The vision is simple: To change the face of the world, make it look more African.”

Karidas TshintsholoKaridas Tshintsholo is the Director of Marketing & Corporate Relations of Student Investor (Pty) Ltd. Karidas is a learner at heart who enjoys the study and application of Economics. He is an aspiring serial

entrepreneur and hectic jazz fan who is crazy about Mustangs. A young man who knows he is an integral part of a bright future for the African continent.

Jack NewbyJack Newby is the Director of Financial Education of Student Investor (Pty) Ltd. He is passionate about the � nancial markets and numbers have always fascinated him. He has been managing his own portfolio since he

was 18, with great returns. He believes Student Investor can help the youth of South Africa learn about the markets and he encourages everyone to be part of this revolution.

Karidas TshintsholoDirector: Marketing & Corporate Relations

Jack NewbyDirector: Financial Education

Matthew PiperManaging Director

matthewpiper@studentinvestor.co.za 071 293 4409

Tokologo PhetlaDirector: Operations & Strategy

tokologophetla@studentinvestor.co.za073 684 8874

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ROCKING THE DAISIES Western Cape, DarlingOctober 2 – 5A green festival in its ethos, RTD brings thousands of people to the Cloof Wine Esate with indie-rock and dance music, and some comedy and sideshows thrown in. They also host international acts each year, with The Presets, MGMT, Rudimentals and Crystal Fighters already con� rmed. RTD promises seven stages of entertainment plus a dam for cooling down when things get too hot and plenty of recycling going on to ease your conscience. We suggest you get your tickets fast because they’ve sold out for the past two years before the festival even started. www.rockingthedaisies.com

WHITE MOUNTAIN MUSIC FESTKwaZulu-Natal, Central DrakensbergSEPTEMBER 24 – 28The only acoustic music festival in the region, White Mountain is known for its relaxed, family-friendly atmosphere, plentiful amenities and beautiful surroundings. On offer are acoustic performances by some of the country’s top artists, as well as various accommodation options, arts and crafts, assorted food outlets and a beer market featuring local breweries, plus loads of fun outdoor activities. Not to be missed this year is The Parlotones front man, Kahn Morbee, performing brand new songs off his debut solo album.www.whitemountain.co.za

OPPIKOPPILIMPOPO, NORTHAMAUGUST 7 – 9South Africa’s original rock festival, Oppikoppi has been kicking it in the highveld dust since 1994. Thousands of people make the big trek to Limpopo each year to take in the sun and sounds. Originally they played mostly rock, but over the years the festival has grown to host everything from jazz to world-music to hip-hop and metal. Each year the festival has a different name and theme, decided on by the fans and attendees, which number almost 20,000 per year. www.oppikoppi.co.za

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IN THE CITYGAUTENG, NEWTOWN October 3Now in its third year, Vodacom In The City has become a much-anticipated rock, indie and electro music experience set in the heart of Jozi’s trendy, urban, graf� ti-clad landscape – Newtown. The fest brings together chart-topping international acts and thousands of the city’s music lovers for an incredible, unforgettable night. To kick off this year’s line-up, The Presets, Rudimentals, MGMT and Crystal Fighters are the � rst three international acts already con� rmed to perform on this year’s stage.https://www.facebook.com/InTheCityJHB

ROCKVILLE 2069 CAPE TOWN, ARTSCAPE29 AUGUST – 7 SEPTEMBERAn explosive mix of rock music meets the future with a delicious techno edge in Rockville 2069, a musical set against the backdrop of a post-apocalyptic world and steeped in the philosophies that characterise the rebellion of the sixties, the seventies and those that are currently shaping our society. Peace-loving rockers, echoes of Woodstock, and ideas of utopia pitted against the age-old evils of betrayal, treachery and greed can only be saved by an epic battle of the bands. This is a fully orchestrated production, and composer Johnny Ray promises that his musical will be an emotionally soaring journey of caution, hope, optimism, rebellion and joy. www.rockville2069.com

GIVEAWAYTwo double tickets to the show on 29 August. Just tweet that you want them and make sure

to hashtag #Rockville and #TMTmag. We’ll randomly pick 2 winners. Entries close

27 August at 6:00pm.

COMEDYMASS HYSTERIAJOHANNESBURG: AUGUST 6 – 9 PORT ELIZABETH: AUGUST 16CAPE TOWN: SEPTEMBER 12 – 13Nando’s third annual presentation of stand-up comedy has comedians taking on the role of public ministers who have sworn to make South Africa a funnier place. The line up includes: John Vlismas – Public Attacker, Tumi Morake – Minister of Hormones, Carbohydrates and Calmettes, Nik Rabinowitz – Minister of Mental Health, Sunday Lunch and Personal Hygiene, Alan Committiee – Minister of Headucation and Literasy, Chester Missing – Minister of Non-Human Settlements, Joey Rasdien – Minister of Haircare, Skincare and Aponea, Ndumiso Lindi – Minister of Culture, and Mpho Popps – Minister of Single Fathers and Roads. From grassroots to gravy train, expect the ministers to tackle topics like Nkandla, e-tolls and the SABC. If you can keep a straight face, then you clearly didn’t vote!

DIVINEGAUTENG, LYRIC THEATRE AT GOLD REEF CITYSEPTEMBER 12 – 13Comedy Central (DStv Channel 122) presents Part III of their brilliant new series, Live at the Lyric. This time they turn their ever-curious gaze on the unholy topic of religion, hosted by Gareth Cliff. It is a brave and hilarious comedy show that explores the beliefs and feelings of some of South Africa’s major religions, as told by believers from each, and refereed by a fabulous host with no allegiance to any of them. Not for the easily offended, this show will educate as it amuses. And then air on Comedy Central on November 3.Tickets at www.computicket.com

ENTERTAINMENT

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SUURLEMOENSeptember 12This new Afrikaans � lm is based on the popular book by Jaco Jacobs, a well-known youth book writer, whose main characters, Tiaan and Zane, are two typical 16-year-old boys who enjoy skateboarding, writing their blogs with the hope that they will understand girls better, and big dreams of starting a band. After getting in trouble at school, their only hope is to enter a Battle of the Bands competition to pay for the damage. What follows in their quest to enter the contest will make you laugh and

cry, but when life gives you lemons, you make lemonade.The role of Tiaan is played by Tiaan Kelderman and Ben Pienaar is

Zane. The cast also includes Aimee Ritchie as Liezl and Pearl Monama as Bongi, with Chris Chameleon as Mr Marx, Anna Davel as Maya, Jurgen Hellberg as Mr Van Schalkwyk, Sallas de Jager as Mr Maritz and Dirk Stoltz and Kona Brown as Zane’s parents. The director and screenwriter is Vickus Strijdom.

BOYHOODSeptember 5Richard Linklater’s Boyhood is a � ctional drama made with the same group of actors over a 12-year period from 2002 to 2013. It is a one-of-a-kind trip, at once epic and intimate, through the exhilaration of childhood, the seismic shifts of a modern family and the very passage of time. 

The � lm tracks six-year-old Mason (Ellar Coltrane) over life’s most radically � uctuating decade, through a familiar whirl of family moves, family controversies, faltering marriages, re-marriages, new schools, � rst loves, lost loves, good times, scary times and a constantly unfolding mix of heartbreak and wonder. The � lm also stars Patricia Arquette as Mason’s devoted single mom, his older sister is played by Lorelei Linklater, and the role of the long-absent father is taken admirably by Ethan Hawke.

LUCYAugust 29Writer and director Luc Besson has created some of the toughest, most memorable female action heroes in cinematic history. Think: Anne Parillaud in La Femme Nikita Natalie Portman in The Professional and Milla Jovovich in The Fifth Element. In Lucy, an action-thriller that tracks a woman accidentally caught in a dark drug deal, and who turns the tables on the mob and transforms into a merciless warrior evolved beyond human logic, Besson directs Scarlett Johansson. This � lm will keep you on the edge of your seat and blow your mind. Even the soothing voice of Morgan Freeman as co-star won’t ease the tension.

http://youtu.be/RnKVv8Lp_xU

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TAMMYAugust 29Tammy (McCarthy) is having a bad day. She’s totalled her clunker car, gotten � red from her thankless job at a greasy burger joint, and instead of � nding comfort at home, � nds her husband getting comfortable with the neighbour in her own house. It’s time to take her boom box and book it. The bad news is she’s broke and without wheels. The worse news is her grandma, Pearl, is her only option – with a car, cash, and an itch to see Niagara Falls. Not exactly the escape Tammy had in mind. But on the road, with grandma riding shot gun, it may be just what Tammy needs.

The � lm stars Melissa McCarthy and Susan Sarandon, with Ben Falcone making his directorial debut. The cast also includes Allison Janney, Mark Duplass, Dan Aykroyd, Kathy Bates, Toni Collette and Nat Faxon.

THE INTERVIEW October 10In the action-comedy The Interview, Dave Skylark (James Franco) and his producer Aaron Rapoport (Seth Rogen) run the popular celebrity tabloid TV show “Skylark Tonight.” When they discover that North Korean dictator Kim Jong-un is a fan of the show, they land an interview with him in an attempt to legitimize themselves as journalists. As Dave and Aaron prepare to travel to Pyongyang, their plans change when the CIA recruits them, perhaps the two least-quali� ed men imaginable, to assassinate Kim Jong-un. Directed by Evan Goldberg and Seth Rogen.

HERCULES (3D)August 8A tormented soul from birth, Hercules (Dwayne Johnson) has the strength of a God but feels the suffering of a human. Haunted by a sin from his past, he has been selling his services for gold and using his legendary reputation to intimidate enemies. Until he is called upon to enable good to triumph and justice to prevail. Then, it is up to Hercules to lead his band of mercenaries to help end a bloody civil war in the land of Thrace and return the rightful king to his throne. This is director Brett Ratner’s gritty take on one of the most epic action heroes of the ages. All in 3D.

EA SPORTS UFCHeralded by Sports Illustrated as “setting the standard for next generation � ghting games,” EA SPORTS UFC captures the

human athleticism, physiology and emotion of the � ghter like nothing before it. To stay

connected to the sport, post-launch, players will receive free roster updates, which includes the addition of new and upcoming � ghters. EA SPORTS UFC has also made Bruce Lee, the “Father of Mixed Martial Arts,” an unlockable � ghter in the game. When fans beat career mode on pro dif� culty or higher, they will

unlock the legend and can test his legacy against the best of the best in the UFC across

four different weight classes.

GADGETS & APPSTECHNOLOGY

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AUTO REALITY CHECKNeed to buy a second-hand car but afraid of being ripped off? Gumtree.co.za now offers an online tool to assist prospective buyers and sellers price the vehicles being advertised, and choose between alternatives. The Gumtree Car Price Checker is an index that breaks down the prices of all makes of autos sold in the last three months, as well as in real-time. If you’re looking for a Volkswagen, for example, the index will break down the prices on a chart so you can see whether prices for Volkswagens are rising or dropping. Once you select a vehicle, you can view the average prices for a make, model and mileage in a particular year.www.gumtree.co.za/pages/prices/

BREAK DOWN THE WALLSOurHood is a Cape Town based start-up with an app that is, in essence, a social network for neighbourhoods and aims to connect people through a private and secure space. (It’s similar to the US equivalent of NextDoor, which last year raised US$60 million). The platform has a bunch of cool features that helps residents in a clearly-de� ned geographical area to communicate. OurHood works across all digital devices – mobile, laptop or tablets. It operates like a series of notice boards that residents can use to do anything from reporting a criminal activity, to selling granny’s couch, getting a recommendation for a good plumber, sharing a lift or organising an activity. We think it’s a great way to reintroduce the idea of being good neighbours. OurHood is already active in areas of Cape Town and Gauteng. The founders promise the app will be free for perpetuity.www.ourhood.co.za

Wearable Tech

APP LINKSSome people wear their heart on

their sleeve – others wear their favourite Apps. This set of six cuf� inks is perfect for the

App-sessed. Choose to wear any combination of the Email, Message, Calendar and other

well-known apps.R339, www.mantality.co.za

GET READY TO GOFor those serious about always having their GoPro ready for action, you might want to get the new Dual-Battery Charger that conveniently charges two GoPro Li-ion batteries simultaneously. It is also compatible with the Hero 3 and Hero 3+ batteries, plus a USB, the GoPro Wall, Auto Charger or your computer. The Dual LED Indicator Lights of the Dual-Battery Charger display the charging status of both batteries. It displays amber when it is in process and green when it is fully charged.R499www.omnico.co.za

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WHISTLE STOPBlow the Whistle, an anti-crime initiative, is a national campaign that strives not only to protect but also to empower all woman and children of South Africa. As part of their campaign, they have introduced a state-of-the-art mobile app. Mobile phones are the perfect platform to reach everybody in the country. There are more mobile phones in South Africa than there are people, making the device a perfect panic button or warning alert.

The concept of the app is simple: a private panic button that allows you to connect with four selected “Guardians” quickly and easily in an emergency – allowing them to watch over you at all times.

The app can also be set to monitor your journeys automatically. By entering in how long you think a journey will take, the app will monitor your progress, and alert your guardians, along with your coordinates, if the time runs out before you stop or extend the journey. The app is PIN protected so that only you can stop or extend a journey.

The premium version costs only R36 (to remind us that every 36 seconds a woman is raped) and all proceeds will go towards the � ght against rape. It offers live tracking in real time on a built-in map as well as a special feature that commands the phone’s camera to take pictures and automatically send them to your Guardians if an alert goes off.www.whistle.co.za

WATCHES GET SMARTSmart watch manufacturers are still struggling to � nd the balance between simplicity and functionality. There exist millions of objects in our environment that can be scanned by a smart device, but it is not always convenient for users to be constantly removing their smart phones from pockets or purses. Metaio, an augmented reality (AR) software and solutions � rm, recently demonstrated a computer vision-based health & lifestyle app for wearable devices implemented using their technology. Utilising the camera of a smart watch, users snap an image that a companion smartphone then checks for matches using Metaio visual search technology. When a match is found, data is returned to the user in the form of glanceable information on the watch, or rich, interactive data on the smartphone. www.metaio.comWatch the demo: http://youtu.be/XyO972dT4TI

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The Money Tree (TMT): So what do you think will happen to the JSE in the next 12 months?Tyla Meadows (TM): Well, as the great Buffett has preached many a time: we should not try to predict the direction of the market. TMT: My kind of thinking. On a more serious note, though, do you think the market is a little over- or under-priced at the moment?TM: I think that the market is generally overpriced at the moment due to the worldwide effects of Quantitative Easing. The low interests rates across the board have encouraged investors to borrow a greater amount of money and invest it in the stock market. This obviously increases the demand for stocks and the price has increased in response – a little too much in most cases. TMT: What do you think is the hardest aspect of investing to understand?TM: I think that investing in general is dif� cult to understand because it is so unpredictable! The volatility of the market and stocks is incredibly dif� cult to forecast and an investor

never really knows if their returns today will continue into tomorrow. However, the unpredictability is also the beauty of the market.TMT: So Tyla what are you studying?TM: Business Science at UCT, majoring in Finance and Accounting.TMT: And what are you planning to do with that degree?TM: Change the world.TMT: And after that?TM: Hopefully become an Investment Banker.TMT: Apart from your studies how will you go about building your human capital?TM: I believe that the best knowledge comes through experience, reading and the people you surround yourself with. I tend to surround myself with very interesting friends who share their own knowledge and experiences with me; things I would never have otherwise have known about. I read tons of books whenever I have free time. I am also trying my best to gain experience because at this stage I do not

know anything about the reality of banking. To do this, I have planned vac work with Investec and I know it will be an invaluable experience.TMT: Someone great says that where you will be in 10 years’ time is in� uenced by the books you read and the company you surround yourself with. So it looks as if you are on the right track and we wish you well.

THE NEW INVESTOR

If you would like the chance to be Desray’s Investor of the Issue email Jack at jack.newby@studentinvestor.biz. You could stand a chance to

win R1,000 worth of Desray’s clothing from stores in Cape Town, Johannesburg, Stellenbosch and other

parts of the country.

INTERVIEWED BY JACK NEWBYINTERVIEWED BY JACK NEWBY

DESRAY’S INVESTOR OF THE ISSUE

TYLA MEADOWS

DESRAY’S CLOTHING FROM STORES IN CAPE TOWN, JOHANNESBURG, STELLENBOSCH AND

OTHER PARTS OF THE COUNTRY.

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WHY THEMONEY TREE?

The Money Tree Magazine – a Student Investor (Pty) Ltd publication

THE TEAM: Joseph Makamba Busha (Chairman), Matthew Piper (Managing Director), Tokologo Phetla (Executive Director), Karidas Tshintsholo (Executive Director), Jack Newby (Executive Director), Siyabonga Mseleku

(Investment Writer), Tsepiso Secker (Chief Writer), Mmabato Thobejane (Relationship Manager)

You get access to:• Information about graduate recruitment opportunities • Information about opportunities for further study • Information about scholarship/bursary opportunities • Investing & personal � nance content • Market and economic analysis • Content and tips for your career • Student lifestyle content • Latest social events to look forward to • Cool entertainment news • “Ask the Elder” advice • Business and entrepreneurship advice and content • Games, gadgets and technology • Student Investor of the Issue • Pro� les of interesting people (possibly on YOUR

campus or school) • Free prizes through our competitions

…ALL in ONE Magazine At THE MONEY TREE, we pride ourselves in satisfying our target markets through research and diversi� cation of our products – we put YOUR interests � rst.

ADDRESS BY THE HONOURABLE MINISTER OF SCIENCE AND TECHNOLOGY, NALEDI PANDOR MP ON THE OCCASION OF THE SCIENCE AND TECHNOLOGY BUDGET VOTE, 22 JULY 2014

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Chairperson, Honourable Members, Ladies and Gentlemen,

Today we celebrate 20 years of freedom and positive progress in advancing research and innovation in the science and technology sector. Some of our many successes include advances in research into HIV/AIDS prevention and treatment, satellite building, winning the right to co-host the iconic Square Kilometre Array, discoveries in palaeontology, progress with alternative energy technologies, advances in �uorochemicals, and technology for improved service delivery. Through investing in research and development and innovation the ANC has made signi�cant contributions to meeting our triple challenges of poverty, inequality and joblessness.

The ANC won the last election on a manifesto that included a commitment to increase investment in research and development to 1.5% of GDP in this term of government. The ANC was the only party to make such a commitment. This signalled our belief that science and technology will play a prominent role in the radical socio-economic transformation of South Africa.

We are emboldened by the science and technology objectives outlined in the National Development Plan and believe that the report we will present to you today clearly signals that Vision 2030 is achievable.

The DST’s budget appropriation for 2014/15 is R6.47 billion.

The largest portion of the DST’s budget, R3.5 billion, is allocated to research and development. Of this, R1.7 billion is to be spent on research grants and bursaries. And in terms of guidelines I have provided we will focus on the following transformation targets over the MTEF period by increasing:

• The ratio of black to total researchers from

28% in 2013/14 to 40% in 2016/17.• The ratio of female to total researchers from

36% in 2013/14 to 50% in 2016/17.

• The ratio of black to total graduate students funded from 63% in 2013/14 to 71% in 2016/17.

• The ratio of female to total postgraduate students funded from 53% in 2013/14 to 55% in 2016/17.

The National Development Plan sets a target of 100,000 PhDs by 2030 to improve research and innovation capacity. In order to reach this target we need to train 6,000 PhDs per annum. We now produce just over 1,800 PhDs per year. To train 6,000 a year will cost an additional R5.8 billion a year.

Currently we lack research-supervision capacity and the doctoral-student pipeline is too narrow. We need to support researchers who are capable of supervising post-graduate students, and to create appropriate incentives for students to remain in the system up to doctoral level. We have recently begun investing in emerging researchers through post-doctoral fellowships in the Thuthuka programme, and research-career-advancement fellowships.

In order to attract young people to science, the DST will invest R497 million over the MTEF period in implementing a coordinated approach to science education, science awareness and science communication The programmes – run through the South African Agency for Science and Technology Advancement (SAASTA) – will reach about 350,000 learners and about 12,500 to 13,000 teachers per annum. The recent review of the National Research Foundation (NRF) indicated the need to reconsider the location and the funding model for SAASTA. We need a model that will allow SAASTA to scale-up public engagement and science awareness activities.

Our internship programme has supported youth development and employment. Between 2012 and 2014, 1,341 unemployed graduates were exposed to work experience in science, engineering and technology institutions. Of these, 58% were absorbed into permanent employment in the same institutions. Others have found employment elsewhere. The DST has allocated R80 million to fund 1,000 science postgraduates in the 2014/15 internship programme.

The South African Research Chairs Initiative (SARChI), one of the DST’s �agship programmes, has a total of 157 awarded

chairs, 128 of which have been �lled. Of these, 73% were recruited in South Africa, 21% are women and 28% are black. The DST plans to create an additional 20 chairs. The initiative has contributed to the transformation of the system by increasing the number of black and female researchers. Since its inception, the number of black postgraduate students has increased by 400%, and the number of female postgraduate students by 450%. We spend R451,879 on SARCHi this year.

We have established Centres of Excellence to promote inter disciplinary collaboration in research excellence. For example, the South African Centre for Epidemiological Modelling and Analysis (SACEMA) focuses on research in quantitative modelling of disease, with a strong focus on relevance to public health policy. The policy to circumcise men to reduce the HIV infections was a consequence of a SACEMA study/research. Or the Centre of Excellence on TB pioneered the use of molecular methods to characterize M. Tuberculosis strains, and these techniques are now used throughout Africa to gain insight into the mechanisms driving the epidemic. There are now 14 centres, and investment in them has increased at an average of 20% a year since 2010/11. We are exploring a further three centres – in AIDS, human settlements and water research, all in collaboration with other departments.

