Science and Technology: Minister's Budget Vote Speech

Minister of Science and Technology, Ms Naledi Pandor, gave her Budget Vote Speech on the 15 May 2012

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“Innovation for development and socio-economic change”

Honourable Speaker, Members, distinguished guests and friends, I thank you all for joining us for this very important debate. It’s important because science and technology encompasses sectors and opportunities that have vast potential for our nation and our continent. Chairperson, the theme for the 2012 for parliament is the “knowledge economy and development opportunities”. In line with this theme we have chosen the theme “innovation for development and socio-economic change” as the theme for this year’s Budget Vote.

Chairperson, Honourable Members I had hoped that with this budget speech we would be able to inform you of the final site decision on the location of the Square Kilometre Array. We do not have much that is new to report at this time. As Members are aware the bidding countries submitted all the required technical information and we are impatiently awaiting the outcome of what we hope will be a final site consideration meeting on 25 May. We repeat our conviction that Africa is ready to host the Square Kilometre Array (SKA), and express our thanks and admiration to the SKA project team for their hard work and thank all who have given support to South Africa and the Africa bid.

Chairperson/Speaker, Honourable Members, our work gives effect to several key imperatives that will advance socio-economic development in all its dimensions. We are taking action on the following:

• build robust institutions that are world class in research achievement,

• create the human capital development and employment opportunities that excite our young people and give them a full role in shaping a new innovative society,

• establish and support a thriving small and medium size enterprise core that relies on innovators, research institutions and risk takers to create jobs, new products and new processes.

• strengthen productive links between public sector research bodies, industry and the private sector

That, Honourable Members, is the vision we hope to share with you today.

We are pursuing this vision in a context defined by three somewhat contradictory characteristics. First, we are fortunate in having very able world-class researchers in a range of disciplines. Of course we need to expand the number of these researchers and to ensure more women and black people play a full role in research and innovation, but we have a great base on which to build. Second, while in comparison to many developing and emerging economies we devote significant resources to research, development, and innovation, we are not allocating the resources necessary to ensure our ambitious goals of growth and employment are achieved. Third, as Members are aware, government has committed to building a strong research community. However, this commitment is bedevilled by the absence of effective co-ordination and purposeful collaboration within government and in research-performing institutions. We must decisively address co-ordination and purposeful collaboration. Working in silos is destroying our potential.

Before setting out how we are acting to address these and many other challenges let me begin by introducing some important young people to you.

We have in the public gallery

• Olga Mathebula, a BSc graduate in computer science (University of Limpopo) graduated in 2009 and been unemployed since then

• Precious Rabali, a BSc graduate in environmental sciences (University of Venda) graduated in 2010 and who has been unemployed since then

• Daisy Thononda, a BSc graduate in biodiversity and conservation biology (University of Venda) graduated 2009 and honours 2010 who has been unemployed since graduation

• Phuti Meletla, a BSc in Aaricultural management (TUT), graduated 2006 and who has been unemployed since then

• Isaac Phiri, a BSc in computer science (North West Univ.) graduated 2008 and who has been unemployed since then.

These five young graduates, who have been seeking work since graduation, are part of our first cohort of fifty interns who have been accepted into a one-year science and technology graduate internship programme in partnership with Da Vinci Institute and the TT100 companies. These companies have enthusiastically supported our initiative to give young graduates work experience and the opportunity to learn entrepreneurship skills from successful technology companies.

I hope this programme will grow and offer increasing numbers of graduates the opportunity to acquire skills and experience. I am appalled at the talent that is going to waste in our country and remain convinced that increased attention to opportunities for young people will result in a more successful South Africa. I thank Professor Roy Marcus, one of the most enthusiastic of South African patriots who with his team at Da Vinci Institute agreed to make our dream of technology and innovation interns a reality.

We will spend a further R110 million in the next three years on the internship programme drawing on the R9,5 billion economic competitiveness package announced in the February budget. We will allocate R15 million in 2012 and 2013 and expand this to R80 million in 2014/15 financial year.

Chairperson, I turn now to report on progress with the plans I announced in 2011.

I undertook to expand South African National Research Network (SANREN) connections to all universities by December 2011. Despite increased SANREN links we have not achieved our goal with all universities. I have set aside R78 million to extend connection to rural sites including the remaining six higher education institutions that are unconnected. In the last financial year SANREN was extended to 107 institutions, this includes our two major global scientific projects, the Southern African Large Telescope (SALT) and the SKA pathfinder, the MeerKAT.

I announced a commitment to expand the excellent South African Research Chairs Initiative by creating a further 62 chairs. This initiative is a cutting-edge response to the need to attract and retain the best and brightest researchers to South Africa. I am excited that several SADC countries have decided to create a chairs programme and are working with us to build this brains trust in southern Africa. The NRF issued a call for 60 new chairs in 2011 as promised and I am pleased that several are being filled as I speak. I am also excited to announce that our Swiss counterparts have agreed to partner with us in creating two joint SA/Swiss research chairs to give us the sixty two I promised last year making a total of 152. Also as promised the NRF established an additional 25 post doctoral fellowships each worth R180 000 per annum for three years.

Honourable Chairperson and Members, I remain committed to creating a national body on science and technology policy. I had hoped to develop this structure last year, but agreed to await the final report of the Ministerial Committee on Science, Technology, and Innovation Landscape (Nongxa report). I have received the final report and thank Professor Nongxa and all committee members for their hard work. I shall shortly refer the report to Parliament and publish it for public comment. In this financial year we will finalise proposals for a co-ordinating body to assist government in achieving higher levels of success in research development and innovation.

I have extended the existence of the astronomy desk for three years, and appointed Professor Ramesh Bharuthram to head the desk (he is DVC Academic at UWC). The primary role of the desk is to assist us in creating a suitable entity to govern and manage the development of astronomy in South Africa.

I turn now to our plans for this financial year.

The Department of Science and Technology (DST) receives R16.6 billion over the 2012 Medium Term Expenditure Framework (MTEF), of which R4.96 billion is for the 2012/13 financial year. Of the total budget for the 2012/13 financial year R2.6 billion or 53% is allocated to public entities (AISA R33 million, ASSAf R13 million, CSIR R737 million, HSRC R214 million, NRF 1,070 million, SANSA R95 million and TIA R455 million). Of the remainder R1.94 billion is allocated to the DST-directed projects (implemented by institutions that perform research and development) and R397 million to the running costs of the department. The allocations to DST public entities rise from R2.6 billion to R2.9 billion between 2012/13 and 2014/15 at an annual average growth rate of 5%. This is a welcome development.

However, I reiterate our view that South Africa requires a significant increase in science and technology expenditure if we are to meet our national goals. We are alert to the economic crisis confronting all economies, but it is vital to increase support for research if we are to retain the critical edge of an emerging world class research destination.

I am pleased that for the first time since 1994 we now have a ‘spending category’ for science and technology in the Budget Review. It sets out government’s total financial commitment to all science and technology institutions. The proposed allocation is R10,7 billion in 2012/13 which is just over 1% of national expenditure. We hope the inclusion of this category signals the beginning of action to give DST responsibility for administering the provision of resources to all research performing institutions and supporting them to perform their research and innovation obligations.

South Africa is one of a number of emerging economies that have the science and technology base to increase benefits from science and technology. We need to draw on successful emerging economies in the developing world such as China, Brazil, India and Argentina. We will continue to invest in our Science Councils and our universities, and we will expand our investment in Centres of Excellence by adding six new centres of excellence to the eight that have been established since 2004.

Our technology localisation support programme is going to be an important contributor to strengthening SET institutions and industry.This programme has continued its support to the 24 companies in the foundry sector we referred to in 2011. We will be committing a further R45 million over the next three years to build on the successes we have achieved thus far. We are pleased to report that funding provided by Parliament has attracted a further R96 million through a grant from the EU supported Employment Creation Fund.

A further area in which I believe we have enormous economic potential is the fluorspar chemicals sector. We are implementing a fluoro-chemicals development programme targeting human capital development, new business formation and novel processes and products.

A multi-purpose fluorination pilot plant has been completed and will be launched this year. South Africa has an abundant fluorspar reserve and competence in the handling of fluoro-chemical processes and products, we want to convert this strategic advantage to industrial activity and business and job creation. We have secured a commitment of R60 million for the period 2013-2015 from the competitiveness fund announced by the Minister of finance in 2012. This will enable us to increase the number of companies we have on our register by a further 50 companies by the end of this financial year and grow them to 100 by the end of the 2014/15 financial year.