To enable South Africa to compete globally, we need to provide world-class infrastructure for research and development. One of these is iThemba LABS. iThemba LABS is the only facility on the African continent that provides accelerator-based radioisotopes for nuclear medicine, and also the only facility in Africa for specialist cancer treatment using protons and neutrons. This treatment is offered to those who have cancers that do not respond to traditional

The largest portion of the DST’s budget, R3,5 billion, is allocated to research and development.

We need to support researchers who are capable of supervising post-graduate students, and to create appropriate incentives for students to remain in the system up to doctoral level.

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treatments like chemotherapy and radiotherapy. Patients referred by state hospitals are treated free of charge, and over the past 25 years some 1,800 patients have been treated.

We continue to make progress on the MeerKAT project, for which R647 million is allocated in 2014, as well as building global partnerships for the Square Kilometre Array (SKA) project. Preparing for the huge amounts of data produced by the MeerKAT and the SKA is also preparing South Africa to play a leading role in “big data.” We believe South Africa can become a global leader in this area if we make the right interventions now.

I am pleased to announce that many students have been awarded grants by the SKA Project. The success rate of the programme has been very high, with 36 doctoral degrees, 95 master’s degrees, 59 honours degrees, 58 BSc and BEng degrees and 16 national diplomas awarded. The SKA is also supporting the training of artisans, and has awarded 42 bursaries to students from the Karoo, 16 of whom are already employed by SKA South Africa.

The global SKA project is growing. India is expected to become a full member of the SKA Organisation soon, joining an alliance of countries that are currently investing close to R2 billion in design and other preparatory work. Our partners in Australia, Canada, China, Italy, the Netherlands, New Zealand, Sweden and the United Kingdom are all �rmly committed to the SKA. Compared to other large-scale research infrastructure projects of its kind, the progress of the SKA is remarkable. This is in no small measure due to South African leadership and know-how. Dr Bernie Fanaroff and his team continue to do us proud.

The African Very Long Baseline Interferometry Network (AVN) is being rolled out and will involve our eight SKA African partner countries. Through the AVN programme, SKA South Africa, in partnership with the Hartebeesthoek Radio Astronomy Observatory, has also trained scientists and engineers from Ghana and Kenya, 13 of whom have spent six months to a year in

South Africa. The AVN programme will continue to assist them with further training in their home countries, and will help them to train more technicians and scientists.

Astronomy partnerships have also been initiated with China, India, Netherlands, the United Kingdom and the United States of America. Leading global astronomers such as Prof Russ Taylor are relocating to South Africa, taking up positions under the South African Research Chairs Programme, attracted by South Africa’s commitment to and investment in science. We are becoming a preferred destination not only for global research infrastructure but also for global research talent.

The South African National Space Agency (SANSA) receives R118 million this year. It provides valuable Earth observation data to enable informed decisions by government departments and public entities.

SANSA continues to provide state-of-the-art ground-station services to many globally recognised space missions, such as the NASA and Indian Space Research Organisation Mars missions, and NASA’s Orbiting Carbon Observatory-2, which is giving scientists a better idea of how carbon is contributing to climate change, answering important questions about precisely where carbon is coming from and where it is stored.

We have reorganised the programmes in the DST to give greater emphasis to technology. We now have a programme called “technology innovation” with a budget of R991 million. Its main agency is the Technology Innovation Agency (TIA). We aim to reposition TIA as an agency whose funding instruments will enable entrepreneurs and small and medium enterprises to commercialise their technology innovations. Since 2010 TIA has disbursed a total of R1.2 billion on project contracts and grants. The agency has supported close to 6,838 small and medium enterprises in accelerating technical innovation through technology development at a cost of R286 million. The services provided by TIA have enabled the enterprises to be more competitive and productive. The agency has also funded the placement of 501 interns in various sectors, including at of�ces of technology transfer and in venture capital companies.

A few examples illustrate TIA’s contribution to innovation. Through support from TIA, Future Fynbos, a company that focuses on the selection and breeding of indigenous fynbos, has shipped

its �rst commercial harvest, with 600,355 units sold in the local market and 10,000 units in the European Union. TIA also made a signi�cant contribution to the University of Cape Town’s H3-D Centre, which is Africa’s �rst modern integrated drug discovery and development centre, and has over the past four years had remarkable success, delivering the �rst clinical drug candidate to come from Africa. Additional funding of R55 million was leveraged from the Bill & Melinda Gates Foundation to support tuberculosis and malaria drug development programmes. The centre also received R3 million from the Wolfson Foundation towards infrastructure improvement.

I would like to congratulate Marlize Holtzhausen, who is in the gallery. Her Rapid Response cellphone app won the internationally renowned 2014 Googlefest pitching competition for technology entrepreneurs. Her participation in this contest was supported under the Swiss-South Africa Business Development Programme, an example of our thriving portfolio of international partnerships, and I thank our Swiss partners for their support in this successful initiative. Other �nalists were Drew van der Riet, working on advanced prosthetics, and Gavin Jones, who represented a University of Cape Town project on the rehabilitation of stroke patients.

Our support for research and development work in clean coal technologies through the carbon capture and storage chair at the South African National Energy Development Institute is bearing fruit. The CoalgaeTM initiative, part of the DST-funded biofuels programme at the Nelson Mandela Metropolitan University, will in the 2014/15 �nancial year strive to �nd partners to upscale the semi-commercial pilot plant and also to �nd potential investors for the commercialisation of this technology.

Another success is the Photovoltaic Technology Intellectual Property (PTIP), a solar energy spin-off

To enable South Africa to compete globally, we need to provide world-class infrastructure for research and development.

We aim to reposition TIA as an agency whose funding instruments will enable entrepreneurs and small and medium enterprises to commercialise their technology innovations.

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company from the University of Johannesburg, which was started in 2013. PTIP, in collaboration with a German-listed company (Singulus), manufactures photovoltaic thin �lms and is one of the very few global companies that are using copper indium gallium selenide. The DST is working closely with private sector partners to ensure the full commercialisation of the plant and the creation of jobs for the human capital being developed in institutions. This will be a huge contribution to government’s mandate of tackling poverty, inequality and unemployment.

As members can see, South Africa through the DST is fast becoming a preferred partner for research and innovation funding partnerships with international foundations. I believe that more funding should be available to the Technology Innovation Agency to fund commercialisation, as we do not as yet have a dynamic risk-taking venture capital system in South Africa. We are grateful to all our partners for their support.

In 2012 I announced the launch of the DST-Technology Top 100 internship programme, aimed at placing unemployed science, technology and engineering graduates in high technology companies. I am happy to report that the programme has over the last two years had an intake of 105 interns and that 25% of these interns have found permanent employment with their host companies at the end of the one-year programme. This year a further 65 candidates have been placed with companies in Gauteng and the Western Cape. We intend to grow the network of private sector companies interested in assisting us.

The DST’s Socio-economic Innovation Partnerships Programme receives a budget allocation of R1.5 billion. Of this, the Human Science Research Council (HSRC) receives R276 million and the Council for Scienti�c and Industrial Research (CSIR) receives R826 million. The CSIR is the biggest and best-resourced science laboratory complex in the country. It

accounts for 15% of government expenditure on research and development. Recently the CSIR adopted water sustainability, health, and safety and security as areas of integrated research and innovation. These three integrated research and innovation areas are in addition to the six already established research-impact �elds of industry, built environment, health, natural environment, defence and security, and energy. The HSRC continues to improve on its reputation as a public entity providing excellent social-science research in a range of �elds from reducing poverty to improving education, from improving gender relations to �ghting HIV/AIDS.

The DST’s International Cooperation and Resources Programme receives R119 million to promote relationships with global partners, leverage foreign investment in South African science and technology, afford training opportunities for South African researchers abroad, and enable cooperation that permits South Africa to share in international experience and expertise.

In the 2013/14 �nancial year, through science diplomacy and smart co-investments, the DST secured R253 million in science, technology and innovation funds from international partners.

This included a substantial partnership with the Bill & Melinda Gates Foundation in the health, water and sanitation domains, and a dedicated programme with the European Union harnessing innovation for poverty alleviation.

In the next �ve years, the DST will prioritise support, through cooperation with international partners, for science, technology and innovation capacity-building in Africa. African Heads of State recently approved an ambitious continental framework, the Science, Technology and Innovation Strategy for Africa. South Africa plans to be at the forefront of implementing this strategy.

The DST will step up its efforts to make South Africa a preferred destination for foreign science, technology and innovation investment. We would like to encourage international companies to locate their research and development facilities to South Africa. General Electric, for example, recently announced a R500 million investment in a customer innovation centre located in Gauteng, which will assist in developing the company’s global technology platforms for local market needs, and a further R200 million to support South African small and medium enterprises, notably through technology transfer.

In closing, I would like to express my sincere appreciation to Deputy Minister Magwaza-Msibi, Dr Phil Mjwara, the Director-General of Science and Technology, and the staff of the Department for their hard work and commitment to making a difference in addressing poverty, inequality and unemployment. Thanks also to my staff in the Ministry for their hard work and support.

Likewise, I thank the Portfolio Committee on Science and Technology for all they have done and will do to facilitate the realisation of the goals set for science and technology in the National Development Plan.

We remain committed to taking South Africa forward by using science, technology and innovation for socio-economic growth and transformation.

South Africa through the DST is fast becoming a preferred partner for research and innovation funding partnerships with international foundations.

The DST will step up its efforts to make South Africa a preferred destination for foreign science, technology and innovation investment.

We are becoming a preferred destination not only for global research infrastructure but also for global research talent.

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The recent �uctuation and volatility in the stock market should remind us of one of my favourite quotes by Benjamin Graham: “Stock owners should not be too concerned with erratic

�uctuations in stock prices, since in the short term, the stock market behaves like a voting machine, but in the long term it acts like a weighing machine.” Simply put, in the short term markets are rather inef�cient, but in the long term these inef�ciencies will work themselves out of the system to re�ect the true value of assets.

Equity markets, both locally and globally, are at all-time highs. The JSE All Share index reached an all-time high of 52,123 on 7 July 2014. A week

earlier the Dow Jones Industrial Average touched 17,075 for the �rst time in its 188 year history, while the NASDAQ index touched 4,486, near its all-time high of 4,573 reached during the technology dot com bubble in March 2000. The German DAX index is trading at 10,051, which is an all-time high as well, while London’s FTSE 100 is just 35 points shy of its all-time of 6,930, trading at 6,895 (at the time of going to print).

What is driving the market? We believe there are only two sources of returns for any investor in any asset class: capital growth and income. Income is derived from dividends, coupons or rental income, etc., while capital growth is a function of price appreciation which is driven by

ECONOMIC REPORT

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(1) earnings growth, and (2) the rating/derating of the market, which is simply what investors are prepared to pay for the future earnings generated by the investment.

South African equities have rallied mainly as a result of the re-rating in the market. The JSE All Share Index is trading at a price-to-earnings ratio last seen in 1994. This is also only the third time in the history of the JSE since 1960 that the market has traded at or above the current levels.

On the dividends front, company re-investment rates are sitting at all-time lows as measured by the dividend payout ratio. The dividend payout ratio reached its all time high of 57% in the last quarter of 2013, implying preference by companies to pay out shareholder cash returns and reluctance to re-invest due to a sluggish economy and policy uncertainty.

However, the picture is somewhat different when we analyse the third pillar of investment returns, which is earnings growth. While the market is recording all-time highs, the earnings trend re� ects a downward trajectory. It tells us that only two things have been driving the market higher: cash shareholder returns in the form of dividends and an appetite by investors to pay more for future earnings.

How sustainable is the rally and can we expect the equities to continue on this trajectory in the short to medium term? We believe much will depend on the actions of central banks around the world. The global � nancial crisis of 2008 and the subsequent liquidity crunch led to central banks the world over adopting accommodating monetary policy in the form of stimuli and record low interest rates. That meant interest-bearing asset classes such as bonds and cash become unfavourable investments. We believe this will give equities some continued support as the preferred asset class for investors. We, however, caution that the elevated dividends are not sustainable and companies will have to start re-investing for sustainable future earnings growth. The trajectory of earnings is a concern for us and we believe we could see a material pull back or correction in the equity market in the short to medium term.

“Stock owners should not be too concerned with erratic � uctuations in stock prices, since in the short term, the stock market behaves like a voting machine, but in the long term it acts like a weighing machine.” – Benjamin Graham

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A STRONG CUP OF COFFEE FOR THE ECONOMYBY TSEPISO SECKER

Strikes, load shedding, youth unemployment and homestead upgrades have left the South African economy tired and in need of a spurt of energy. A report released by the International

Monetary Fund in April 2014 indicated that South Africa’s growth projection slumped down to 2.3% – the worst the economy has performed since 2009. As the public and private sectors look for macroeconomic solutions to the problems facing South Africa, the gravitation towards Small and Medium Enterprises (SMEs) indicates that South African citizens are joining the attempt to energise the economy. What better way to revitalise an economy than to add caffeine to its system? This is exactly what Yours Truly café owner Daniel Holland and other coffee shop owners like him are doing, and it is this energy that South Africa needs.

The Money Tree interviewed entrepreneur and coffee-artisan Daniel Holland to �nd out more about his SME, the popular and successful Yours Truly café. Yours Truly started out as a small café on Long Street in Cape Town in 2010. Four years later, Holland owns a second Yours Truly, not far from his �rst and fruitful one. The second one is niched on Kloof Street in the City Bowl and opened in November 2013. It was in this new and comfortable café that our interview with Daniel Holland took place.

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The Money Tree (TMT): Why and how did you create Yours Truly?Daniel Holland (DH): I wanted to sell coffee – it was a long time coming. I waited tables while studying textile design at university and continued to do so even after I graduated and started working as a graphic designer. The combination of customer interaction and making people happy gave me a kick. I worked hard and saved as much as I could for four years. My savings, along with a loan from my parents (who realised how serious I was about turning this dream into a reality), enabled me to get Yours Truly off the ground. It wasn’t easy: at the time coffee shops weren’t as popular as they are now. It was a new concept and getting funding was tough, understandably so, since there was little to use as a comparison for success. Many young people deem dreams of starting their own businesses unachievable – this is not the case. It’s all about �nding a venture you love and following through.

TMT: What about Yours Truly is special for you?DH: I certainly wasn’t born with a silver spoon in my mouth but the support I received from my family, both motivationally and �nancially, made realising this dream possible. With the Long Street shop especially, the heart and soul that went into its creation is what makes it so special. I remember my family literally hammering nails into the wall and growing plants for a shop that was bare. Yours Truly’s existence is largely due the support of family and friends and how they believed in this dream in a time where coffee shops were a relative rarity.

TMT: Is the concept of Yours Truly that you held in your mind the same as the Yours Truly that exists today?DH: I really just wanted to sell coffee. I wanted a small space with few overhead costs. After having many doors shut in my face daily, I had to keep the dream as practical as possible. I didn’t anticipate turning it into a food café either; sandwiches and croissants were secondary to the coffee dream. I’m not even that much of a food connoisseur. I started off with chairs, tables and a coffee machine – I didn’t even have a card machine. So what I envisioned as a 9m² space where I could make people smile and serve coffee is now two 30m²-80m² cafes.

TMT: When did you have your “I want to be an entrepreneur” moment?DH: I’ve always sort of been quite money hungry. When I was about nine years old I used to make “letter openers” and sell them for ridiculous prices to old ladies who pitied me. And during school, I had a successful clothing label, if I can even call it that. I’d stand in assembly and advertise these clothes that I’d sell under a tree during break and after school. I’m proud to say I made a small fortune, well, what seemed like a fortune to me at the time.

Yours Truly’s existence is largely due the support of family and friends and how they believed in this dream in a time where coffee shops were a relative rarity.

What better way to revitalise an economy than to add caffeine to its

system?

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TMT: Through the entire process of transporting Yours Truly from a concept to a brick-and-mortar business, from both the successes and the hurdles, what has been the most memorable point?DH: There hasn’t been one particular moment really, but probably the biggest highlight was the opening of each shop; especially the one on Long Street. It’s a goose bump moment: I remember the store opening – it was a Saturday morning, 7 November 2010. I opened Yours Truly that morning with a R200 bank balance. It was such a risk, because I could have opened those doors and not have made enough to get stock for Monday’s sales. By 11:00am, I had sold out all the coffee and sandwiches I had planned to sell that day. I’ve been lucky to have the opening of both stores be equally successful. On the opening evening of the shop on Kloof Street, we had foot-�ow of about 300 to 400 people. The successful reception of both shops stands out the most for me.

TMT: What would you tell the Daniel at the beginning of the process?DH: “Maybe try to get a little bit more money?” On a serious note, I would say “Don’t rush into it.” Starting and running your own business means a huge amount of sacri�ce and there are things I wish I would have done more, like travel or do more of what I wanted. However, I had a commitment that was entirely dependent on me. I would advise him not to be so adamant to open the shop so quickly. Lifestyle is something that is so undervalued. As a young person, it is important to enjoy and live in the place where you are in your life.

TMT: If not entrepreneurship, what?DH: Architecture… As if I had the marks for it. I probably would have gone for a degree that would offer the most �nancial stability, something like accounting or law.

TMT: Where do you see Yours Truly �ve years from now?DH: De�nitely another Yours Truly in Cape Town. I want to have at least three shops that are successful. The bigger plan is to also branch into other business ventures, but this time in a partnership. I’ve never been in a partnership and after running Yours Truly by myself; I feel it’s necessary for my next adventure to have the duties and responsibilities shared among a few more people. Yours Truly, however, will remain under my sole ownership.

TMT: What is your favourite item on the menu?DH: On the day-menu, it’s a �at white with a salmon, brie and avocado croissant. On the night-menu, it’s de�nitely the Darling Slow Beer and the Nice to Meaty Pizza.

As the conversation progressed, we discussed Holland’s travels to New York and the topic of barriers to entry as a coffee shop owner in South Africa compared to those in other places. Holland believes that South Africa de�nitely has a more absorbent market for new business owners, although he feels fortunate to have entered the market when he did, because, at the time, coffee shops were more rare. In the past four years, competition has stiffened. This is a positive for the South African market, as competition stimulates growth and pushes business owners to increase ef�ciency; a trend which Holland says is strong in New York due

to the high concentration of coffee shops. In South Africa, opportunity lies in almost everything. As an emerging

market, there are skill-gaps to be �lled and many business avenues to be explored. More so, young South Africans need to take lessons from entrepreneurs such as Daniel Holland and apply them to their own ventures in order to propel a weary economy. Macroeconomic structures and institutions are fruitless if South Africans are not able to make effective use of them. One of the key factors to growth in emerging markets lies within successful SMEs. Think upon that the next time you enter a coffee shop.

Starting and running your own business means a huge amount of sacri�ce and there are things I wish I would have done more.

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Compounding is when the interest on a sum of money, either a deposit or loan, is added to the original amount so that the interest also earns interest.

Albert Einstein’s popular quote highlights the impact compounding can have over time, and also cautions that it can work either for or against you.

When you invest, time allows your invested money to grow and compounding makes your money work harder for you. Given a long enough period to work, compounding can dramatically multiply the value of your investment so that less of your total investment will be from your contributions and more from growth.

On the other hand, while compounding can be seen as the magic ingredient for successful investing, the same mechanism works against you when you borrow money, for example, through store cards, credit cards or a personal loan. The amount you owe earns interest over time and through the effect of compounding, the cost of credit can work out to substantially more than the cash amount you borrowed, depending on the interest you are charged

and the length of time you will be paying the loan back.

How does compounding actually work?The impact compounding will have on either an investment or a loan depends on: The amount invested or borrowed The time period The growth rate (the rate of return on an investment or the interest charged on a loan)

The compounding frequency – the more frequently interest is added to the original amount, the greater the impact of compounding. For example, daily compounding on an investment means that you earn returns today on ♦ the amount you invested ♦ as well as on the returns you earned

yesterday on the returns you earned the day before.

This has a greater impact than compounding monthly, which in turn has a greater impact than compounding annually.

Table 1 uses an investment of R10 000 and annual compounding at a rate of 10% to illustrate how compounding works.

After 20 years your R10 000 investment would have grown to R67 275 – a gain of R57 275. If your returns had not been added to the original amount and left to grow, if you had spent them instead, the total gain from your investment would only be R20 000. And since you would have spent this R20 000, you would only have the original R10 000 still invested.

How do you ensure compounding works for you?To bene�t from compounding, you �rst have to start saving – and the sooner you start the better. You also have to be disciplined and not spend the money your investment makes before you reach your savings goal.

The cliché that good things come to those who wait is especially true when it comes to compounding. Both the decision to invest and the decision whether or not to use credit are essentially choices between instant and delayed grati�cation. If you choose to use credit you will have to pay for the bene�t of instant grati�cation, whereas if you choose to save you will be rewarded for delaying grati�cation.

Table 1: How compounding works

COMPOUNDING can do for you

What “Compound interest is the eighth wonder of the world. Those who understand it, earn it ... those who don’t ... pay it.” Albert Einstein

Year oneYear twoYear three

Amount of your investment

R10 000R11 000R12 100

Total amount with return earned

R11 000R12 100R13 310

Return rate

10% annually = R1 00010% annually = R1 10010% annually = R1 210

The basics

Investing can be described as using your money to buy

something that you believe will earn you more money

over time. Depending on what you invest in, and how

you choose to invest, you may make a pro�t if you sell

your investment for more than you paid for it or you

might earn income while you own it. The portion you

earn is known as the return on your investment.