Honourable Members will recall the titanium initiatives that we have previously referred to. Thus far we have invested close to R108 million in this key initiative. Activities include the commercialisation of a novel process for low cost production of titanium powder. Researchers are now able to produce kilogram quantities of titanium powder. The next stage is 2kg /hour production of the powder. This will be achieved through the creation of a titanium powder pilot plant at the CSIR campus in Pretoria. Over the next three years we will make over R100 million available for the titanium initiative. R50 million of this will come from the economic competitiveness fund.

We continue to support human capital development. All the initiatives we support have a robust postgraduate support programme. The research chairs are a major initiative. In 2008 we spent R100 million on the SARCHI programme; in 2012 we will spend R302 million. This is a prestigious programme that recognises and rewards excellence. We are keen to see it grow. I am keen to establish chairs for science policy and science communication. I hope the DST and NRF will consider this in their future plans.

We are excited at the work ASSAF is doing to increase access to journals on-line and to increase the visibility of South African research. The implementation of SciELO (Scientific Electronic Online) SA open access platform has provided free access to SA scholarly journals. 22 journals are on the platform and there are plans to grow to 180 SA journals. Statistics show that the site is visited over 1000 times a day, with over half the visits coming from outside Africa. The South African Journal of Science has had nearly 130,000 articles downloaded since May 2009.

The ASSAF consensus studies have proven to be very important evidence based studies for policy makers. The recent consensus report on the Future of the Humanities in South Africa has signalled the need for action. I agree with ASSAF that more must be done to support renewal in the humanities, and I have asked the department to work with the NRF to develop new and responsive approaches. However, I believe the greatest success and renewal will result from universities restoring the important intellectual status of the humanities in higher education to one of critical importance and not marginalisation. I hope the consensus study and the Sitas report will be catalysts for the renewal of the humanities and that it will be academics leading the charge.

I also welcome the creation of the Young Academy of Sciences of South Africa and look forward to working with the Young Academy to create opportunities for young scientists to collaborate and strengthen their research outputs.

Support for our National Research Facilities, and the provision of equipment for research will be increased - R525 million will be used for our National Research Facilities in 2012, and R125 million for research equipment. I also intend to direct the NRF to pay far greater attention to support for emerging researchers and to consider strategies for supporting women researchers.

Honourable Members ,Chairperson one of the most repeated comments of the Nongxa ministerial committee report was that our sector should strengthen links with industry and the private sector. They also propose an examination of international practice with respect to incentives for private sector research investments. We would like to create conditions that will encourage the private sector to invest its research funds in South Africa.

The existence of the Technology Innovation Agency creates opportunities for us to explore these linkages. The primary role of TIA is to support innovation by publicly funded research institutions. Now that TIA is almost three years old we will be liaising with the board to develop a framework for an early review of this very important agency. I think the DST must assess TIA progress and the experience of stakeholders that have received or sought support from the agency. We will announce the details of the review before the end of July this year.

I was thrilled to announce the Ketlaphela /Lonza initiative earlier this year. We plan to build a plant to manufacture APIs for ARV production. DST, DTI, EDD, and the Health department are collaborating on this initiative. Our intention is to secure a significant proportion of the ARV market for local producers. Our ambitions with respect to the pharmaceutical sector are also focussed on building continent-wide competence in researching and developing products that will respond to treatment for neglected diseases and an Africa-based pharmaceutical sector.

The 2011 launch of the African Network on Drugs and Diagnostics Innovation (ANDI) is an important development in this regard. ANDI is based in Addis Ababa at the ECA offices of the UN. The board has agreed that five regional hubs will be created to support regional research initiatives. South Africa has offered to host the Southern hub. ANDI has evaluated African research initiatives on drugs and diagnostics and has identified 35 centres of excellence throughout Africa that will receive priority attention. Fifteen of the centres are in South Africa. All these centres are researching responses to the most intractable health burdens of the continent from Malaria, TB to River Blindness. Many of the diseases are diseases of the poor and invisible; their researchers do not receive funding nor intellectual support from established agencies. ANDI plans to reverse this.

We are providing support to innovation in quality water provision that is community led and based through various agencies that we work with. We have supported the development and use of new energy efficient and attractive construction materials through the CSIR led infrastructure innovation programme - 410 houses were built in Kleinmond creating an integrated suburb.