Be clear about what you want to achieve

The aim of investing is to make the money you set aside

for your investment goals, such as your retirement,

your children’s education, or a holiday, grow over time.

When you decide to invest it is important to consider

what your investment time horizon is, which is the

amount of time you have before you’ll need

your money.

This depends on your goal. If you’re saving for

retirement, your time horizon is anywhere up to

40 years, depending on how old you are when you start

saving. If you’re saving for your children’s education,

the time horizon might be anywhere upwards from �ve

years, and if you’re saving for a holiday, it might be one

year, or less.

Time is both an enemy and an ally

Over time, the value of money tends to decrease, and

you’re able to buy less with the same amount of rands.

This is called in�ation. The impact of in�ation is more

signi�cant the longer you’re invested.

It’s important that your investment earns enough

returns to maintain or increase the buying power of

the money you invested.

Time is also an important ingredient that allows your

invested money to grow. The length of time you have

available to invest can help you decide on the type

of risk you would be willing to take, such as waiting

out short-term ups and downs in your investment

performance in order to achieve long-term rewards.

Learn more about investing at:

www.allangray.co.za/investingexplained/

INVESTING – GETTING STARTED While investing can be a daunting subject for some, if you familiarise yourself with the terminology and get to knowthe basics, it’s bound to seem less intimidating.

Allan Gray Proprietary Limited is an authorised financial services provider.

Thandi Ngwane:Head of Emerging Markets at Allan Gray

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He’s been called everything from “The darling of NASA,” to South Africa’s own rocket scientist. Now, one of engineering’s highest-�iers, Siyabulela Lethuxolo Xuza’s latest accolade has been his selection as the country’s newest Audi Ambassador.

A born innovator, Xuza says he got hooked on science at the age of �ve, while standing on his rural plot near Mthatha in 1994 when he saw a light aircraft for the �rst time. Xuza began experimenting with rocket fuels in his mother’s kitchen when he was 12. He built his own rocket after watching Mark Shuttleworth’s space �ight in 2002, but it exploded on the launch-pad. His next attempt a year later, broke the national amateur altitude record at nearly 1,000 metres.

This passion turned into a serious science project that culminated in him developing a cheaper and safer rocket fuel. The project won gold at the National Science Expo and the Dr Derek Gray Memorial award for the most prestigious project in South Africa. This led to an invitation to the International Youth Science Fair in Sweden in 2006, where he attended the Nobel Prize ceremony in Stockholm.

In 2010 Xuza was elected as a fellow of the African Leadership Network, a group of dynamic, in�uential and successful leaders and entrepreneurs in Africa who are poised to shape Africa’s future over the next decade. He recently became the youngest member of the African Union-af�liated Africa 2.0 energy advisory panel.

Regarded as one of South Africa’s top scientists, he graduated from Harvard University’s School of Engineering and Applied Sciences in 2013 and returned to South Africa. In 2011 he attended the launch of the space shuttle Endeavour as a guest of NASA, and met US First Lady Michelle Obama. A large asteroid, Siyaxuza, was named after him in honour of his work developing a record-breaking rocket fuel and creating safer, more energy-ef�cient rocket fuel.

Ryan Searle, Head of Audi South Africa, says that Xuza, who is now driving an Audi A4 2.0T Quattro, was chosen because he “is part of the young generation of Africans who are committed to developing the continent’s potential. His passion for his subject and his enthusiasm is truly inspiring.”

SIYABULELA XUZA

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SA’S ROCKET SCIENTIST

Xuza began experimenting with

rocket fuels in his mother’s kitchen when he was 12.

ENTREPRENEURIAL EDGE SCIENCE & TECHNOLOGY

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TAKE ON THEWORLD, NOTJUST A BIT OF IT.

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Two Eastern Cape young entrepreneurs who founded a company called Millbug recently announced the launch of their Vuya Tablet PC, a solar powered tablet that will facilitate mobile computing in areas with intermittent access to electricity.

Less than 1% of content online is created by Africans and Millbug believes that this alarming statistic needs urgent attention. The Vuya Tablet PC, therefore, is aimed at allowing for greater participation by Africans in the digital economy. Instead of celebrating the rise of the African consumer, they say, this device seeks to catalyse the rise of the African producer.

The �rm was founded by Sabelo Sibanda (30) and Thulisile Volwana (23) in 2012 as an e-commerce company that sold fashionable women’s clothing to millennials. The company was nominated for a South African e-commerce award in the same year and gained many valuable insights on e-commerce, Internet proliferation and technology use habits across the continent.

“Our conversion rates told a very interesting story about how our fellow millennials use the Internet,” says Sibanda, now CEO of Millbug. Volwana, the COO, explains, “People are more inclined to purchase tactile products online from devices with larger screen sizes – such as tablet PCs, laptops and desktops – and are more inclined to purchase digital content from mobile devices – such as tablet PCs and mobile phones.”

It was through this discovery that the pair embarked on the development of a rugged, yet aesthetically pleasing tablet that effortlessly runs on the Android 4.4 KitKat operating system. The tablet has a 1.2 GHz processor, 512 MB of RAM, 4 GB of storage a photovoltaic (solar) power source as well as the ability to be charged using USB or a traditional power outlet. The tablet will retail for no more than R1,499.99 to ensure that it is within reach of its users.

Millbug received �nancial assistance from the SEDA ICT incubator for the certi�cation of the device as well as consultation and mentoring from Ellen Fischat and Sipelo Lupondwana of the same Incubator. Millbug is incubated at the Port Elizabeth chapter of Shanduka Black Umbrellas. Volwana is currently an Economics graduate at NMMU and Sibanda is an MBA student at the Edinburgh Business School at Heriot-Watt University in Scotland.

Asked what they have learned about entrepreneurship in Africa, they say, “As it is anywhere else, it is dependant on an understanding of people’s culture. We have been and always are in the process of learning about and observing the cultural norms of our clients. Ultimately, it involves learning and collaboration – the very same tenets to which many attribute the success of Silicon Valley.”

Their advice to young people who think they have a great idea is to �rst create a product from that idea, start selling it and then look for venture capital, if you need it. “We’ve learnt in our experience that investors are interested in businesses, not ideas.” They also stress the importance of reading. “We would love to encourage all young people to read. The secrets to success are only hidden to those who do not read good books or stay current.“

Learn more: http://millbug.com/category/tablet-pc/

HOME-GROWN SOLAR POWERED TABLET PC

Vuya means “be happy” in isiXhosa and it is the intention of the Millbug founders to bring happiness to those that need it the most. P

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African EduWeek is an annual event that showcases the latest in classroom technology. One highlight of this year’s conference was the demonstration of

the BrailleNote Apex, a computer that assists blind learners, developed by Edit Microsystems, a leading supplier of educational and corporate technology solutions in Southern Africa.

“If I had had this technology when I was still in school, I would probably have become a heart surgeon,” says 22-year-old Kyle Williams, IT specialist at Edit Microsystems, which provides onsite support to the Athlone School for the Blind in Cape Town. Kyle is visually impaired and a former pupil of the school and currently assists the learners and teachers of the school to use 44 new BrailleNote Apex computers they’ve received, thanks to the Western Cape Education Department.

Says Williams, “What we are currently doing is revolutionising education and learning for those with visual impairments, making education and studying much easier. It is 99.9% similar to a laptop with a daily planner, access to email and Internet. There is a media centre for radio, a scienti� c calculator and a built-in chat function.” The BrailleNote Apex has a braille terminal and at the school is connected to a computer screen for the teachers to follow what the learners are doing. It can also be connected to a smart phone.

The Athlone School for the Blind principal Fletcher Fisher says, “The BrailleNote Apex is very expensive but it is going to change the face of education for the visually impaired in South Africa.” He explains that learners no longer have to carry around enormous braille books and the traditional, heavy Perkins braille typewriter. With the braille computer, all the work can

be uploaded electronically. The school is currently using the technology for

learners from Grade 4 up to Grade 12. Jessica, a 15-year-old student, loves the new technology. “The Apex is much more accessible and an easy to use device for us,” she says. “We can browse the Internet and get more work done in less time. It was also fairly easy to learn how to use. I can’t wait for my lessons now.”

“We are very passionate about inclusive technology,” says Pieter Labuschagne, MD of Edit Microsystems. “We think every single person should be able to be included in areas that traditionally were not available to them, whether it is in school or in the work environment.” He continues: “Athlone School in particular is one of the schools that we work with that embraced this technology absolutely instantly and all credit should go to the staff and the principal in particular who drive that project. I think whatever project you tackle, whether it is low tech or high tech, you need a passionate principal, to champion a project like this.”

At African EduWeek, Edit Microsystems displayed not only their BrailleNote Apex but also a scanner that can convert printed text into braille, sound or electronic format. Gerhard Erasmus, in charge of Blindness and Low Vision Sales and Support at Edit Microsystems, is blind and has been using the BrailleNote devices for 10 years. He says, “A device like the BrailleNote Apex and the scanner we sell really simpli� es the way we make content available to learners – getting ebooks from publishers, essays and question papers onto memory sticks. You don’t have to be part of a small world anymore, you can join the world.”

“If I had had this technology when I was still in school, I would probably have become a heart surgeon.” – Kyle Williams, IT specialist at Edit Microsystems

15-year-old Jessica, a learner at Athlone School for the Blind. The screens are for the teachers to see what the learners are doing.

Kyle with the BrailleNote Apex Reader. To his left is the old, heavy braille typewriter, the Perkins Brailler.

INTO THE LIGHT

EDUCATIONAL TECH FOR THE BLIND

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ECOBRICK EXCHANGETURNING TRASH INTO TREASURE

Here’s an amazing way to help reduce land� lls by using unrecyclable plastic waste while at the same time creating a greener future and building community centres and schools.

EcoBricks are essentially 2-litre plastic bottles, like a Coke bottle, that have unrecyclable plastic waste – such as styrofoam, chips packets, food wraps, etc. – tightly compressed into them with a stick. The � nal product is a rock solid EcoBrick weighing about 500g that is thermo insulated, durable and virtually made for free. It can then be used as building material by sandwiching the bottles between lightweight steel frames and plastered boarding and then � lling the void around the bottles with sand. Or, turned into benches and tables in a lego-like interlocking process with simple silicone used to join the bottles.

The EcoBrick Exchange in Port Elizabeth was founded by Ian Dommisse, a freelance architect, and the team includes Kinga Mnich, Sebastian Kuhn and Ilze Stegmann. On a visit to the Greyton Transition Town initiative, Domisse was inspired by work he learned about that was being done in poor, rural areas of Latin America, where ecobricks are becoming a common form of building material. The EcoBrick’s � rst project in South Africa is to build a preschool for the Penguins Play & Learn Centre in Walmer Township, Port Elizabeth.

Building with bottles is obviously much cheaper than using cinder blocks or bricks. But equally important is that the unrecyclable plastics that go into ecobricks help clean up the environment, the process teaches lessons about environmental sustainability, and it has the potential to involve an entire community in the construction, resulting in a sense of pride and ownership.

A clever innovation that EcoBrick Exchange has introduced, which explains the “exchange” bit in their name, is that small businesses across PE have volunteered as drop off points, and in return for customers bringing in bricks, the shop offers a discount. The exchange concept goes further. The EcoBrick Exchange is setting up a community swap shop where donated items, such as clothes, bikes, unwanted furniture, are assigned an “ecobrick value” so that members of the township can swap completed ecobricks for items they need (eg a jersey might be exchanged for 10 ecobricks). The Exchange hopes that this will inspire members of the community to clear their streets of litter, attach value to trash, and become environmentally aware.

HOW TO MAKE AN ECOBRICKTightly twist any plastic waste such as plastic food packaging, chips packets, wax paper, dog food bags, etc. and squish it into a 2-litre Coke (or other similar shape) bottle. Compress the plastic waste with a piece of bamboo or dowel stick so that there is little air space between the plastic. The completed bottle should weigh 500g.

You can help by making some at home (or get your school involved) and then donating yours. An installation will be on display at the Cape Town Open Design festival at the EcoBrick Star Lounge just outside the Cape Town City Hall from 13 – 23rd August.

Find out more: https://www.facebook.com/EcoBrickExchange

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Girls can excel in STEMI (science, technology, engineering, mathematics and innovation) if given the platform to shine. The South African team at the 2014 International Super Computing competition (ISC14) has con� rmed this by exhibiting to the

world that the country not only takes ICT innovation and cultivating an environment for students to � ourish but takes women empowerment in the � eld seriously. On their way to grabbing gold, the South African team of six was comprised of two outstanding young women: Nicole Thomas and Ellen Nxala. This was the largest representation of females by any country at the world event.

The South African CHPC team was the overall winner, with the University of Science and Technology from China in second and Tsingua University, also from China, in third. Members of the SA team were Nicole Thomas, Warren Jacobs, Saeed Natha, Ellen Nxala, Pieter Malan, Eugene de Beste, Kevin Beyers, and Hardus Bodenstein. The team’s advisors were David Mcleod and Vernon Nicholls. Ellen Baphumelele (Baps) Nxala is a maths student from Fort Hare who led a team in last year’s SA cluster competition championships. Nicole Thomas is an astrophysics student from UWC that was part of Team Youdubs, the winning team at the SA champs.

The ISC14’s Student Cluster Competition is an opportunity to showcase student expertise in a friendly yet spirited competition. Held as part of HPC Interconnections, the Student Cluster Competition is designed to introduce the next generation of students to the high-performance computing community.

In this real-time, non-stop, 48-hour challenge, teams of undergraduate and/or high school students assemble a small cluster on the exhibit � oor and race to demonstrate the greatest sustained performance across

a series of applications. Prior to the competition, the teams worked with their advisors and vendor partners who are domain specialists to design and build a cutting-edge, commercially available small cluster constrained by the 26-amp power limit (Standard track) or $2,500 USD cost limit and a 15-amp power limit (Commodity track). The South African team was sponsored by Dell, Nvidia and Mellanox Technologies.

During ISC14 teams assembled, tested, and tuned their machines. In full view of conference attendees, teams executed the prescribed workload while showing progress and science visualization output on large, high-resolution displays in their areas. Teams raced to correctly complete the greatest number of application runs during the

competition period until the close of the exhibit � oor after 48 hours.

The sterling performance from the South African team, which was the most diverse in terms of both gender and ethnicity, shows that nothing is impossible with unity towards a common purpose. It is essential that SA celebrates this victory and rides on this wave of success to further the cause of previously disadvantaged groups, especially girls and women, in

ICT. There is a great need for SA to stimulate the number of girls pursuing technically inclined STEM subjects and careers. It is my hope that the South African CHPC team members and all like-minded youths in SA will raise the South African � ag higher in the ICT � eld by becoming eminent innovators like Mark Zuckerberg, Elon Musk and others. Policy makers, corporates, schools, universities and non-governmental organisations should work together in nurturing the much-needed ICT talent in every feasible way. I would personally want to see an innovative district set up like Silicon Valley where innovators churn ideas and take them into the world.

This sterling performance from the South African team, which was the most diverse in terms of both gender and ethnicity, shows that nothing

is impossible with unity towards a common purpose.

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*Edzai Conilias Zvobwo is the CEO of MathsGenius Leadership Institute and is passionate about empowering youths to soar high in STEMI (science, technology, engineering, mathematics and innovation) and leadership. Learn more http://mathsgenius.co.za/

BY EDZAI CONILIAS ZVOBWO*

SA TEAM SHINES

IN WORLD SUPERCOMPUTING

COMPETITIONBY EDZAI CONILIAS ZVOBWO*

SA TEAM SHINES

IN WORLD SUPERCOMPUTING

COMPETITION

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ZEST MOBILE BY DAVID LINDEQUE (FOUNDER)

I believe that Africa holds massive potential for mobile and other areas of technology. The continent is experiencing massive growth and, thus, mobile communication has never been more important. I started Zest Mobile because I was unhappy with the state of the

market. I was unhappy paying international �rms exorbitant prices for good technology, but was also frustrated with the fact that South Africa was nowhere on the mobile technology map. I wanted to change this. Many successful countries have their own homegrown mobile technology �rms that they are proud of, with the USA having Apple, China having Oppo, etc. South Africa does not.

Zest morphed from being simply an entrepreneurial goal into more of a vision. This vision is one in which South Africans, and Africans in other nations, are empowered through being offered mobile devices and solutions that are extremely powerful yet still affordable. For too long we have been stuck in the conundrum where high-performance technology is overpriced, but affordable technology offers mediocre speci�cations. I wanted to bridge this gap with Zest and the products we would offer.

Another point of concern is that owning and using powerful mobile technology is only one side of the coin; data access is equally as vital. Data prices in Africa are extremely high and unaffordable to most who want to use their smartphone with no constraints. To solve this, we partnered with Afrihost and together aim to change the market in South Africa. Upon launch, users were offered the powerful Zest T1 mobile phone with 1GB free mobile data every month, while never having to enter any form of contract. If the user exhausts this free allocation, they are given the option to recharge their data at South Africa’s lowest recharge rate of 10c per MB.

Zest aims to grow into a brand that consumers are proud to use. We are pleased with the way the market is accepting us, having sold 1,000 units in the �rst 17 minutes of going on sale and over 3,000 on the �rst day. We will be releasing our second device in the near future. This will be called the Zest Accelerate and will be a slightly more high-end phone, yet still offering unparalleled value if one considers the price versus the speci�cations.

South Africa has lacked a mobile technology company that starts from the ground and grows, actually developing its own product line and putting the client �rst with unmatched service. Keep your eye on Zest.

http://zestmobile.net

For too long we have been stuck in the conundrum where high-performance technology is overpriced, but affordable technology offers mediocre speci�cations.

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Gain access to• the JM Busha Student Investor scholarship• media exposure across all our platforms

• work experience and internships• skills and career development workshops• R1,000 in a JM Busha Student Investor fund

Join the movement that will change the shape of South Africa’s youth!Become a Student Investor Ambassador and be the driving force behind unlocking the potential

of young people.

WE ARE LOOKING FOR DRIVEN, OUTGOING STUDENTS (FROM GRADE 11 TO 2ND YEAR UNIVERSITY) TO JOIN US ON THIS JOURNEY.

We want to help you realise your potential, so that you can do the same for others.Apply at www.studentinvestor.co.za/ambassadorApplications close 30 September 2014 at 5:00pm

... all while being involved in roadshows, presentations and mentorship.

Join the movement that will change the shape of South Africa’s youth!Become a Student Investor Ambassador and be the driving force behind unlocking the potential

THE DEPARTMENT OF SCIENCE & TECHNOLOGY’S BUDGET VOTEBEHIND THE SCENES

SCIENCE & TECHNOLOGY

BY MATTHEW PIPER

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Representatives from The Money Tree magazine were invited to attend the events surrounding the Budget Vote on Science and Technology.

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L to R: Deputy Minister of DST, Zanele Kamagwaza Msibi, Director of Operations & Strategy of Student Investor, Tokologo Phetla, and Minister of DST, Naledi Pandor, with a copy of The Money Tree magazine

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The South African government vote on the budget for the Department of Science & Technology was not just a day with speeches and talk about

money, it was an interesting insight into the real projects and people who drive a huge part of our economy. We had the chance to spend some time at the exhibition stands, talking to many of the brains behind projects, such as the Square Kilometre Array (SKA), the National Research Foundation and the South African National Space Agency (SANSA). We were inspired by the passion and enthusiasm of the many individuals and organisations solving real problems in innovative ways.

We spent some time speaking to Samuel Ginsberg from the University of Cape Town (UCT), a man behind a lot of the work at an organisation called Khusela. They have developed a device to help save people from devastating shack �res. The device can detect a rapid change in temperature in a shack, thereby indicating a �re, and can sound an alarm. Using radio technology, if this alarm is not turned off after 30 seconds, it will notify the surrounding shacks that there is danger. Khusela have been running their pilot program with 2,000 devices since October last year in Hout Bay at Imizamo Yethu and at Masiphumelele near Kommetjie and Noordhoek, among other settlements. This application of technology to social problems is a great example of positive change.

Francois Kapp, Technology Development Manager at the SKA South Africa, spoke to us about the huge long-term human capital development being created because of the SKA project. Beyond the enormous scienti�c discoveries the SKA represents are the positive spin-offs that such a project can generate, and which young people interested in this �eld need to capitalise on. The opportunities to develop new technologies by emerging scientists are in abundance, and the SKA organisation is committed to developing young aspiring scientists through their bursaries to Phd and Masters degree students.

These are just two stories of many, many exciting initiatives that were present at the exhibition in the �elds of science and technology advancement, all being supported by the Department of Science and Technology. The allocation of the Department’s budget is, therefore, of pivotal importance in the development of these projects, and the impact that they can have on society.

In order to understand the direction our country’s support for science and technology is going, it is interesting to look at these budgets (for more detail, read Minister Naledi Pandor’s speech on page 14 and the Budget Overview on page 34). It is very clear through this, that young people are a key element in equation.

This is evident in the R497 million allocated towards science education, awareness and communication. In any country, the success of the future is a product of an investment in the youth, and we are glad to see this in the budget.

One of the concerns raised about the Department of Science and Technology in the upcoming years was regarding its ability to educate the “person on the ground” around answering the complicated scienti�c questions we face. There was also a concern that the Department is undervalued because of the comparatively low percentage of GDP spent on its

budget compared to other countries. South Korea, for example, spends 4% of their GDP. With a budget of 1.5% of GDP expected in the near future in South Africa, however, we believe even more can still be done to fund this integral part of our country’s development.

The lunch after the budget vote gave us an in-depth appreciation of the commitment of various Directors to their projects – from food technology to human resource development. We were joined by academics, Vice Chancellors of various universities, CEOs in numerous industries, and key players in the DST, over a lunch with incredible local music and exquisite catering. Their openness to partnerships, their urge to educate and share, and their general desire to solve our country’s problems in the most innovative ways possible gave us a sense of great optimism for our future. The lunch was hosted in the beautiful Centre For The Book. Speakers included CEO of CSIR, Dr Sibisiso Sibisi, and both the Minister and Deputy Minister of the DST, Naledi Pandor and Zanele kaMagwaza-Msibi. Dr Sibisi’s speech gave an insightful view into the history of CSIR and its achievements, as well as its impact on South Africa’s economy.

We encourage all young people to look into the exciting projects the Department of Science and Technology are involved in. In the words of Albert Einstein: “The important thing is to never stop questioning.” This is the crux of all scienti�c research and subsequent discovery. Stay curious, question everything – science is in everything we do.

Meeting with the many different individuals tasked with these goals during the day gave us an in-depth appreciation of the commitment of various directors to their projects.

34

Department of Science and Technology Budget Guide for the 2014/15 Financial Year

Strategic overview of the Department

The advances in science and technology have proved to be crucial for socio-economic growth and improvements to health and education systems, infrastructure and general productivity.

The Department of Science and Technology (DST) executes its mandate through the implementation of the 1996 White Paper on Science and Technology, the National Research and Development Strategy and the Ten-Year Innovation Plan. The DST continues to align its strategies and plans with the priorities of the National Development Plan (NDP), which considers science, technology and innovation to be key drivers of the South African development agenda. In order to realise the potential of science and technology as an engine of growth, investment needs to be made in education and in increasing access to technological knowledge and skills.

The NDP proposes that the country should double its number of first-rate scientists by 2030, and the DST has a number of programmes that should help South Africa to achieve this. In conjunction with the Department of Higher Education and Training, the DST is a key source of research funding for universities. The Department's funding of research and innovation infrastructure as such is a vital source of financial support for public research institutions and universities for research equipment and facilities. The DST also provides funding for infrastructure to enable research and innovation, such as the South African National Research Network, which provides high-speed broadband to higher education and research institutes.

Added to the provision of research and innovation infrastructure, the DST supports human capital development for knowledge generation. Currently several interventions are in place to address the persistent systemic challenges of access, participation and success rates across all levels of education (especially postgraduate education). These interventions include the South African Research Chairs Initiative and various bursary programmes for postgraduate degrees.

The Department stimulates technological innovation within industry and small business through the Research and Development Tax Incentive Programme, and technology assistance packages to small and medium enterprises, thus contributing to employment creation and economic growth. The DST supports industrial development opportunities in a variety of niche areas, such as global change and Earth systems science, advanced manufacturing, advanced metals and information and communication technology (ICT). In addition, South Africa continues to use multilateral and bilateral cooperation to advance and facilitate the country's participation in strategic and mutually beneficial partnerships in science, technology and innovation at regional, continental and global level.

Some key priorities in 2014/15

Over the medium term there will be a focus on developing human capital, creating new knowledge, investing in research, developing infrastructure, and encouraging innovation in the country by funding marketable products emerging from research and incubation. This will be done primarily through the funds allocated to the Programme: Research Development and Support.

To improve South Africa's global competitiveness, the DST will make transfer payments to the Council for Scientific and Industrial Research (CSIR) and the National Research Foundation (NRF) to fund 11 440 bursaries for postgraduate research students in 2014/15, and close to 30 000 over the next two financial years.

The DST will also make transfers to fund the MeerKAT, precursor to the Square Kilometre Array radio telescope. The MeerKAT, which will eventually have 64 antennae, should increase from four dishes in 2014/15 to 27 in 2015/16 and 31 in 2016/17.

R1,4 billion has been allocated over the medium term from the Economic Competitiveness and Support Package for industrial partnerships, research into satellite development, titanium technology and nanotechnology, and for the internship programme.

Research Development and Support receives an allocation of R3 503,8 billion. Among other things, the Programme aims to • contribute to the development of demographically representative, high-level human capital by increasing the number of postgraduate research students awarded bursaries through the NRF from 3 876 in 2014/15 to 4 539 in 2015/16 and 2016/17; • ensure that South Africans have access to internationally comparable research and innovation infrastructure, increasing availability of bandwidth from 2 800 Mbps in 2014/15 to 3 500 Mbps in 2015/16 and 2016/17; • promote research productivity by increasing the number of research grants awarded through the NRF from 3 876 in 2014/15 to 4 539 in 2015/16 and 2016/17; • increasing the number of Institute for Scientific Information-accredited research articles published by NRF-funded researchers from 5 700 in 2014/15 to 7 000 in 2015/16 and 2016/17; • develop priority science areas in which South Africa enjoys a competitive advantage (e.g. astronomy); and • promote public awareness of and engagement with science, technology, engineering and innovation.

Socio-economic Innovation Partnerships receives R1 564,1 billion and will spend it on • using science and technology to transform and enhance rural and socio-economic development, and inform government planning and service delivery; and • sustaining niche high-potential research and development capabilities that improve the competitiveness of economic sectors and facilitate the development of targeted industries with growth potential in aerospace, advanced manufacturing, chemicals, mining, advanced metals and ICT. The programme to develop the titanium metal powder industry and the Aeroswift additive manufacturing project are examples. It will do this by, among other things, increasing the value of the postgraduate bursaries it awards through the CSIR, and providing funding to support increased localisation and competitiveness in industry.

Technology Innovation receives an allocation of close to R1 billion to spend on • leading, informing and influencing policy development in strategic focus areas; • coordinating and supporting research and skills development in space science, renewable energy and the bioeconomy; and • promoting the development, commercialisation and legal protection of scientific research and development outputs, processes and services. Some of these objectives are carried out through the Technology Innovation Agency and the National Intellectual Property Management Office.

Financial year Budget (R billion) 2013/14 6 198,2 2014/15 6 470,2 2015/16 7 554,3 2016/17 7 634,8

Expenditure financing

Funding is allocated to the DST by National Treasury as part of the Medium Term Expenditure Framework (MTEF). For the 2014/15 financial year, the DST received R6 470,2 billion.

As spending has been slower than expected, the Department will reduce expenditure on transfers and subsidies to the Technology Innovation Agency, the CSIR, and partnerships with domestic and foreign companies in the fields of ICT, nanotechnology and green industries.

The table below shows the DST's allocation of resources over the 2013/14-2016/17 MTEF period.

The Department also receives official development assistance from other countries through various funding instruments.

Functional classification of expenditure

The DST's total budget for the 2014/15 financial year is R6 470,2 billion. The chart below shows how this is divided between the Department's five main Programmes, which represent various core focus areas.

AdministrationR291 million

ResearchDevelopment and

Support R3 503,8 billion

International Cooperation and ResourcesR119,7 million

Technology Innovation R991,6 million

Socio-economic Innovation

Partnerships R1 564,1 billion

Expenditure

Administration receives R291 million to conduct the overall management of the Department and to ensure that organisations funded by the DST comply with the standards of good corporate governance and align their activities with the strategic focus of the National System of Innovation.

International Cooperation and Resources receives an allocation of R119,7 million to use for • increasing the flow of international resources into the country for science, technology and innovation-based socio-economic development; • increasing the exposure of South African researchers and students to global knowledge and science, technology and innovation networks; • contributing to the global science, technology and innovation discourse and policy through regional, continental and global initiatives; • supporting capacity development in Africa to develop the continent's knowledge-based economy; and • increasing the participation of South Africans in international human capital development opportunities.

Entities reporting to the Minister of Science and Technology

Parliamentary grants

In addition to the parliamentary grants, the DST entities implement departmental projects through project funding.

The following DST entities receive funding to the value of R3 507 630 billion through transfers:

The National Research Foundation supports and promotes research through the funding of human resource development and the provision of facilities to enable the creation of knowledge, innovation and development in all fields of science and technology, including indigenous knowledge systems.

The Council for Scientific and Industrial Research fosters industrial and scientific development, particularly through multidisciplinary research and technological development, either by itself or in cooperation with public and private sector institutions.

The Human Sciences Research Council undertakes, promotes and coordinates policy-relevant, problem-oriented research in the human and social sciences, including research projects for public sector users, non-governmental organisations and international development agencies in partnership with researchers all over the world, but particularly in Africa.

The Technology Innovation Agency stimulates and intensifies technological innovation in order to improve economic growth and the quality of life of all South Africans. The agency is key in ensuring the translation of the research and development outcomes of higher education institutions, science councils and public entities into commercial technology products and services, thus intensifying the impact of innovation on the economy and society.

The Academy of Science of South Africa carries out its mandate of promoting common ground across all disciplines; promoting innovative and independent scientific thinking; promoting the optimum development of the intellectual capacity of all people; and providing effective advice and facilitating appropriate action in relation to the collective needs, opportunities and challenges of all South Africans.

The South African National Space Agency promotes the use of space and cooperation in space-related activities, while fostering research in space science, advancing scientific engineering through developing human capital and providing support to industrial development in space technologies.

Department of Science and Technology

Building 53, Meiring Naudé Road, Scientia Campus, South Gate Entrance, Brummeria, Pretoria, South Africa

Private Bag X894, Pretoria, 0001

Tel: +27 (0)12 843 6300Fax: +27 (0)12 349 1030Website: www.dst.gov.za

ASSAf21 577 000

NRF851 186 000

SANSA118 298 000

TIA380 717 000

CSIR825 740 000

2014/15 allocation in R

HSRC276 010 000

Science, Technology and Innovation Summit

In 2014 the DST will host the second Science, Technology and Innovation Summit, which is intended to enhance engagement between government, academia, business and civil society with the aim of developing a more focused and competitive National System of Innovation for South Africa.

BUDGET VOTE DEBATE 2014

SCIENCE & TECHNOLOGY

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Department of Science and Technology Budget Guide for the 2014/15 Financial Year

Strategic overview of the Department

The advances in science and technology have proved to be crucial for socio-economic growth and improvements to health and education systems, infrastructure and general productivity.

The Department of Science and Technology (DST) executes its mandate through the implementation of the 1996 White Paper on Science and Technology, the National Research and Development Strategy and the Ten-Year Innovation Plan. The DST continues to align its strategies and plans with the priorities of the National Development Plan (NDP), which considers science, technology and innovation to be key drivers of the South African development agenda. In order to realise the potential of science and technology as an engine of growth, investment needs to be made in education and in increasing access to technological knowledge and skills.

The NDP proposes that the country should double its number of first-rate scientists by 2030, and the DST has a number of programmes that should help South Africa to achieve this. In conjunction with the Department of Higher Education and Training, the DST is a key source of research funding for universities. The Department's funding of research and innovation infrastructure as such is a vital source of financial support for public research institutions and universities for research equipment and facilities. The DST also provides funding for infrastructure to enable research and innovation, such as the South African National Research Network, which provides high-speed broadband to higher education and research institutes.

Added to the provision of research and innovation infrastructure, the DST supports human capital development for knowledge generation. Currently several interventions are in place to address the persistent systemic challenges of access, participation and success rates across all levels of education (especially postgraduate education). These interventions include the South African Research Chairs Initiative and various bursary programmes for postgraduate degrees.

The Department stimulates technological innovation within industry and small business through the Research and Development Tax Incentive Programme, and technology assistance packages to small and medium enterprises, thus contributing to employment creation and economic growth. The DST supports industrial development opportunities in a variety of niche areas, such as global change and Earth systems science, advanced manufacturing, advanced metals and information and communication technology (ICT). In addition, South Africa continues to use multilateral and bilateral cooperation to advance and facilitate the country's participation in strategic and mutually beneficial partnerships in science, technology and innovation at regional, continental and global level.

Some key priorities in 2014/15

Over the medium term there will be a focus on developing human capital, creating new knowledge, investing in research, developing infrastructure, and encouraging innovation in the country by funding marketable products emerging from research and incubation. This will be done primarily through the funds allocated to the Programme: Research Development and Support.

To improve South Africa's global competitiveness, the DST will make transfer payments to the Council for Scientific and Industrial Research (CSIR) and the National Research Foundation (NRF) to fund 11 440 bursaries for postgraduate research students in 2014/15, and close to 30 000 over the next two financial years.

The DST will also make transfers to fund the MeerKAT, precursor to the Square Kilometre Array radio telescope. The MeerKAT, which will eventually have 64 antennae, should increase from four dishes in 2014/15 to 27 in 2015/16 and 31 in 2016/17.

R1,4 billion has been allocated over the medium term from the Economic Competitiveness and Support Package for industrial partnerships, research into satellite development, titanium technology and nanotechnology, and for the internship programme.

Research Development and Support receives an allocation of R3 503,8 billion. Among other things, the Programme aims to • contribute to the development of demographically representative, high-level human capital by increasing the number of postgraduate research students awarded bursaries through the NRF from 3 876 in 2014/15 to 4 539 in 2015/16 and 2016/17; • ensure that South Africans have access to internationally comparable research and innovation infrastructure, increasing availability of bandwidth from 2 800 Mbps in 2014/15 to 3 500 Mbps in 2015/16 and 2016/17; • promote research productivity by increasing the number of research grants awarded through the NRF from 3 876 in 2014/15 to 4 539 in 2015/16 and 2016/17; • increasing the number of Institute for Scientific Information-accredited research articles published by NRF-funded researchers from 5 700 in 2014/15 to 7 000 in 2015/16 and 2016/17; • develop priority science areas in which South Africa enjoys a competitive advantage (e.g. astronomy); and • promote public awareness of and engagement with science, technology, engineering and innovation.

Socio-economic Innovation Partnerships receives R1 564,1 billion and will spend it on • using science and technology to transform and enhance rural and socio-economic development, and inform government planning and service delivery; and • sustaining niche high-potential research and development capabilities that improve the competitiveness of economic sectors and facilitate the development of targeted industries with growth potential in aerospace, advanced manufacturing, chemicals, mining, advanced metals and ICT. The programme to develop the titanium metal powder industry and the Aeroswift additive manufacturing project are examples. It will do this by, among other things, increasing the value of the postgraduate bursaries it awards through the CSIR, and providing funding to support increased localisation and competitiveness in industry.

Technology Innovation receives an allocation of close to R1 billion to spend on • leading, informing and influencing policy development in strategic focus areas; • coordinating and supporting research and skills development in space science, renewable energy and the bioeconomy; and • promoting the development, commercialisation and legal protection of scientific research and development outputs, processes and services. Some of these objectives are carried out through the Technology Innovation Agency and the National Intellectual Property Management Office.

Financial year Budget (R billion) 2013/14 6 198,2 2014/15 6 470,2 2015/16 7 554,3 2016/17 7 634,8

Expenditure financing

Funding is allocated to the DST by National Treasury as part of the Medium Term Expenditure Framework (MTEF). For the 2014/15 financial year, the DST received R6 470,2 billion.

As spending has been slower than expected, the Department will reduce expenditure on transfers and subsidies to the Technology Innovation Agency, the CSIR, and partnerships with domestic and foreign companies in the fields of ICT, nanotechnology and green industries.

The table below shows the DST's allocation of resources over the 2013/14-2016/17 MTEF period.

The Department also receives official development assistance from other countries through various funding instruments.

Functional classification of expenditure

The DST's total budget for the 2014/15 financial year is R6 470,2 billion. The chart below shows how this is divided between the Department's five main Programmes, which represent various core focus areas.

AdministrationR291 million

ResearchDevelopment and

Support R3 503,8 billion

International Cooperation and ResourcesR119,7 million

Technology Innovation R991,6 million

Socio-economic Innovation

Partnerships R1 564,1 billion

Expenditure

Department of Science and Technology Budget Guide for the 2014/15 Financial Year

Strategic overview of the Department

The advances in science and technology have proved to be crucial for socio-economic growth and improvements to health and education systems, infrastructure and general productivity.

The Department of Science and Technology (DST) executes its mandate through the implementation of the 1996 White Paper on Science and Technology, the National Research and Development Strategy and the Ten-Year Innovation Plan. The DST continues to align its strategies and plans with the priorities of the National Development Plan (NDP), which considers science, technology and innovation to be key drivers of the South African development agenda. In order to realise the potential of science and technology as an engine of growth, investment needs to be made in education and in increasing access to technological knowledge and skills.

The NDP proposes that the country should double its number of first-rate scientists by 2030, and the DST has a number of programmes that should help South Africa to achieve this. In conjunction with the Department of Higher Education and Training, the DST is a key source of research funding for universities. The Department's funding of research and innovation infrastructure as such is a vital source of financial support for public research institutions and universities for research equipment and facilities. The DST also provides funding for infrastructure to enable research and innovation, such as the South African National Research Network, which provides high-speed broadband to higher education and research institutes.

Added to the provision of research and innovation infrastructure, the DST supports human capital development for knowledge generation. Currently several interventions are in place to address the persistent systemic challenges of access, participation and success rates across all levels of education (especially postgraduate education). These interventions include the South African Research Chairs Initiative and various bursary programmes for postgraduate degrees.

The Department stimulates technological innovation within industry and small business through the Research and Development Tax Incentive Programme, and technology assistance packages to small and medium enterprises, thus contributing to employment creation and economic growth. The DST supports industrial development opportunities in a variety of niche areas, such as global change and Earth systems science, advanced manufacturing, advanced metals and information and communication technology (ICT). In addition, South Africa continues to use multilateral and bilateral cooperation to advance and facilitate the country's participation in strategic and mutually beneficial partnerships in science, technology and innovation at regional, continental and global level.

Some key priorities in 2014/15

Over the medium term there will be a focus on developing human capital, creating new knowledge, investing in research, developing infrastructure, and encouraging innovation in the country by funding marketable products emerging from research and incubation. This will be done primarily through the funds allocated to the Programme: Research Development and Support.

To improve South Africa's global competitiveness, the DST will make transfer payments to the Council for Scientific and Industrial Research (CSIR) and the National Research Foundation (NRF) to fund 11 440 bursaries for postgraduate research students in 2014/15, and close to 30 000 over the next two financial years.

The DST will also make transfers to fund the MeerKAT, precursor to the Square Kilometre Array radio telescope. The MeerKAT, which will eventually have 64 antennae, should increase from four dishes in 2014/15 to 27 in 2015/16 and 31 in 2016/17.

R1,4 billion has been allocated over the medium term from the Economic Competitiveness and Support Package for industrial partnerships, research into satellite development, titanium technology and nanotechnology, and for the internship programme.

Research Development and Support receives an allocation of R3 503,8 billion. Among other things, the Programme aims to • contribute to the development of demographically representative, high-level human capital by increasing the number of postgraduate research students awarded bursaries through the NRF from 3 876 in 2014/15 to 4 539 in 2015/16 and 2016/17; • ensure that South Africans have access to internationally comparable research and innovation infrastructure, increasing availability of bandwidth from 2 800 Mbps in 2014/15 to 3 500 Mbps in 2015/16 and 2016/17; • promote research productivity by increasing the number of research grants awarded through the NRF from 3 876 in 2014/15 to 4 539 in 2015/16 and 2016/17; • increasing the number of Institute for Scientific Information-accredited research articles published by NRF-funded researchers from 5 700 in 2014/15 to 7 000 in 2015/16 and 2016/17; • develop priority science areas in which South Africa enjoys a competitive advantage (e.g. astronomy); and • promote public awareness of and engagement with science, technology, engineering and innovation.

Socio-economic Innovation Partnerships receives R1 564,1 billion and will spend it on • using science and technology to transform and enhance rural and socio-economic development, and inform government planning and service delivery; and • sustaining niche high-potential research and development capabilities that improve the competitiveness of economic sectors and facilitate the development of targeted industries with growth potential in aerospace, advanced manufacturing, chemicals, mining, advanced metals and ICT. The programme to develop the titanium metal powder industry and the Aeroswift additive manufacturing project are examples. It will do this by, among other things, increasing the value of the postgraduate bursaries it awards through the CSIR, and providing funding to support increased localisation and competitiveness in industry.

Technology Innovation receives an allocation of close to R1 billion to spend on • leading, informing and influencing policy development in strategic focus areas; • coordinating and supporting research and skills development in space science, renewable energy and the bioeconomy; and • promoting the development, commercialisation and legal protection of scientific research and development outputs, processes and services. Some of these objectives are carried out through the Technology Innovation Agency and the National Intellectual Property Management Office.

Financial year Budget (R billion) 2013/14 6 198,2 2014/15 6 470,2 2015/16 7 554,3 2016/17 7 634,8

Expenditure financing

Funding is allocated to the DST by National Treasury as part of the Medium Term Expenditure Framework (MTEF). For the 2014/15 financial year, the DST received R6 470,2 billion.

As spending has been slower than expected, the Department will reduce expenditure on transfers and subsidies to the Technology Innovation Agency, the CSIR, and partnerships with domestic and foreign companies in the fields of ICT, nanotechnology and green industries.

The table below shows the DST's allocation of resources over the 2013/14-2016/17 MTEF period.

The Department also receives official development assistance from other countries through various funding instruments.