We are supporting rural based poverty alleviation initiatives in Limpopo, Eastern Cape and Kwazulu Natal. (I agree with Hon. James that more must and can be done.) I think waste recycling is an immense job creating opportunity. I think young people who have studied maths could be trained to be community based tutors using mobile technology. I believe the first biofuels filling stations should be set up in villages and that greening and food security initiatives should be community based.

The HSRC is doing very useful work in investigating indigenous agricultural responses to the impact of climate change and the Africa Institute of South Africa is collecting useful data on traditional practices in conflict resolution Africa wide in order to craft a guide to peaceful resolution of conflict on the continent. I have agreed with the Africa Institute of South Africa (AISA) that we wish to strengthen our focus on the study of Africa and on creating a dedicated well resourced centre focussed on the study of Africa. I will announce our plans in this regard later this year.

Honourable Members, Chairperson these examples indicate what is possible - they are work being done by many institutions. Our role as DST is to initiate and demonstrate, while departments such as DTI have the resources and reach to ensure large scale implementation of successful innovations.

Two of the areas in which I believe we will achieve world class success are the astronomy sciences and Information Communication Technologies.

Our research capacity in this area is becoming a strong competitive advantage. Over the last 18 months we have announced targeted partnerships with global ICT companies including SAP, Microsoft, and Nokia. These companies have invested over R15 million in kind and cash in our ICT research and development programme in 2011/12. This was matched by DST funds. In this financial year we will provide more funding to leverage increased direct international support for ICT research and innovation. We hope to announce a partnership with IBM and one other multinational firm later this year.

As I indicated earlier, we continue to do our work with respect to our commitment to the SKA. Over R500 million has been allocated to the SKA in this financial year. We were also pleased that the Minister of Finance has agreed to exempt the SKA from VAT should we secure the bid.

Our investments in astronomy have elevated the importance of science and technology in South Africa and Africa. It has allowed South Africa to play an important leadership role in promoting science in Africa. We remain committed to building an African VLBI that connects us to existing networks. We have approached DIRCO and National Treasury to allow us to access R248 million from the African Rennaissance Fund so we begin our planned creation of the VLBI. We are waiting to hear whether we have been successful

A further exciting area of success is in our international linkages. This year’s launch of the South Africa-Germany ‘Year of Science’ signals the strong links we have begun to build across the globe.

We have also continued our support for several continental flagship institutions such as the African Institute for Mathematical Sciences, the Southern African Development Community Biotechnology Network (SANBio) and the African component of the International Centre for Genetic Engineering and Biotechnology.

I plan to announce a revitalised bio-economy strategy this year. I believe we can build a vibrant bio-economy and that in partnership with the private sector and universities we could create hundreds of jobs and viable enterprises. We are exploring the possibility of developing human vaccines in South Africa drawing on the experience of Biovac and other institutions. We have initiated a feasibility study on a Cape based biotech park for health innovation and expect to receive the team’s report in July this year.

We have continued our support to the tuberculosis vaccine initiative and are working with a range of global partners on this world challenge.

Many Honourable Members are aware that our satellite Sumbandila made a sterling contribution to our scientific work. I am pleased that in this MTEF Treasury has provided over R100 million for satellite development. We are working closely with SANSA to develop an implementation blueprint for our next satellite and for our contribution to the African Resource Management Constellation - the Algeria,Kenya, Nigeria, South Africa constellation. We are excited at the opportunities created through securing new investments in a satellite development programme.

I have outlined some of our plans for the coming year. There is a lot of work being done as the Deputy Minister will indicate. I would like to conclude by thanking all the stakeholders who work with the DST, special thanks to the chairs of our boards and councils, and the wonderful individuals who serve on our boards. To the DG and his team and the entire department, I am grateful for your support and hard work. Thank you to the Deputy Minister Hanekom, a true comrade and committed science and technology advocate. The advisors and the ministerial team in my office and deputy minister’s, well done on staying calm in the face of impossible deadlines – thank you to my family for always being there and well done to our soon to be first Phd graduate. None of what we do would be possible without dedicated scientists and stakeholders. I am beholden to you all and to our media colleagues who have supported our SKA bid marvellously.