Functional classification of expenditure

The DST's total budget for the 2014/15 financial year is R6 470,2 billion. The chart below shows how this is divided between the Department's five main Programmes, which represent various core focus areas.

AdministrationR291 million

ResearchDevelopment and

Support R3 503,8 billion

International Cooperation and ResourcesR119,7 million

Technology Innovation R991,6 million

Socio-economic Innovation

Partnerships R1 564,1 billion

Expenditure

Department of Science and Technology Budget Guide for the 2014/15 Financial Year

Strategic overview of the Department

The advances in science and technology have proved to be crucial for socio-economic growth and improvements to health and education systems, infrastructure and general productivity.

The Department of Science and Technology (DST) executes its mandate through the implementation of the 1996 White Paper on Science and Technology, the National Research and Development Strategy and the Ten-Year Innovation Plan. The DST continues to align its strategies and plans with the priorities of the National Development Plan (NDP), which considers science, technology and innovation to be key drivers of the South African development agenda. In order to realise the potential of science and technology as an engine of growth, investment needs to be made in education and in increasing access to technological knowledge and skills.

The NDP proposes that the country should double its number of first-rate scientists by 2030, and the DST has a number of programmes that should help South Africa to achieve this. In conjunction with the Department of Higher Education and Training, the DST is a key source of research funding for universities. The Department's funding of research and innovation infrastructure as such is a vital source of financial support for public research institutions and universities for research equipment and facilities. The DST also provides funding for infrastructure to enable research and innovation, such as the South African National Research Network, which provides high-speed broadband to higher education and research institutes.

Added to the provision of research and innovation infrastructure, the DST supports human capital development for knowledge generation. Currently several interventions are in place to address the persistent systemic challenges of access, participation and success rates across all levels of education (especially postgraduate education). These interventions include the South African Research Chairs Initiative and various bursary programmes for postgraduate degrees.

The Department stimulates technological innovation within industry and small business through the Research and Development Tax Incentive Programme, and technology assistance packages to small and medium enterprises, thus contributing to employment creation and economic growth. The DST supports industrial development opportunities in a variety of niche areas, such as global change and Earth systems science, advanced manufacturing, advanced metals and information and communication technology (ICT). In addition, South Africa continues to use multilateral and bilateral cooperation to advance and facilitate the country's participation in strategic and mutually beneficial partnerships in science, technology and innovation at regional, continental and global level.

Some key priorities in 2014/15

Over the medium term there will be a focus on developing human capital, creating new knowledge, investing in research, developing infrastructure, and encouraging innovation in the country by funding marketable products emerging from research and incubation. This will be done primarily through the funds allocated to the Programme: Research Development and Support.

To improve South Africa's global competitiveness, the DST will make transfer payments to the Council for Scientific and Industrial Research (CSIR) and the National Research Foundation (NRF) to fund 11 440 bursaries for postgraduate research students in 2014/15, and close to 30 000 over the next two financial years.

The DST will also make transfers to fund the MeerKAT, precursor to the Square Kilometre Array radio telescope. The MeerKAT, which will eventually have 64 antennae, should increase from four dishes in 2014/15 to 27 in 2015/16 and 31 in 2016/17.

R1,4 billion has been allocated over the medium term from the Economic Competitiveness and Support Package for industrial partnerships, research into satellite development, titanium technology and nanotechnology, and for the internship programme.

Research Development and Support receives an allocation of R3 503,8 billion. Among other things, the Programme aims to • contribute to the development of demographically representative, high-level human capital by increasing the number of postgraduate research students awarded bursaries through the NRF from 3 876 in 2014/15 to 4 539 in 2015/16 and 2016/17; • ensure that South Africans have access to internationally comparable research and innovation infrastructure, increasing availability of bandwidth from 2 800 Mbps in 2014/15 to 3 500 Mbps in 2015/16 and 2016/17; • promote research productivity by increasing the number of research grants awarded through the NRF from 3 876 in 2014/15 to 4 539 in 2015/16 and 2016/17; • increasing the number of Institute for Scientific Information-accredited research articles published by NRF-funded researchers from 5 700 in 2014/15 to 7 000 in 2015/16 and 2016/17; • develop priority science areas in which South Africa enjoys a competitive advantage (e.g. astronomy); and • promote public awareness of and engagement with science, technology, engineering and innovation.

Socio-economic Innovation Partnerships receives R1 564,1 billion and will spend it on • using science and technology to transform and enhance rural and socio-economic development, and inform government planning and service delivery; and • sustaining niche high-potential research and development capabilities that improve the competitiveness of economic sectors and facilitate the development of targeted industries with growth potential in aerospace, advanced manufacturing, chemicals, mining, advanced metals and ICT. The programme to develop the titanium metal powder industry and the Aeroswift additive manufacturing project are examples. It will do this by, among other things, increasing the value of the postgraduate bursaries it awards through the CSIR, and providing funding to support increased localisation and competitiveness in industry.

Technology Innovation receives an allocation of close to R1 billion to spend on • leading, informing and influencing policy development in strategic focus areas; • coordinating and supporting research and skills development in space science, renewable energy and the bioeconomy; and • promoting the development, commercialisation and legal protection of scientific research and development outputs, processes and services. Some of these objectives are carried out through the Technology Innovation Agency and the National Intellectual Property Management Office.

Financial year Budget (R billion) 2013/14 6 198,2 2014/15 6 470,2 2015/16 7 554,3 2016/17 7 634,8

Expenditure financing

Funding is allocated to the DST by National Treasury as part of the Medium Term Expenditure Framework (MTEF). For the 2014/15 financial year, the DST received R6 470,2 billion.

As spending has been slower than expected, the Department will reduce expenditure on transfers and subsidies to the Technology Innovation Agency, the CSIR, and partnerships with domestic and foreign companies in the fields of ICT, nanotechnology and green industries.

The table below shows the DST's allocation of resources over the 2013/14-2016/17 MTEF period.

The Department also receives official development assistance from other countries through various funding instruments.

Functional classification of expenditure

The DST's total budget for the 2014/15 financial year is R6 470,2 billion. The chart below shows how this is divided between the Department's five main Programmes, which represent various core focus areas.

AdministrationR291 million

ResearchDevelopment and

Support R3 503,8 billion

International Cooperation and ResourcesR119,7 million

Technology Innovation R991,6 million

Socio-economic Innovation

Partnerships R1 564,1 billion

Expenditure

36

Administration receives R291 million to conduct the overall management of the Department and to ensure that organisations funded by the DST comply with the standards of good corporate governance and align their activities with the strategic focus of the National System of Innovation.

International Cooperation and Resources receives an allocation of R119,7 million to use for • increasing the flow of international resources into the country for science, technology and innovation-based socio-economic development; • increasing the exposure of South African researchers and students to global knowledge and science, technology and innovation networks; • contributing to the global science, technology and innovation discourse and policy through regional, continental and global initiatives; • supporting capacity development in Africa to develop the continent's knowledge-based economy; and • increasing the participation of South Africans in international human capital development opportunities.

Entities reporting to the Minister of Science and Technology

Parliamentary grants

In addition to the parliamentary grants, the DST entities implement departmental projects through project funding.

The following DST entities receive funding to the value of R3 507 630 billion through transfers:

The National Research Foundation supports and promotes research through the funding of human resource development and the provision of facilities to enable the creation of knowledge, innovation and development in all fields of science and technology, including indigenous knowledge systems.

The Council for Scientific and Industrial Research fosters industrial and scientific development, particularly through multidisciplinary research and technological development, either by itself or in cooperation with public and private sector institutions.

The Human Sciences Research Council undertakes, promotes and coordinates policy-relevant, problem-oriented research in the human and social sciences, including research projects for public sector users, non-governmental organisations and international development agencies in partnership with researchers all over the world, but particularly in Africa.

The Technology Innovation Agency stimulates and intensifies technological innovation in order to improve economic growth and the quality of life of all South Africans. The agency is key in ensuring the translation of the research and development outcomes of higher education institutions, science councils and public entities into commercial technology products and services, thus intensifying the impact of innovation on the economy and society.

The Academy of Science of South Africa carries out its mandate of promoting common ground across all disciplines; promoting innovative and independent scientific thinking; promoting the optimum development of the intellectual capacity of all people; and providing effective advice and facilitating appropriate action in relation to the collective needs, opportunities and challenges of all South Africans.

The South African National Space Agency promotes the use of space and cooperation in space-related activities, while fostering research in space science, advancing scientific engineering through developing human capital and providing support to industrial development in space technologies.

Department of Science and Technology

Building 53, Meiring Naudé Road, Scientia Campus, South Gate Entrance, Brummeria, Pretoria, South Africa

Private Bag X894, Pretoria, 0001

Tel: +27 (0)12 843 6300Fax: +27 (0)12 349 1030Website: www.dst.gov.za

ASSAf21 577 000

NRF851 186 000

SANSA118 298 000

TIA380 717 000

CSIR825 740 000

2014/15 allocation in R

HSRC276 010 000

Science, Technology and Innovation Summit

In 2014 the DST will host the second Science, Technology and Innovation Summit, which is intended to enhance engagement between government, academia, business and civil society with the aim of developing a more focused and competitive National System of Innovation for South Africa.

BUDGET VOTE DEBATE 2014

Department of Science and Technology Budget Guide for the 2014/15 Financial Year

Strategic overview of the Department

The advances in science and technology have proved to be crucial for socio-economic growth and improvements to health and education systems, infrastructure and general productivity.

The Department of Science and Technology (DST) executes its mandate through the implementation of the 1996 White Paper on Science and Technology, the National Research and Development Strategy and the Ten-Year Innovation Plan. The DST continues to align its strategies and plans with the priorities of the National Development Plan (NDP), which considers science, technology and innovation to be key drivers of the South African development agenda. In order to realise the potential of science and technology as an engine of growth, investment needs to be made in education and in increasing access to technological knowledge and skills.

The NDP proposes that the country should double its number of first-rate scientists by 2030, and the DST has a number of programmes that should help South Africa to achieve this. In conjunction with the Department of Higher Education and Training, the DST is a key source of research funding for universities. The Department's funding of research and innovation infrastructure as such is a vital source of financial support for public research institutions and universities for research equipment and facilities. The DST also provides funding for infrastructure to enable research and innovation, such as the South African National Research Network, which provides high-speed broadband to higher education and research institutes.

Added to the provision of research and innovation infrastructure, the DST supports human capital development for knowledge generation. Currently several interventions are in place to address the persistent systemic challenges of access, participation and success rates across all levels of education (especially postgraduate education). These interventions include the South African Research Chairs Initiative and various bursary programmes for postgraduate degrees.

The Department stimulates technological innovation within industry and small business through the Research and Development Tax Incentive Programme, and technology assistance packages to small and medium enterprises, thus contributing to employment creation and economic growth. The DST supports industrial development opportunities in a variety of niche areas, such as global change and Earth systems science, advanced manufacturing, advanced metals and information and communication technology (ICT). In addition, South Africa continues to use multilateral and bilateral cooperation to advance and facilitate the country's participation in strategic and mutually beneficial partnerships in science, technology and innovation at regional, continental and global level.

Some key priorities in 2014/15

Over the medium term there will be a focus on developing human capital, creating new knowledge, investing in research, developing infrastructure, and encouraging innovation in the country by funding marketable products emerging from research and incubation. This will be done primarily through the funds allocated to the Programme: Research Development and Support.

To improve South Africa's global competitiveness, the DST will make transfer payments to the Council for Scientific and Industrial Research (CSIR) and the National Research Foundation (NRF) to fund 11 440 bursaries for postgraduate research students in 2014/15, and close to 30 000 over the next two financial years.

The DST will also make transfers to fund the MeerKAT, precursor to the Square Kilometre Array radio telescope. The MeerKAT, which will eventually have 64 antennae, should increase from four dishes in 2014/15 to 27 in 2015/16 and 31 in 2016/17.

R1,4 billion has been allocated over the medium term from the Economic Competitiveness and Support Package for industrial partnerships, research into satellite development, titanium technology and nanotechnology, and for the internship programme.

Research Development and Support receives an allocation of R3 503,8 billion. Among other things, the Programme aims to • contribute to the development of demographically representative, high-level human capital by increasing the number of postgraduate research students awarded bursaries through the NRF from 3 876 in 2014/15 to 4 539 in 2015/16 and 2016/17; • ensure that South Africans have access to internationally comparable research and innovation infrastructure, increasing availability of bandwidth from 2 800 Mbps in 2014/15 to 3 500 Mbps in 2015/16 and 2016/17; • promote research productivity by increasing the number of research grants awarded through the NRF from 3 876 in 2014/15 to 4 539 in 2015/16 and 2016/17; • increasing the number of Institute for Scientific Information-accredited research articles published by NRF-funded researchers from 5 700 in 2014/15 to 7 000 in 2015/16 and 2016/17; • develop priority science areas in which South Africa enjoys a competitive advantage (e.g. astronomy); and • promote public awareness of and engagement with science, technology, engineering and innovation.

Socio-economic Innovation Partnerships receives R1 564,1 billion and will spend it on • using science and technology to transform and enhance rural and socio-economic development, and inform government planning and service delivery; and • sustaining niche high-potential research and development capabilities that improve the competitiveness of economic sectors and facilitate the development of targeted industries with growth potential in aerospace, advanced manufacturing, chemicals, mining, advanced metals and ICT. The programme to develop the titanium metal powder industry and the Aeroswift additive manufacturing project are examples. It will do this by, among other things, increasing the value of the postgraduate bursaries it awards through the CSIR, and providing funding to support increased localisation and competitiveness in industry.

Technology Innovation receives an allocation of close to R1 billion to spend on • leading, informing and influencing policy development in strategic focus areas; • coordinating and supporting research and skills development in space science, renewable energy and the bioeconomy; and • promoting the development, commercialisation and legal protection of scientific research and development outputs, processes and services. Some of these objectives are carried out through the Technology Innovation Agency and the National Intellectual Property Management Office.

Financial year Budget (R billion) 2013/14 6 198,2 2014/15 6 470,2 2015/16 7 554,3 2016/17 7 634,8

Expenditure financing

Funding is allocated to the DST by National Treasury as part of the Medium Term Expenditure Framework (MTEF). For the 2014/15 financial year, the DST received R6 470,2 billion.

As spending has been slower than expected, the Department will reduce expenditure on transfers and subsidies to the Technology Innovation Agency, the CSIR, and partnerships with domestic and foreign companies in the fields of ICT, nanotechnology and green industries.

The table below shows the DST's allocation of resources over the 2013/14-2016/17 MTEF period.

The Department also receives official development assistance from other countries through various funding instruments.

Functional classification of expenditure

The DST's total budget for the 2014/15 financial year is R6 470,2 billion. The chart below shows how this is divided between the Department's five main Programmes, which represent various core focus areas.

AdministrationR291 million

ResearchDevelopment and

Support R3 503,8 billion

International Cooperation and ResourcesR119,7 million

Technology Innovation R991,6 million

Socio-economic Innovation

Partnerships R1 564,1 billion

Expenditure

SCIENCE & TECHNOLOGY

Administration receives R291 million to conduct the overall management of the Department and to ensure that organisations funded by the DST comply with the standards of good corporate governance and align their activities with the strategic focus of the National System of Innovation.

International Cooperation and Resources receives an allocation of R119,7 million to use for • increasing the flow of international resources into the country for science, technology and innovation-based socio-economic development; • increasing the exposure of South African researchers and students to global knowledge and science, technology and innovation networks; • contributing to the global science, technology and innovation discourse and policy through regional, continental and global initiatives; • supporting capacity development in Africa to develop the continent's knowledge-based economy; and • increasing the participation of South Africans in international human capital development opportunities.

Entities reporting to the Minister of Science and Technology

Parliamentary grants

In addition to the parliamentary grants, the DST entities implement departmental projects through project funding.

The following DST entities receive funding to the value of R3 507 630 billion through transfers:

The National Research Foundation supports and promotes research through the funding of human resource development and the provision of facilities to enable the creation of knowledge, innovation and development in all fields of science and technology, including indigenous knowledge systems.

The Council for Scientific and Industrial Research fosters industrial and scientific development, particularly through multidisciplinary research and technological development, either by itself or in cooperation with public and private sector institutions.

The Human Sciences Research Council undertakes, promotes and coordinates policy-relevant, problem-oriented research in the human and social sciences, including research projects for public sector users, non-governmental organisations and international development agencies in partnership with researchers all over the world, but particularly in Africa.

The Technology Innovation Agency stimulates and intensifies technological innovation in order to improve economic growth and the quality of life of all South Africans. The agency is key in ensuring the translation of the research and development outcomes of higher education institutions, science councils and public entities into commercial technology products and services, thus intensifying the impact of innovation on the economy and society.

The Academy of Science of South Africa carries out its mandate of promoting common ground across all disciplines; promoting innovative and independent scientific thinking; promoting the optimum development of the intellectual capacity of all people; and providing effective advice and facilitating appropriate action in relation to the collective needs, opportunities and challenges of all South Africans.

The South African National Space Agency promotes the use of space and cooperation in space-related activities, while fostering research in space science, advancing scientific engineering through developing human capital and providing support to industrial development in space technologies.

Department of Science and Technology

Building 53, Meiring Naudé Road, Scientia Campus, South Gate Entrance, Brummeria, Pretoria, South Africa

Private Bag X894, Pretoria, 0001

Tel: +27 (0)12 843 6300Fax: +27 (0)12 349 1030Website: www.dst.gov.za

ASSAf21 577 000

NRF851 186 000

SANSA118 298 000

TIA380 717 000

CSIR825 740 000

2014/15 allocation in R

HSRC276 010 000

Science, Technology and Innovation Summit

In 2014 the DST will host the second Science, Technology and Innovation Summit, which is intended to enhance engagement between government, academia, business and civil society with the aim of developing a more focused and competitive National System of Innovation for South Africa.

BUDGET VOTE DEBATE 2014

Spec

ial E

ditio

n in

con

junc

tion

with

TH

E DE

PART

MEN

T OF

SCI

ENCE

& T

ECHN

OLOG

Y

Administration receives R291 million to conduct the overall management of the Department and to ensure that organisations funded by the DST comply with the standards of good corporate governance and align their activities with the strategic focus of the National System of Innovation.

International Cooperation and Resources receives an allocation of R119,7 million to use for • increasing the flow of international resources into the country for science, technology and innovation-based socio-economic development; • increasing the exposure of South African researchers and students to global knowledge and science, technology and innovation networks; • contributing to the global science, technology and innovation discourse and policy through regional, continental and global initiatives; • supporting capacity development in Africa to develop the continent's knowledge-based economy; and • increasing the participation of South Africans in international human capital development opportunities.

Entities reporting to the Minister of Science and Technology

Parliamentary grants

In addition to the parliamentary grants, the DST entities implement departmental projects through project funding.

The following DST entities receive funding to the value of R3 507 630 billion through transfers:

The National Research Foundation supports and promotes research through the funding of human resource development and the provision of facilities to enable the creation of knowledge, innovation and development in all fields of science and technology, including indigenous knowledge systems.

The Council for Scientific and Industrial Research fosters industrial and scientific development, particularly through multidisciplinary research and technological development, either by itself or in cooperation with public and private sector institutions.

The Human Sciences Research Council undertakes, promotes and coordinates policy-relevant, problem-oriented research in the human and social sciences, including research projects for public sector users, non-governmental organisations and international development agencies in partnership with researchers all over the world, but particularly in Africa.

The Technology Innovation Agency stimulates and intensifies technological innovation in order to improve economic growth and the quality of life of all South Africans. The agency is key in ensuring the translation of the research and development outcomes of higher education institutions, science councils and public entities into commercial technology products and services, thus intensifying the impact of innovation on the economy and society.

The Academy of Science of South Africa carries out its mandate of promoting common ground across all disciplines; promoting innovative and independent scientific thinking; promoting the optimum development of the intellectual capacity of all people; and providing effective advice and facilitating appropriate action in relation to the collective needs, opportunities and challenges of all South Africans.

The South African National Space Agency promotes the use of space and cooperation in space-related activities, while fostering research in space science, advancing scientific engineering through developing human capital and providing support to industrial development in space technologies.

Department of Science and Technology

Building 53, Meiring Naudé Road, Scientia Campus, South Gate Entrance, Brummeria, Pretoria, South Africa

Private Bag X894, Pretoria, 0001

Tel: +27 (0)12 843 6300Fax: +27 (0)12 349 1030Website: www.dst.gov.za

ASSAf21 577 000

NRF851 186 000

SANSA118 298 000

TIA380 717 000

CSIR825 740 000

2014/15 allocation in R

HSRC276 010 000

Science, Technology and Innovation Summit

In 2014 the DST will host the second Science, Technology and Innovation Summit, which is intended to enhance engagement between government, academia, business and civil society with the aim of developing a more focused and competitive National System of Innovation for South Africa.

BUDGET VOTE DEBATE 2014

Administration receives R291 million to conduct the overall management of the Department and to ensure that organisations funded by the DST comply with the standards of good corporate governance and align their activities with the strategic focus of the National System of Innovation.

International Cooperation and Resources receives an allocation of R119,7 million to use for • increasing the flow of international resources into the country for science, technology and innovation-based socio-economic development; • increasing the exposure of South African researchers and students to global knowledge and science, technology and innovation networks; • contributing to the global science, technology and innovation discourse and policy through regional, continental and global initiatives; • supporting capacity development in Africa to develop the continent's knowledge-based economy; and • increasing the participation of South Africans in international human capital development opportunities.

Entities reporting to the Minister of Science and Technology

Parliamentary grants

In addition to the parliamentary grants, the DST entities implement departmental projects through project funding.

The following DST entities receive funding to the value of R3 507 630 billion through transfers:

The National Research Foundation supports and promotes research through the funding of human resource development and the provision of facilities to enable the creation of knowledge, innovation and development in all fields of science and technology, including indigenous knowledge systems.

The Council for Scientific and Industrial Research fosters industrial and scientific development, particularly through multidisciplinary research and technological development, either by itself or in cooperation with public and private sector institutions.

The Human Sciences Research Council undertakes, promotes and coordinates policy-relevant, problem-oriented research in the human and social sciences, including research projects for public sector users, non-governmental organisations and international development agencies in partnership with researchers all over the world, but particularly in Africa.

The Technology Innovation Agency stimulates and intensifies technological innovation in order to improve economic growth and the quality of life of all South Africans. The agency is key in ensuring the translation of the research and development outcomes of higher education institutions, science councils and public entities into commercial technology products and services, thus intensifying the impact of innovation on the economy and society.

The Academy of Science of South Africa carries out its mandate of promoting common ground across all disciplines; promoting innovative and independent scientific thinking; promoting the optimum development of the intellectual capacity of all people; and providing effective advice and facilitating appropriate action in relation to the collective needs, opportunities and challenges of all South Africans.

The South African National Space Agency promotes the use of space and cooperation in space-related activities, while fostering research in space science, advancing scientific engineering through developing human capital and providing support to industrial development in space technologies.

Department of Science and Technology

Building 53, Meiring Naudé Road, Scientia Campus, South Gate Entrance, Brummeria, Pretoria, South Africa

Private Bag X894, Pretoria, 0001

Tel: +27 (0)12 843 6300Fax: +27 (0)12 349 1030Website: www.dst.gov.za

ASSAf21 577 000

NRF851 186 000

SANSA118 298 000

TIA380 717 000

CSIR825 740 000

2014/15 allocation in R

HSRC276 010 000

Science, Technology and Innovation Summit

In 2014 the DST will host the second Science, Technology and Innovation Summit, which is intended to enhance engagement between government, academia, business and civil society with the aim of developing a more focused and competitive National System of Innovation for South Africa.

BUDGET VOTE DEBATE 2014

Administration receives R291 million to conduct the overall management of the Department and to ensure that organisations funded by the DST comply with the standards of good corporate governance and align their activities with the strategic focus of the National System of Innovation.

International Cooperation and Resources receives an allocation of R119,7 million to use for • increasing the flow of international resources into the country for science, technology and innovation-based socio-economic development; • increasing the exposure of South African researchers and students to global knowledge and science, technology and innovation networks; • contributing to the global science, technology and innovation discourse and policy through regional, continental and global initiatives; • supporting capacity development in Africa to develop the continent's knowledge-based economy; and • increasing the participation of South Africans in international human capital development opportunities.

Entities reporting to the Minister of Science and Technology

Parliamentary grants

In addition to the parliamentary grants, the DST entities implement departmental projects through project funding.

The following DST entities receive funding to the value of R3 507 630 billion through transfers:

The National Research Foundation supports and promotes research through the funding of human resource development and the provision of facilities to enable the creation of knowledge, innovation and development in all fields of science and technology, including indigenous knowledge systems.

The Council for Scientific and Industrial Research fosters industrial and scientific development, particularly through multidisciplinary research and technological development, either by itself or in cooperation with public and private sector institutions.

The Human Sciences Research Council undertakes, promotes and coordinates policy-relevant, problem-oriented research in the human and social sciences, including research projects for public sector users, non-governmental organisations and international development agencies in partnership with researchers all over the world, but particularly in Africa.

The Technology Innovation Agency stimulates and intensifies technological innovation in order to improve economic growth and the quality of life of all South Africans. The agency is key in ensuring the translation of the research and development outcomes of higher education institutions, science councils and public entities into commercial technology products and services, thus intensifying the impact of innovation on the economy and society.

The Academy of Science of South Africa carries out its mandate of promoting common ground across all disciplines; promoting innovative and independent scientific thinking; promoting the optimum development of the intellectual capacity of all people; and providing effective advice and facilitating appropriate action in relation to the collective needs, opportunities and challenges of all South Africans.

The South African National Space Agency promotes the use of space and cooperation in space-related activities, while fostering research in space science, advancing scientific engineering through developing human capital and providing support to industrial development in space technologies.

Department of Science and Technology

Building 53, Meiring Naudé Road, Scientia Campus, South Gate Entrance, Brummeria, Pretoria, South Africa

Private Bag X894, Pretoria, 0001

Tel: +27 (0)12 843 6300Fax: +27 (0)12 349 1030Website: www.dst.gov.za

ASSAf21 577 000

NRF851 186 000

SANSA118 298 000

TIA380 717 000

CSIR825 740 000

2014/15 allocation in R

HSRC276 010 000

Science, Technology and Innovation Summit

In 2014 the DST will host the second Science, Technology and Innovation Summit, which is intended to enhance engagement between government, academia, business and civil society with the aim of developing a more focused and competitive National System of Innovation for South Africa.

BUDGET VOTE DEBATE 2014

In the sands of the ancient Phoenician civilisation, centred on the coastline of modern Lebanon, a simple cooking fi re spontaneously created the fi rst piece of glass, sparking the imagination of scientifi c greats such as Johannes Kepler, Galileo, Christiaan Huygens, and Isaac Newton hundreds of years later. The strange and curious

properties of light manipulation through glass brought a deeper vision into all life. This piece of glass was the fi rst element in a 3,000-year adventure, which has just started to reveal the face of our complex universe.

The hue of the last few centuries is full of romantic mystery, yet with a constant confl ict between rigidity and renaissance. Galileo was put under house arrest for life for his discovery that the earth rotates around the sun. A little harsh? This was not such an obvious fact back then – especially to the egotistical “authorities” of the time; under the assumption that the universe really did revolve around them.

Nevertheless, persistence kept the glass unbroken. The intrinsic urge to be curious could not be arrested. What these men such as Galileo did was great, but what history sometimes fails to remember are the momentous scientifi c discoveries made in Africa.

One of the world’s oldest astronomical tools – a circular stone structure more than a thousand years older than Stonehenge – is located in the Nabta Playa Basin in Southern Egypt. This tool accurately tracked the Summer Solstice and was used as a prehistoric calendar.

The invention of our current 365-day year was made in Africa, through astronomical observations in Egypt.

The fi rst instruments of quantitative astronomical measurement were also developed in Africa. The Egyptians began using such tools as far back as 3,100 BC. These inventions include the sundial, the water clock and the merkhet (used to track the alignment of certain stars, and thus track time).

BY MATTHEW PIPER

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These technological discoveries were all used in some of the most amazing creations in history, such as the Egyptian Pyramids, which still to this day cannot be replicated. But alas, as Professor Ivan Van Sertima has argued, “The nerve of the world has been deadened for centuries to the vibrations of African genius.”

Finally, it may just be South Africa’s turn to send a bolt of lightning down that nerve, through one of the most ambitious scienti� c projects to date – building the largest telescope in the world in our very own Karoo. South Africa became involved with the Square Kilometre Array (SKA) project in mid 2001,10 years after the international project had already been running.

In 2012 South Africa was selected as the preferred site, which will host the extensive mid-frequency dish array, and sharing the more compact low-frequency aperture array with Australia. This development is an incredible achievement for South Africa and opens up opportunities to

SKA Facts• The data collected by the SKA in a 24-hour period would take nearly two

million years to playback on an iPod.• SKA will generate enough raw data every day to � ll 15 million 64-GB iPods.• The SKA will use enough optical � bre to wrap twice around the Earth.• The SKA central computer will have the processing power of about one

hundred million PCs.• The dishes of the SKA will produce 10 times the current global Internet traf� c.• The aperture arrays will produce more than 100 times the current global

Internet traf� c.• The SKA will contain thousands of antennas with a combined collecting area

of about one square kilometre (that’s one million square metres).• The SKA will be so sensitive that it will be able to detect airport radar on a

planet 50 light years away.Learn more. Watch this video: http://youtu.be/_H0lfHHLCko

become global leaders in science and technology. “This project is giving effect to our dream that Africa must become

a global science and technology destination and that cutting-edge science will be done in Africa by African scientists,” said Naledi Pandor, the Minister of Science and Technology. “Our SKA success is also reversing the brain drain into brain gain by bringing top researchers to the continent to do cutting-edge work on African soil. This could be a game changer for Africa, bringing about a science renaissance across the continent.”

The SKA will be the largest and most sensitive radio telescope in the world (50 times more sensitive and 10,000 times faster). It will have the capacity to sense radio waves millions of light years away; essentially allowing us to look back in time, in order to better understand the origins of the universe.

The telescope is called the Square Kilometre Array because of its size. Adding up all the receivers, it will be the size of one square kilometre. This global project is being funded by over 13 countries and has a footprint across Africa. Although the SKA antenna dishes will be built in South Africa, eight other African partner countries will have outstations, namely Botswana, Ghana, Kenya, Madagascar, Mauritius, Mozambique, Namibia and Zambia.

The Karoo, and its natural dryness, was identi�ed as an ideal place to host the SKA. Radio frequencies can be absorbed through moisture or confused by electronics close by. This remote area avoids these

problems and is geographically well situated for a clear view of the universe.

Part of Phase 1 – called KAT-7 – of the SKA has already been completed. This comprises of seven dishes, which is a prototype for the MeerKAT. The MeerKAT will be 64 dishes, which is to be completed by 2017. KAT-7 has already started to �ex its muscles, showing the potential impact of the full SKA once completed.

UCT’s Dr Roger Dean, who has been doing research that resulted in the discovery of three black holes, four billion light years away – the closest trio of black holes ever discovered – is excited about being a SKA Fellow. He explains: “Further in the future the SKA will allow us to �nd and study these systems in exquisite detail, and really allow us gain a much better understanding of how black holes shape galaxies over the history of the universe."

If such phenomena can be studied in such intense detail, four billion light years away, imagine the incredible new discoveries to be made using the SKA around 2024. Other than the discoveries to be made, what is even more exciting is the opportunity for young people to be involved on the cutting-edge of technology advancement. This generation has the potential to unlock African genius, and awaken the nerve. We have come a long way from a piece of glass in Lebanon, or sundials and water clocks in Egypt, but, �nally, we have come back around to Africa.

Looking out from the re�ector dish of one of CSIRO’s new ASKAP antennas at the Murchison Radio-astronomy Observatory in Australia in October 2010.

South Africa’s new Astronomy Geographic Advantage Act protects 12.5 million hectares in the Northern Cape as a radio astronomy reserve to ensure the future of radio astronomy in the region.

“The SKA could be a game changer for Africa, bringing about a science renaissance

across the continent.” – Naledi Pandor (Minister of

Science and Technology)

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An artist's rendition of a pulsar, a celestial object in outer space. Scientists believe it to be a rapidly rotating neutron star, that emits regular pulses of radio waves and other electromagnetic radiation at rates of up to one thousand pulses per second.

This artist’s rendition of the SKA-MID dishes in Africa shows how they may eventually look when completed. The 15-metre wide dish telescopes will provide the SKA with some of its highest resolution imaging capability, working towards the upper range of radio frequencies which the SKA will cover.

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The Money Tree (TMT): Many young people still don’t fully know what you’re doing at the moment – so tell us, where are you now, and where is Gareth Cliff going?Gareth Cliff (GC): Well let me place the ball �rmly in your court again – then they’re not paying any f*@#ing attention! This has been a very well publicised and obvious move. Where do you go for movies? The Internet. And music? The Internet. So why wouldn’t you do the same for radio? For live content, for real info, for relevant stuff that matters – whether it’s news, stuff that’s happening in our lives, stuff that makes you laugh – it seemed absolutely obvious that the habit we had to break was that people get into the car and turn on the radio. People should get into the car and plug in their phone! It’s as easy as that.

This is the way of the future, and will not even be a discussion two years from now; it will be commonplace. But for now our biggest challenge is to educate people. If you say people don’t know what I am doing, then they are choosing suffering. Why would you choose to listen to boring, traditional radio where, in one hour, in between news, traf�c, weather and sport, you may get 10 minutes of real content? What I am offering is hours of solid content. Stuff that will make you think, that will make you laugh, that will make you cry, that will make you feel inspired. That is what we are here to do. That is why the move, that is why you have to listen, that is what I am doing.TMT: Where did your passion for radio come from?GC: It comes from the same place that a lot of people’s drive to

succeed comes from, or in the case of academics who are just curious about the world… I am interested in where I am and what is going on around me. I think that a starting point for many people is one’s own context. Being alive is an interactive thing, not an observer thing. So you need to be interested in politics, geography, science, history, business – you need to be involved in all of these things, and you need to interrogate them to �nd out �rst about yourself, secondly about other people, and thirdly to position yourself among those people in order to make the most of yourself while you are here. So it all comes from a very sensible place – I am not very romantic about it. It’s just about being connected to the world. TMT: Coming from a background where business was not your primary concern, how are you coping in this new environment?GC: Again it comes down to context. I am doing this now because I believe that I need a challenge, and I am doing it because I think the audience deserves something new and something better. It seemed like there was a whole audience out there who were hungry for something edgier, a little more creative, a little more content-rich, and more exciting. So if it wasn’t me, it would have been someone else taking this next step. The timing is good, and people want this. I am just happy it is an opportunity that I can take.TMT: With any new venture, there are many failures and stumbling blocks along the way. Tell us more about what happened with Comedy Central and how you bounced back from any other failures in the past?

GARETH CLIFFNEW FRONTIERS IN RADIO

Innovation and technology are two of the most important things businesses need to consider in competitive markets. Without change and excitement, the most fundamental stakeholder

in any business – the consumer – moves their interest, and their money, elsewhere. The Money Tree recently met with Gareth Cliff, a man shaking up the radio industry, which has been

using the same device to create business for decades. Having left 5fm in March this year, Cliff has now gone down the bold path of creating something of his own – CliffCentral.

There are people out there now, sitting in their houses, or bedrooms, with phones, recording themselves, who could be the

best broadcasters of tomorrow.

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INTERVIEWED BY MATTHEW PIPER

I am doing this now because I believe that I need a

challenge, and I am doing it because I think the audience deserves something new and

something better.

GC: First of all, that was not a failure; that was a relief! It was our idea to bring Comedy Central into this in the � rst place. It was an idea that we knew had a limited time period. We only signed for three months, and then a month ago, in this very of� ce, we told them to can it. TV was never a part of our business model, it was an add-on; it was an experiment. This was just a way to show the audience what was going on, almost as a sweetener to get them to listen to Internet radio. It is all about breaking habits, as I said earlier. Within two years or more, it will be a habit that people use their phones for radio, the way they do for TV and music. TMT: As this is the science and technology edition of The Money Tree, tell us more about the technology and innovation you are engaging with.GC: The devices may change, and we are always updating those devices, but the common thing is that the new devices will always need to go where we go. Cell phones have become people’s best friend and the way that people interact with each other, the way they consume content. For us, this is the delivery platform, and for the foreseeable future there will be no replacement for this, until the device is literally inside us. For now, this is the one piece of equipment that we need to be on. So, however the device may evolve in the future, what we know now is that we must deliver good content, whether it’s funny, inspiring or entertaining. TMT: In this venture now, and in general, do you draw inspiration from anyone else?GC: In terms of really solid journalistic content, I have drawn a lot of inspiration from Arianna Huf� ngton from the Huf� ngton Post. She is a very smart woman. She is very erudite and eloquent and has a really sharp mind. She started out writing blogs, and then used some of her ex-husband’s divorce money to launch the Huf� ngton Post, which has turned into a multi-million-dollar business – it is now considered to be one of the most in� uential publications in America, especially around politics. I think that is quite something.

There are people out there now, sitting in their houses, or bedrooms, with phones, recording themselves, who could be the best broadcasters of tomorrow. You have to keep your eyes open, because anyone, anywhere out there, could be the next big thing, and I want to give them a home where they can reach an audience right here.

43

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BOOK NOW, CALL 011 280 8400 WWW.BUSABOUT.COM *Terms and conditions apply: Travel for people 18 years and over for travel on selected dates. Prices are from prices, per person land only quoted in South African Rand. Valid for travel on selected departure dates from August to October 2014 Full terms and conditions on busabout.com

includes 7 NIGHTS ACCOMMODATION 7 BREAKFASTS & DINNERS 6 LUNCHES AFTERNOON TEA AND COFFEE SNORKELS/MASKS/FLIPPERS/FISHING LINES & BOARD GAMES

highlights★ A TRADITIONAL TURKISH GULET SAIL BOAT ★ THE FRIENDLIEST LOCAL CREW ★ SECLUDED BAY MOORINGS ★ THE AMAZINGLY FRESH FOOD ONBOARD ★ ÖLÜDENIZ BLUE LAGOON ★ KEKOVA’S SUNKEN CITY ★ KAS, THE PEARL OF THE MEDITERRANEAN ★ KALKAN, WITH ITS COBBLED STREETS ★ BUTTERFLY VALLEY ★ SMUGGLERS COVE PIRATE ISLAND NIGHTCLUB ★ THE STUNNING SUNSETS

8 days from R5160*

TMT: Can you expand on how you are trying to launch young people into the industry, and do you think there is capacity in SA for it? GC: The problem in SA is that we are not creating enough opportunities for young people to really show off their talent. We give them little windows. We have talented guys right here, like Siya, who is our intern and chief. He is a talented guy. He works very hard. He is the type of guy that could be a CEO in his 20s, or 30s at a push. He is the kind of guy I want to work with. There are probably lots of Siya’s out there. I am willing to bet that, just based on our auditions, there are many very advanced young people who are just waiting to make a break. If we can introduce some kind of mechanism that can help young people like that make a break, then we are really onto something.TMT: Are there any speci�c people, that as a young person, you looked up to?GC: I am not really one for role models. Humans are fallible, and I am very realistic about what people can do. We all have our failings in character, and our more disappointing features and characteristics. Instead of holding someone on a pedestal as a paragon of humanity, I would rather take the best out of the people I interact with, rather than choose one person and wholeheartedly consume everything that they do. There are many people I look up to around me, like Rina [Broomberg, Gareth’s business partner] who has a real feel for things that few people have. She has a way of working with energy that is very interesting to observe, and even if I weren’t working with her, she would still intrigue me. There are people on the air right now that really intrigue me.TMT: Many people come into a prede�ned world, where society tells you how to do things. How do you manage to work beyond social norms and conventions in order to create your own reality?GC: I think that this idea of thinking outside the box puts undue pressure on people who have good ideas to start off with. Reality is all an illusion; all you have to do is stop letting other people tell you how things are. Don’t take anyone’s word for it. If there is any reason to be free it is this: That your ideas and thoughts can be translated into actions, and if your actions can mirror what you say then you’ll have integrity. Then you are the complete thing. If

If there is any reason to be free it is this: That your ideas and thoughts can be translated into actions, and if your actions can mirror what you say then you’ll have integrity.

you let others decide for you, and you take what everyone else says as gospel truth, without interrogating it yourself, without asking why, then you are allowing other people to de�ne your reality, and what a horrible way to live. Not here – that’s not what 1994 was all about. 1994 was about us using our brains to �gure it out ourselves. And the fact that we can now say whatever we want and we can express the inner thoughts of our heads without having to worry about being embarrassed or being told that we are wrong – that’s freedom. Not voting once every �ve years. Which is why I am so passionate about young people having an informed opinion on things. As long as you guys keep doing the kind of stuff you are doing, our future will be better; and that’s why I believe in young people in this country.

BOOK NOW, CALL 011 280 8400 WWW.BUSABOUT.COM *Terms and conditions apply: Travel for people 18 years and over for travel on selected dates. Prices are from prices, per person land only quoted in South African Rand. Valid for travel on selected departure dates from August to October 2014 Full terms and conditions on busabout.com

includes 7 NIGHTS ACCOMMODATION 7 BREAKFASTS & DINNERS 6 LUNCHES AFTERNOON TEA AND COFFEE SNORKELS/MASKS/FLIPPERS/FISHING LINES & BOARD GAMES

highlights★ A TRADITIONAL TURKISH GULET SAIL BOAT ★ THE FRIENDLIEST LOCAL CREW ★ SECLUDED BAY MOORINGS ★ THE AMAZINGLY FRESH FOOD ONBOARD ★ ÖLÜDENIZ BLUE LAGOON ★ KEKOVA’S SUNKEN CITY ★ KAS, THE PEARL OF THE MEDITERRANEAN ★ KALKAN, WITH ITS COBBLED STREETS ★ BUTTERFLY VALLEY ★ SMUGGLERS COVE PIRATE ISLAND NIGHTCLUB ★ THE STUNNING SUNSETS

8 days from R5160*

The recent FIFA World Cup in Brazil failed to disappoint, as

old football fans and new witnessed a month-long celebration of the world’s

most popular sport. Despite popular domestic opposition to the World Cup and a number of logistical problems,

FIFA and the Brazilian Local Organising Committee delivered a smoothly run tournament in which fl owing football and amazing goals were the order of the day. Now that

the football action is over and a new world champion crowned, it’s time

for the citizens of the competing nations to return to the reality of everyday life. What better way to

do that, than to take a look at the economic prospects of the countries

for remainder of the year.

THEECONOMIC

WORLDCUP

BY SIYABONGA MSELEKU

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UNITED STATES OF AMERICAWe’ll start with the world’s largest economy, the United States of America. A lot has been made about the recent economic rise of China and its potential to overtake the US, but the American economy remains the world’s largest and has been steadily, if slowly, improving over the past few years. During the � rst quarter of the year, the US economy showed a disappointing 2.9% contraction in GDP. This was attributed to the extremely cold weather. Since then, economic activity has picked up and a sure sign of this was the June monthly jobs data. The US added 288,000 jobs to the economy, which reduced the unemployment rate to 6.1%. The US stock market has enjoyed healthy gains in 2014 and has performed much better than one would expect, considering the weaker performance of the US economy as a whole. This disparity between the broader economy and US stocks is due to healthy corporate pro� ts and the loose monetary policy of the Federal Reserve, the US’s central bank. The Fed has been engaged in a controversial program of bond-buying and low interest rates that has led investors to enter the market and support what some commentators have labelled as “arti� cially high asset prices.” However, this program is slowly being wound down and should end in the fourth quarter of 2015. This will put pressure on the government to put into place policies that will stimulate higher growth in the economy. However, with the mid-term elections looming and Congress seemingly inactive, there is little hope for any such policy before the next presidential election in 2016.

UNITED KINGDOMContrasting with England’s dismal showing in this year’s World Cup and the failure of any other of the UK’s countries to qualify, the UK economy has been the best performing economy of any Group of Seven nation this year. This was on the back of a 0.8% increase in GDP in the � rst quarter of 2014. This means that the UK’s output, excluding oil and gas, is now above its pre-recession peak, which is quite an achievement considering depressed construction activity in the � rst quarter due to storms. Each of the main categories in GDP were measurably higher, with manufacturing, industrial production and the all-important services sector – which forms the largest part of the economy – having increased 1.3%, 0.8% and 0.9% respectively. Labour markets were also buoyed by the increase in output, and unemployment has fallen to 6.5%.

However, the UK is still facing some downside risks to its economy. Domestic housing prices have continued increasing, which has sparked fears of a housing bubble. If the fears prove to be true, a bursting of such a bubble could drag the UK’s recovering economy back into recession. This possibility has been a headache for the Governor of the Bank of England, Mark Carney, as calls mount for the central bank to raise interest rates. Critics claim that the housing bubble should be combatted with increased rates and the BOE’s own measure for raising rates, a 7% unemployment rate, has been breached. Carney and the BOE’s Monetary Policy Committee would be loath to increase rates at this point and risk jeopardising England’s forecasted growth of 3% for the year. In light of these concerns, the BOE’s Financial Policy Committee has recommended imposing more stringent affordability tests to ensure that borrowers can afford their mortgages. This is to be coupled by limits on high loan-to-income mortgages with a view of minimising household debt.

Other headwinds to the economy relate to the uncertainty stemming from the political stage. There has been growing popular support of Scottish independence from the UK, which has led to a referendum scheduled to take place on 18 September 2014. A split between Scotland and the UK would lead to a dif� cult economic restructuring that could sti� e growth. On the European political landscape, Jean-Claude Juncker has been elected as the next president of the European Commission, much to the opposition of UK Prime Minister David Cameron. The election of Juncker has set off a chain of events that may end with UK leaving the European Union. Again, the resultant economic restructuring could have negative effects on the UK’s economic recovery.

The US stock market has enjoyed healthy gains in 2014 and has performed much better than one would expect, considering the weaker performance of the US economy as a whole.

48

JAPANThe Blue Samurai entered the tournament as Asian Champions but failed to progress past the group stages after three losses. In fact, this edition of the

FIFA World Cup was nothing less than a complete failure

for its Asian participants: four teams, 12 games and 12 losses.

The re-election of Shinzo Abe into the position of Japanese Prime Minister

introduced the Japanese economy to a raft of looser monetary policies, � scal stimulus and

structural reforms that has come to be known collectively as Abenomics. Abenomics has been credited with lifting the Japanese economy out of more than 15 years of de� ation and ushering the nation into a period of sustained in� ation, increased employment and growth. Corporate pro� ts have soared by more 70% and this has been re� ected in the stock market, as the Nikkei 225 index gained 56.72%. However, the � nal quarter of 2013 and the � rst quarter of 2014 saw less than expected growth, prompting concerns that the Liberal Democratic Party’s economic reforms were losing steam.

A critical strategy of Shinzo Abe’s reforms was to devalue Japan’s currency, the yen, in order to make exports cheaper to its trading partners and entice more countries to buy Japanese products. Despite these efforts, Japanese exports failed to signi� cantly pick up in 2013. Instead, the weaker currency made imports more expensive and Japan’s trade de� cit, the difference between foreign products imported by Japan and Japanese exports, surged to an all-time high of 1.58 trillion yen (this has since come down to 910.76 billion yen). In addition, “Abenomics” has been very expensive, pushing government debt as a percentage of GDP to 227.2%.

Despite all these concerns, Japan’s largest problems are found in its rapidly aging population. As more of Japan’s population retires and its population pyramid inverts, the dwindling workforce will be less able (and less tax revenue will be generated) to support signi� cant government commitments on pensions, medical expenses and social security. This burden is sure to be a signi� cant headwind to the future growth required to bring Japanese public debt under control. To counter this, the Abe government needs to consider further structural reforms, such as immigration reform and more women-friendly labour laws to alleviate labour shortages.

BRAZILThe host’s of this year’s footballing showpiece, Brazil lacked the impressiveness of past national teams. However, this de� ciency failed to dampen the spirits of the home crowd or curb expectations of a 6th World Cup triumph. Almost mirroring the fortunes of the national team, the Brazilian economy, once booming, has come upon some hard times. This is mainly due to the US Federal Reserve’s “tapering,” in which the central bank is cutting down on the amount of US treasuries it purchases in its quantitative easing program. Investors who had sought better yields by venturing into emerging markets sold out of their riskier positions in the Brazilian Bovespa stock market, which led to a 14% depreciation of the Brazilian currency, the real. This made imports more expensive and pushed in� ation to just under 6%, which has since increased to 6.37%. To support the real, the Banco Cenral do Brasil, Brazil’s central bank, embarked on a year-long rate hike that pushed the benchmark interest rate to past the psychologically important 10% to where it sits now at 11%. The Bank also engaged in a $60 billion intervention program to support the real, which included selling foreign-exchange swaps for $47

million dollars. This year’s World Cup is expected to be the shot in the

arm that the Brazilian economy needed to grow in earnest. However, opinion is divided on whether

the World Cup has provided the hoped-for stimulus. Vicente Neto, head of Brazil’s

Embratur tourism board said that the World Cup had injected an estimated $15 billion into the economy and created 1 million jobs. Critics questioned whether or not the jobs created were permanent and also pointed out the tendency of hosting such events to boost in� ation and public debt, which currently sits at 56.80% of GDP.

Abenomics has been credited with lifting the Japanese economy out of more than 15 years of de� ation and ushering the nation into a period of sustained in� ation, increased employment and growth.

Almost mirroring the fortunes of the national team, the Brazilian economy, once booming, has come upon some hard times.

However, more spending is on the cards, as Rio

de Janeiro prepares to host the 2016 Olympic Games. President Dilma Rousseff will be hoping that spending on these two events accelerate economic growth more than the expected 1.3% as Brazil will be holding its general elections

on 5 October, this year. Despite the wakened

economy, Brazil’s labour market is very strong, with an

unemployment rate of just 4.9%. Key to increasing Brazil’s economic

growth will be its ability to expand gains made in the services sector, which comprises

about 70% of GDP, to the rest of the economy.

NIGERIAThe Super Eagles won their third Africa Cup of Nations in South Africa last year, so perhaps it was � tting that a year later, Nigeria would surpass South Africa as Africa’s largest economy, due to a rebasing of its GDP. Entering the tournament as African Champions, and with the title of Africa’s largest economy, meant that Nigeria were under serious pressure to perform well. It was about 17 years ago that the man considered as the world’s greatest player, Pele, predicted that an African nation would win the World Cup before 2000; Africa is still waiting for that to happen. Nigeria showed immense potential during the tournament, but ultimately were knocked out by France in the round of 16 after succumbing to their now customary lapses in concentration and conceding two preventable goals.

Similarly, Nigeria’s economy has immense potential, but due to many constraints, it has failed to develop suf� ciently. Chief among these constraints is Nigeria’s dearth of growth-supporting infrastructure, like an electricity grid capable of providing a stable supply to industry and a comprehensive national highway system. Also, inadequate access to capital means many businesses are unable to fund expansion plans that would contribute to higher economic growth and tackle the unemployment rate of 23.9%. The Nigerian oil industry is also poorly served by a lack of oil re� neries. Of the four major re� neries in the country, one, the Kaduna Re� nery is defunct, and two others, the Warri and Port Harcourt Re� neries, only operate at 30% capacity. This means that the majority of Nigerian crude oil is extracted by oil multinationals and is re� ned outside its borders. A result of this is the inability of ordinary Nigerians to afford petroleum products.

The uncertainty and geopolitical turmoil caused by emergence of the terrorist organisation Boko Haram is also a considerable drag on Nigeria’s growth prospects. According to Nigerian president, Goodluck

Jonathan, the group is responsible for 12,000 Nigerian deaths. The existence of this group makes private capital unwilling to invest in infrastructure construction in Northern Nigeria. For there to be any chance of economic development of Northern Nigeria, President Goodluck Jonathan needs to take � rm action to counter the violent activities of Boko Haram.

Despite these challenges, the Nigerian economy is still forecast to grow signi� cantly more than our own. According to a Bloomberg survey of 13 economists, Nigerian GDP is forecast to grow 7% in 2014, on the back of a 6.4% expansion last year. Also, sectors such as e-commerce, telecoms and the proli� c “Nollywood” � lm industry, which is worth 1.4% of GDP, are in healthy condition and are set to grow signi� cantly. South African companies seeking to expand into Africa and reap the bene� ts of the “African growth story” have targeted Nigeria as a major market to enter due to its 170 million population.

While the World Cup may have been a tournament where there can only be

one winner, the same can not be said of the

global economy. These � ve nations are all

trading partners and are interconnected in this

new age of globalisation. With the global economy still not fully recovered

from the recent � nancial crises, one can only

hope that the leaders of these countries

are able to enact the necessary reforms so as to usher their respective

economies into a period of sustained

growth.

Nigeria’s economy has immense potential, but due to many constraints, it has failed to develop suf� ciently.

50

An index fund makes it easy to invest into the market, especially when you do not have the money to buy individual shares.

An index fund pools money together like that of a mutual fund or unit trust in order for the investor to put smaller amounts of money into a bigger part of the market all at once.

An example to make this more clear, which is one of the most famous index funds, is the Dow Jones Industrial Average (DJIA). This index fund is a group of companies, all with similar characteristics, but covering a large portion of the market.

An index fund is usually a good indicator of how the market is doing. The index works like a sample of companies in the market, in order to measure performance.

An index fund does not always do a good job at re� ecting the performance of the market, though. Between 1999 and 2000 the DJIA was climbing from 10,000 to 11,000 – a new record! During the same time, most other companies were struggling as their stock price movements declined.

An index fund is regarded as a more passive way of investing in the market. Quite often an index fund will even beat the returns of an active fund manager. This is because index funds do not have the high management fees associated with a fund manager, and they are not subject to the emotions of some fund managers, which may result in human error.

A popular index fund in South Africa to consider is the Satrix Top 40. This fund consists of the top 40 companies on the JSE.

WHAT IS AN INDEX FUND?

Have you ever heard someone use the phrase: “Beating the Market”? What they are referring to here is an index fund, which is defi ned as a group of stocks

tracking a certain part of the market.

Alcoa (AA)Honeywell International Inc (HON)

Altria (MO)Intel (INTC)

American Express Co. (AXP)International Business Machines (IBM)

American International Group (AIG)Johnson & Johnson (JNJ)

Boeing (BA)JP Morgan Chase (JPM)

Caterpillar (CAT)McDonald’s (MCD)

Citigroup (C)Merck (MRK)

Coca-Cola (KO)Microsoft (MSFT)

Disney (DIS)Minnesota Mining and Manufacturing (3M) (MMM)

DuPont (DD)Pfi zer (PFE)

Exxon Mobil (XOM)Procter & Gamble (PG)General Electric (GE)

SBC Communications (SBC)General Motors (GM)

United Technologies (UTX)Hewlett-Packard (HPQ)

Verizon (VZ)Home Depot (HD)

Wal-Mart Stores (WMT)

THE DOW JONES INDUSTRIAL AVERAGE (DJIA) TRACKS 30 OF THE LARGEST AND MOST INFLUENTIAL

COMPANIES IN THE MARKET

THE NEW INVESTOR

Old Mutual is a Licensed Financial Services Provider

If success is your priority� getting the right �nancial advice from the right person is the �rst step to take. Old Mutual employs �nancial advisers� like �abulani and Enrico� who are authorised to give you personalised advice on �nancial solutions for which they are accredited - advice that is backed by Old Mutual and will one day give you the edge. So give them a call and speak to them about your �nancial needs. Because it all begins with a plan.

Jabulani Ndlovu+27 (0)83 860 5029 (cell)jndlovu@oldmutualpfa.com (email)

Enrico Louw+27 (0)84 021 6846 (cell)enrico.louw@oldmutualpfa.com (email)

YOU CHOOSE ACAREER PATH.�E�LL TAKE CAREOF THE FINANCIAL PATH.

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BY JACK NEWBY

Old Mutual is a Licensed Financial Services Provider

If success is your priority� getting the right �nancial advice from the right person is the �rst step to take. Old Mutual employs �nancial advisers� like �abulani and Enrico� who are authorised to give you personalised advice on �nancial solutions for which they are accredited - advice that is backed by Old Mutual and will one day give you the edge. So give them a call and speak to them about your �nancial needs. Because it all begins with a plan.

Jabulani Ndlovu+27 (0)83 860 5029 (cell)jndlovu@oldmutualpfa.com (email)

Enrico Louw+27 (0)84 021 6846 (cell)enrico.louw@oldmutualpfa.com (email)

YOU CHOOSE ACAREER PATH.�E�LL TAKE CAREOF THE FINANCIAL PATH.

52

This fable simply illustrates one of the most important reasons for investing. Firstly, let’s de� ne what is meant by the term “investing.” Investing is the act of expending money with the expectation

of achieving a pro� t or appreciation of value by putting it into � nancial product, assets, shares or property, or by using it to develop a commercial venture. As suggested by the fable of the Grasshopper and the Ant, the good times can never last forever. Inevitably, we are all faced with times where the � nancial demands of life exceed our resources. Whether it is retirement or paying for children’s education, the cost of such occurrences far exceed the monthly salary of your average individual. This is true even if one has been saving a portion of their salary in a standard interest-bearing savings account for a lengthy period. Studies show that the average

THE IMPORTANCE OF INVESTING

THE IMPORTANCE OF

At some stage of our lives, most of us have been exposed to one of Aesop’s

Fables. This inimitable method of storytelling that substitutes human characters for animals in order to expose our failings in the simplest

ways is a useful teaching device. One of my favourites is the tale of the

Grasshopper and the Ants. For those who need a refresher, or those who

haven’t been exposed to it, here it is in brief: A cheerful, carefree Grasshopper encounters a hardworking Ant bearing an earful of corn. Seemingly perplexed

at the idea of the Ant’s labour, the Grasshopper proposes the Ant join

him in a chat. The Ant replies that he is collecting food for the harsh winter

and recommends the Grasshopper does the same. Carefree as ever, the Grasshopper remarks that there is

plenty of food at the present and thus, there is no need to worry about the winter. Unmoved, the Ant continues

with his toil. When the winter comes, the Grasshopper has no food and fi nds himself dying of hunger. Upon seeing

the Ants distributing food among themselves from their stores, the Grasshopper realises: “It is best to prepare for the days of necessity.”

MARKETS & ANALYSIS

53

South African is woefully unprepared and � nancially unable to sustain themselves for the duration of the average retirement period of 18 years. According to Sanlam’s “Benchmark Retirement Survey,” 60% of South African pensioners do not have enough to live on and this already bleak � gure is steadily worsening. Dawie de Villiers, the Survey’s co-author and chief executive of� cer of Sanlam Structured Solutions, projects this � gure to increase to 90%. Furthermore, 94 % of South Africans can’t maintain a decent standard of living during retirement.

The main reasons for this are two-fold: the average South African has very poor saving habits and, if they do save, the funds are typically not suf� cient. In fact, according to a recent National Treasury discussion paper, “the household savings rate, net of depreciation, has fallen

steadily over time.” South Africans simply don’t have a culture of saving. Secondly, many of those who do have some sort of a pension plan � nd that when the time for retirement comes, the funds they have amassed are grossly insuf� cient for a long-term, comfortable retirement. This is mainly because the vehicles chosen for the pension plans are simply unable to provide a sizeable enough return. The most common sources of future pension funding for most South Africans are their company sponsored-funds and individual provisions they have made themselves.

THE IMPORTANCE OF INVESTING

The most important element that maximises the growth of your investment is time.

BY SIYABONGA MSELEKU

54

Actuaries have worked out a basic formula to calculate how much should be saved up in your retirement fund by the time you retire:• To retire at age 55, you will need to have saved 12 times your

average annual income.• To retire at age 60, you will need to have saved 11 times your

average annual income.• To retire at age 65, you will need to have saved 10 times your

average annual income.• It is the generally accepted principle that you should save 15% of

your salary for 30 years to reach these targets. The stark reality is, for a number of reasons, that company pension funds are insuf� cient on their own to provide the adequate funding for a comfortable retirement. Total employer and employee contributions to such company pensions was shown to be an average of 11.7%. Firstly, since the 2008 � nancial crisis, companies have been cutting back on their de� ned contribution pension plans. Most companies have stopped medical aid contributions for retirees. More than 80% of retirement funds do not provide post-retirement medical aids. This means that when you retire, you have to foot the bill for all your medical costs. These costs tend to mount signi� cantly as old age brings with it frailty and illness. According to a study in The American Journal of Medicine, at least 62% of all American family bankruptcies result from medical expenses.

These days, with the advances in medical technology, people are living longer. Although this is good news, it also means that you need more money for your retirement. This, coupled with the tendency for younger generations to retire earlier, means that the strain on your company retirement plan will be larger than ever.

What about the secondary source of retirement funding? Most people’s pension plans consist of the mere long-term savings account found at any bank. Although this is better than nothing, the return on such accounts, typically between 8 – 10%, amounts to little more than 1 – 3% once in� ation is taken into account. A measure of how insigni� cant this is, is the fact that it would take 23.5 years to double your principal investment at such interest rates, once in� ation is taken into account.

You may be thinking that you’re young and it’s too early to be thinking about retirement and � nancial planning. Well, this is simply not the case. As Tennessee Valley Authority Chairman Arthur E Morgan put it: “Preparation for old age should begin not later than one’s teens. A life which is empty of purpose until 65 will not suddenly become � lled on retirement.” The earlier you start preparing for retirement, that means investing, the more you can accumulate in your nest egg and support a more comfortable retirement.

Possibly the most important element that maximises the growth of your investment is time. The main reason for this is the exponential power of compound interest. For example, in a standard retirement annuity, not only do your principal and monthly instalments earn interest, but the interest earned also earns interest in subsequent years. This may sound academic, but this small fact holds a lot of power. Simply put, the earlier you start, the more time you allow the value of your investments to accumulate, which puts less pressure on you later on in life. The schematic below illustrates how much you will need to invest at different ages to reach a goal of R1 million at a projected retirement age of 65. These calculations are based on a monthly salary of R20,000 – R30,000 and an investment return of 10% per annum after charges.

Hopefully, at this point you’re wondering what sorts of investments you should make to save up for a comfortable retirement. The answer is unique to everyone. This is because the structure of your investment portfolio depends on a number of factors, such as your age, risk pro� le, occupation and the type of lifestyle you intend on living in retirement. Broadly speaking, it is advisable for your retirement plan to consist of your future employer’s de� ned contribution pension plan and a secondary privately funded pension plan to supplement the company pension. This secondary pension plan should consist of two investments that result in two different � ows of income. Firstly, you’ll need some sort of revenue stream that � ows to you on a monthly basis to fund your daily lifestyle. This is funded by a pension called a “living annuity.” Secondly, you’ll need a revenue stream that � ows to you on a “lump-sum” basis for once-off, large payments like holidays or helping pay for your future children’s weddings. This is funded by a tailored portfolio comprising of assets such as shares, bonds, unit trusts etc.

There are many companies out there that can help you with the particulars, one of them being the JM Busha Investment Group. However, you should always remember to consult a registered � nancial adviser before making any investment plans.

Age Saving Started(based on estimated retirement age of 65)

12 15 19 22 29 39 55 88

20 25 30 35 40 45 50 55% of Salary Required

(based on estimated monthly earnings of R20,000 – R30,000)

Investing is the act of expending money with the expectation of achieving a pro� t or appreciation of value by putting it into � nancial product, assets, shares or property, or by using it to develop a commercial venture.

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EOH (Enterprise Outsourcing Holdings) has been one of the best performing shares

on the JSE in the recent past. It is a leader in technology and business solutions operating in SA, Africa and the UK. It listed in 1998 and has since had an annual compounding rate of 45%. Talk about investors making a return.

EOH builds its business on three pillars in the IT arena – consulting, technology and business process outsourcing. They are the largest provider of cloud computing solutions in Africa. Cloud computing, right now, is the buzzword in the technology sector. It is de� ned as the practice of using a network of remote servers hosted on the Internet to store, manage and process data, rather than a local server or a personal computer.

EOH generates much of its earnings from the government’s spending on IT and this has continued to push their earnings higher. At the beginning of the year I came across a platform that can � lter stocks on the JSE that � nancial gurus would invest in just relating to their Financial Statements. Warren Buffett’s � lter came up with EOH. And Buffett likes consistent increases in earnings (EOH’s have compounded for the last 10 years at an incredible 40%); a strong return on capital (averaging around 17%) and a conservatively � nanced balance sheet (EOH doesn’t use much debt).

Due to the exponential rise of this stock, the valuations are starting to look fairly frothy. Its PE has increased to over 22 with its average over the last 10 years being around 11. But with EOH expanding into the rest of Africa and the

government continuing to spend vast amounts on IT, EOH could be expected to carry on its growth story and therefore the PE of over 22 could be justi� ed. With EOH’s market cap also increasing – and recently reaching the R10 billion mark – big institutional investors are starting to pay more attention to the company and this could serve as a catalyst when they start to acquire this share.

I always like to know what the potential risks associated with an investment could be. If the government stops spending so much on IT, or a big name IT solutions company from overseas makes a concerted effort to gain market share in SA, or EOH’s expansion into Africa doesn’t go as well as planned, all of these factors could negatively affect their growth. And growth is what investors are paying for.

ENTERPRISE OUTSOURCING HOLDINGS LTD

MARKETS & ANALYSIS

FUNDFOCUS

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2010

146.

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2011

196.

10

2012

253.

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2013

339.

10

HEADLINE EARNINGS PER SHARE

Due to the exponential rise of EOH stock, the valuations are starting to look fairly frothy.

BY JACK NEWBY

55

56

But this is not your average crazy guy, not at all!

This is a new kind of crazy guy – one that you can look up to, who has absolutely no respect and tolerance for the status quo. His name is Elon Musk or “Crazyman Musk” as I would call

him. He personi� es what an entrepreneur should be: a businessman so cool in his � eld (science and technology) that there is a superhero modelled on his life. Remember Tony Stark? Iron Man? The guy with the amazing suit? Musk was the inspiration for this � ctional character and he even makes a brief appearance in Iron Man 2 – you might need to watch it again after this.

Musk is the current CEO of SpaceX and Tesla Motors, two major companies which he founded. At the age of 12 Musk had already taught himself computer programming and sold his � rst game called Blastar for $500. What have you and I done that completely beats the status quo? My point here is that Musk was already showing signs of what kind of “grown up” he would be at an early age – and that is a “grown up” that never grows up; one who keeps on believing the seemingly impossible.

“The idea of lying on a beach as my main thing just sounds like the worst – it sounds horrible to me. I would go bonkers. I would have to be on serious drugs,” says Musk. Hence he spends so much time on Tesla Motors and SpaceX.

Tesla is a company that is completely changing the world’s view of electric cars. You will probably not � nd a cooler and more technologically advanced electric car than a Tesla on this planet. As an American car, perhaps second only to the legendary Ford Mustang, Tesla is making history in the automotive industry.

Unlike other car manufacturers, Tesla does not use single-purpose, larger format cells. They instead use thousands of lithium-ion 18650 commodity cells. In simple English, these are cylindrical battery cells, which are typically found in laptops. Tesla uses a unique version of these cells, designed to be cheaper to manufacture and lighter than standard cells. This is achieved by removing some safety features which, according to Tesla Motors, are redundant because of the advanced thermal management system and a protective intumescent chemical in the battery pack. Although it has not been all warm and fuzzy for Musk or Tesla, it is safe to say that the automotive industry seems to be heading in Tesla’s direction.

When it comes to SpaceX, Musk is breaking boundaries there too. One of his key goals is to develop reusable rockets, a feat that will transform space exploration by delivering highly reliable vehicles at radically reduced costs. They are also aiming to provide a commercial crew spaceship, with the ultimate goal of enabling people to live on other planets. “SpaceX is like Special Forces,” says Musk, “we do the missions that others think are impossible. We have goals that are absurdly ambitious by any reasonable standard, but we’re going to make them happen. We have the potential here at SpaceX to have an incredible effect on the future of humanity and life itself.”

CRAZYMANMUSK

While you are reading this, there is a guy out there who is doing crazy things: he says he wants to die on Mars, that solar is the energy of the future, he believes that in a few

years’ time petrol will be spoken of only in history classes and, in his own words, “If somebody wants to go to the Moon, we can defi nitely do it.”

On risk “Failure is an option

here. If things are not failing, you are not innovating enough.”

On perseverance “If something is important enough, even if the odds

are against you, you should still do it.”

On ideas“[Physics is] a good

framework for thinking… Boil things down to their fundamental truths and reason up from there.”

On college “One particular thing

that I learned at Queen’s – both from faculty and

students – was how to work collaboratively with smart

people and make use of the Socratic method to achieve commonality of purpose.”

On the future “There’s a fundamental

difference, if you look into the future, between a humanity that is a

space-faring civilization, that’s out there exploring

the stars… compared with one where we are

forever confi ned to Earth until some eventual extinction event.” S

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BY KARIDAS TSHINTSHOLO

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FIRST RIGHT HAND DRIVE TESLA MODEL S ARRIVES IN LONDONIn June, Tesla CEO Elon Musk delivered � ve new Model S cars to customers in London at an event to mark the arrival of right hand drive (RHD) Model S in the UK. The occasion marks the beginning of a planned rapid expansion in the country in the coming two years. And for us South Africans, RHD is good news.

The Model S is an uncompromised electric car that delivers 502 kilometres of range on a single charge. With a 17-inch touchscreen, an outstanding safety record, and an acceleration of 0-100 km/h in 4.4 seconds, the fully electric Model S breaks the mould. Right hand drive cars in the UK come with software speci� c to the country and a con� guration that � ts the needs of owners who drive on the left hand side of the road. Everything from the wipers to the braces in the front trunk have been re-� tted for RHD. 

Tesla also energised the � rst Supercharger location in the UK at the delivery event. The Crystal site at London’s Royal Victoria Docks represents the beginning of a route to Paris and then the rest of Europe, which will enable Model S drivers to travel long distances in the UK and on the continent for free.

Musk said that by the end of the year Model S drivers will be able to travel almost anywhere in Europe using Superchargers. The company is energising Superchargers at a rate of close to one per weekday. Currently, 116 Supercharger locations are energised worldwide, including 19 locations in Europe. Tesla Superchargers have so far offset more than 2.5 million litres of petrol.

Meanwhile, back in the US, Tesla announced, also in June, a major SuperCharger feat – the network passed a charging milestone, delivering more than 1GWh of energy to Model S vehicles in a single month. That energy accounts for a collective 3.7 million miles driven, 168,000 gallons of gas saved, and 4.2 million pounds of carbon dioxide offset. That’s like driving to the moon and back seven and a half times, and nixing a day’s worth of CO2 from 73,684 Americans.

Supercharger routes now span the entire width of the United States, from Los Angeles to New York, as well as up and down the East Coast and the West Coast. By the end of next year, 98% of the US population will be within 100 miles of a Supercharger. According to Tesla, as of June 2014, Superchargers have powered a total of 24.7 million miles of driving – which means the world has been spared the burning of 1.1 million gallons of gasoline.

THE TESLA SUPERCHARGER NETWORKIn June 2014, Tesla’s SuperCharger Network passed a

charging milestone, delivering more than 1GWh of energy to Model S vehicles in a single month.

That energy accounts for a collective

3.7M miles driven

168K gallons of petrol saved

4.2M pounds of CO2 offset

Which is the equivalent of

7.5 trips to the moon and back

$622K saved at the petrol pump

73,684 Americans’ average daily CO2 output

SuperChargers replenish half a charge in as little as

20 minutes, and it’s totally free.

SuperCharger routes span the United States, from

LA to NYAs well as up and down the West and East coasts

98% of the US population will be within

100 miles of a SuperCharger by the end of 2015

SuperChargers have powered more than

24,700,000 milesof driving, which means

1,100,000 gallonsof petrol didn’t have to be burned

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SPACEX UNVEILS DRAGON V2SpaceX has gained worldwide attention for a series of historic milestones. It is the only private company ever to return a spacecraft from low-Earth orbit, which it � rst accomplished in December 2010. The company made history again in May 2012 when its Dragon spacecraft attached to the International Space Station, exchanged cargo payloads, and returned safely to Earth — a technically challenging feat previously accomplished only by governments. Since then Dragon has delivered cargo to and from the space station multiple times, providing regular cargo resupply missions for NASA.

In July, SpaceX unveiled Dragon v2, their next generation spacecraft designed to carry astronauts to Earth orbit and beyond. The spacecraft will be capable of carrying up to seven crewmembers, landing propulsively almost anywhere on Earth or another planet, and refueling and � ying again for rapid reusability. It is likely that this manned spacecraft will revolutionise access to space.

Dragon v2’s powerful launch escape system, the � rst of its kind, will provide escape capability from the time the crew enters the vehicle all the way to orbit. Eight SuperDraco engines built into the side walls of the Dragon spacecraft will produce up to 120,000 pounds of axial thrust to carry astronauts to safety should an emergency occur during launch. This system also enables Dragon v2 to land propulsively on Earth or another planet with the precision of a helicopter, making possible interplanetary trips that would otherwise be constrained by ocean landings.

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Launch Control

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With a minimal number of stage separations, all-liquid rocket engines that can be throttled and turned off in an emergency, and launch escape capability all the way to orbit, Dragon v2 will be capable of delivering astronauts

to the space station and beyond.

Landing propulsively is not only convenient, but also enables rapid

reusability. As long as we continue to

throw away rockets and spacecraft, we will never have true

access to space. After landing, Dragon v2

can be refuelled and � own multiple times,

drastically lowering the cost of space travel.

Dragon was designed from the beginning

to carry humans, and the upgraded

vehicle revealed here will be one of the

safest, most reliable spacecraft ever � own.

The vehicle holds seats for seven passengers,

and includes an Environmental Control

and Life Support System (ECLSS) that provides a

comfortable environment for crewmembers.

WATCHThis Is SpaceX: http://youtu.be/ujX6CuRELFE

Elon Musk: The Case For Mars: http://youtu.be/Ndpxuf-uJHE

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They called him ”Steve Austin” and he was a former astronaut who ended up working for a super undercover organisation. Few people will remember the name of the organisation, because the

1970s are now almost 50 years gone. But, you can bet that there is many a scientist out there today who found some of his or her original interest in science tickled by science � ction, and in the particular case of “Steve Austin,” by him being the � rst bionic television star in the hit series The Six Million Dollar Man. Supposedly, that was the amount of money spent on � tting him with his superior athletic abilities used in tracking down any array of bad guys that the scriptwriters could conceive. [It would be interesting to know what in� ation has since done to that amount – would a remake of the series today mean we call it the $54 Million Man?)

The idea of the bionic human being is a provocative one that has challenged bio-ethicists, religious communities as well as plain-Jane citizens for many decades. There has been, and remains, a disconcerting question about when enough is enough when it comes to this concept of fusing humans’ inner-space – our physiological make-up – with our outer space, such as with the technologies we can use to achieve our goals. In the end, this discussion often comes down to a question about

our free will and the fear that, in the assignment of control over some of our abilities to some external laboratory, we may end up becoming mere pawns in someone else’s hands.

Science � ction writers have had a blast with these fears and possibilities and have served us a smorgasbord of characters, including the ubiquitous Darth Vader and the Terminator, all enhanced or supplemented in one way or another by the introduction of a bio-mechatronic ability of sorts. Cyborgs and bionics function, it appears, by linking mechanical or electronic capabilities to the human’s muscular, nervous or skeletal system, often leaning on neuroscience or robotics, each of these being a fascinating � eld of scienti� c enquiry in their own right.

In 2014, dubbed “The Year of Wearable Technology,” the story of wearable technology could, of course, also be introduced from a gadget perspective, for there are many and they are often really cool. But it seems in� nitely more interesting to consider this new fad against an almost century-old storyline of encroaching technology, leading to who knows what in the distant future. Because, yes, we are indeed crossing a line and, at that, an important line, and we really do not know when enough will be enough. Will a benevolent futuristic government provide

New Terminology With new products and applications comes lovely new language, none more amusing than the reference to some users of Google Glass as “Glassholes” because of their propensity to become know-it-alls.

Dash Earphones Understatement can be so classy. With Dash, you say goodbye to all the wires dangling from the side of your head. Hardly noticeable and for about R3,000, you can now � t an earphone with awesome sound that can also read your essential biometrics and location.

Pebble Learn this name now if you still do not know it, as this wearable smartwatch was voted Stuff Magazine’s Tech Accessory of the Year for 2013 and v2.0 is on its way.

Bionic Pancreas On the heels of The Dario, aimed at managing diabetes, comes the Bionic Pancreas developed by researchers in Boston. It provides feedback data on glucose levels to a receiver that transmits that data to an iPhone. An app on the phone drives off an algorithm determining whether to infuse small amounts of either insulin or glucagon by way of a pump under the skin.

BY CHARL DU PLESSIS

EDGING CLOSER TO THE

WEARABLE TECH & CYBORGS

$6 MILLION MAN

The idea of the bionic human being is a provocative one that has challenged bio-ethicists, religious communities as well as plain-Jane citizens for many decades.

LIFESTYLE

Special Edition in conjunction withTHE DEPARTMENT OF SCIENCE & TECHNOLOGY

61

Feel the Beat You no longer need to step out for an evening of clubbing in order to feel the vibrations of loud music. Try donning the SubPac, a pad and backpack device designed to help you experience the sounds and beat of the music with more than just your ears. It picks up sound from 5MHZ to 130MHZ and transforms it into different kinds of vibrations. Rock on!

Tech Geek Salvation The Intimacy 2.0 is a sensual dress that turns transparent when the wearer gets aroused. Her heartbeat changes the opaque or white panels from which design collective Studio Roosegaarde and Anouk Wipprecht made the dress transparent.

For Mother’s Day Get yourself a pair of FOKI vacuum shoes, and help pick up dirt rather than carrying in more on the base of your feet. You could try going to a club with them next as they have LEDs on the top showing battery life. Funky lights.

The Ring The NFC is the small and hypercool version of what every smartwatch hopes to be. Transmits data. Opens doors. Uses social media. Therein is nothing new. But it is in the gesture that lies the ice factor. You � st-bump your phone. You open your palm and point like a Spidey. Cowabunga dudes.

$6 MILLION MANeach newborn citizen with a data-chip at birth that carries all that is known to humanity since the Renaissance? Or will an evil scienti� c empire turn all humans into protein-producing zombies and baby incubators?

Shall we think twice before we strap on Google Glass, then? What is evident is that since punters tried to cheat casinos with counting devices; since President Gerald Ford in the USA had his mind set on the � rst-of-its-kind Pulsar wristwatch with calculator; and since joggers and physicians alike have managed to create instant-feedback devices, there will be no turning back. The good news is that most devices currently stop just there, namely providing information and feedback, rather than stepping forward with an arti� cial intelligence to replace the full decision-making capacity of the host-human. There are exceptions though, already, such as in extreme health cases involving cardiovascular or diabetic feedback devices that can initiate the necessary next protocols required to save a life. The good news is, then, that we are still in control of our own free will (and the cynic in me wants to write “as they want us to believe”). So, let’s take a quick glimpse at some of the coolest new directions and inventions coming our way.

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MAKE IT

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of tomorrow. Take charge of your destiny and apply for one of our internationally-recognised

diploma or degree qualifications.

Contact us today• POBox77000•NelsonMandelaMetropolitanUniversity•PortElizabeth6031 •E-mail:info@nmmu.ac.za•PortElizabethcampuses:0415041111• GeorgeCampus:0448015111 •Website:www.nmmu.ac.za

We have the vision to see beyond today, to lead you to a brighter tomorrow.

THE NEW INVESTOR

Short-term traders generally use technical analysis where they look at past price movements of stocks to predict future price movements. But price movements from day to day are as changeable as the weather. We all know how often weathermen get their predictions wrong and who knows whether it’s going to be sunny or rainy in � ve days’ time. The weather is unpredictable and so are price movements over the short term.Long-term investing requires an investor to buy a stock and hold it for a long period of time, typically over 10 years. The investment is preceded by thorough fundamental analysis where growth

prospects and future cash � ows are interpreted. These interpretations are not consistently spot-on, but they give a good indication about where the company will be in the future.

Now, who knows if it will be sunny on 15 January 2015? But what a climatologist can tell you is that it will be warmer during January than in August. This is the predictability of the climate. So while these predictions made by long-term investors (and climatologists) might not always be 100% correct, they do offer a good indication about what the future will look like.

Warren Buffett is an advocate of long-term investing and believes that it is the only way to

consistently beat the market. And who can argue with him. Though we should not just take one man’s opinion and sheepishly follow him. But it is not just Buffett – there are thousands out there who back him up and research has proven that long-term investors generally perform better than short-term traders. There are research papers on the web if you want to do your own research.

So, while there are � rm believers in technical analysis out there, wouldn’t it be nice to have a little certainty in your investments in an investment world that is � lled with such uncertainty? I’d rather be a climatologist than a weatherman when setting up a fund.

prospects and future cash � ows are interpreted. consistently beat the market. And who can argue

GOING SHORT OR LONG?

BY JACK NEWBY

There are many styles of investing, but the two that end up on either pole of the spectrum are long-term investing and short-term trading.

2798

MAKE IT

NMMU equips you with the necessary skills, knowledge and opportunities to meet the challenges

of tomorrow. Take charge of your destiny and apply for one of our internationally-recognised

diploma or degree qualifications.

Contact us today• POBox77000•NelsonMandelaMetropolitanUniversity•PortElizabeth6031 •E-mail:info@nmmu.ac.za•PortElizabethcampuses:0415041111• GeorgeCampus:0448015111 •Website:www.nmmu.ac.za

We have the vision to see beyond today, to lead you to a brighter tomorrow.

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ASK THE ELDER

ADVICE

Elder Tree: a genus, Sambucus, of fl owering plants in the family Adoxaceae. Ornamental varieties are grown in gardens for their showy fl owers, fruits and lacy foliage.

Dear Elder,My father’s friend, an attorney who deals with aviation matters, offered me a vac job as an intern. Their set-up is pretty casual and he often takes clients down to Lanseria, around the corner from his Sandton of� ces, where they can go for a � ip in his chopper. On my � rst day, I dressed in expensive chinos, a powder-blue Polo golf shirt and my most expensive leather moccasins. Then, I got sent home to put on socks, by none other than my father’s friend himself. Have you ever heard of moccasins with socks? Michael Bronn

Dear Michael,Old habits die hard, and you would have seen how many colleagues in that of� ce likely still wear suits and ties during the week and only allow themselves casual Fridays. For most people, what you wear re� ects your attitude, so it seems wise to err on the side of the conservative most of the time. If your father’s friend does not know you well, he might have mistaken your being dressed as if ready for a day sipping champagne on a yacht instead of being serious about the work experience he offered you. He has earned the right to dress as he wishes. You might still need to toe the line, so to speak. And as for socks with moccs, it is a no-go. You are correct, but then again, we do not have much of a marina and harbour culture where South Africans would see this style of dress on a regular basis.

The Elder

Elder,My ex has dropped off the face of the earth. She does not touch any of her social media any more, and I cannot reach her on her phone. Clearly, she does not want me to be able to contact her, yet I am absolutely pining to get hold of her and to try and save our relationship. I have messaged all her best friends and they are all ignoring me. What shall I do?Faan Herholdt

Dear Faan,You know that expression that every family has a black sheep and if you do not know who it is, it is you? Well, as much as we can sympathise with your apparent broken heart, you sound very desperate and judging by her reaction, she might have decided “too

desperate.” So, perhaps the problem really sits with you. Why else, in her right mind, do you think anybody would completely try and drop off the earth but to avoid someone like the absolute plague. My advice would be that you should take your losses, and take some serious time out to re� ect on how you might have messed up this relationship. Then, better luck next time.

The Elder

Dear Sir/Madam Elder,We’ve just come back from a trip up the Garden Route. We are a crowd of friends who have known each other on and off for years, with some couples dating and the rest just hanging out together. It has been a bit like my family, but after this trip I feel like I am living with the Adams family for the way they treated me after I would not do the bungee jump with the rest of them. The teasing has not stopped and it has an edge to it, as if I am just not worthy of them for being scared of something like this. Reality is, yes, I was just way too afraid to go even close to the edge. I also � nd it ludicrous that in a country with so many risks (I was hijacked close to campus last year) that people would pay money to risk their lives. How do I get them to stop the teasing?Sarah Ackerman

Dear Sarah,Sorry to hear about your misfortune last year. That incident must have left you quite cautious, one would think. You know, every generation has its own rites of passage and it appears as if yours has found some of it in this adrenaline frenzy with bungee and other extreme sports. Research shows that this can be quite addictive and may require ever-larger rushes to satisfy the need. Some of the more famous base jumpers and wing-suit � yers outright admit to their addiction and that it will likely kill them. So, in my opinion, you are the most rational of all your friends in this instance, for showing a healthy fear for something outright scary. My best suggestion would be that you try and get the major instigator one-on-one and explain the ins and outs of your high-jacking. He or she might have a very different take on your resistance to the bungee and sway the group. Do also allow for the chance that it might only be light-hearted bantering and not necessarily meant to be hurtful.

The Elder

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To: All InvestorsWith about ZAR5.00 billion under management and a good track record, why not invest with us. Invest wisely.

Contact: invest@jmbusha.com www.jmbusha.com

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