National System of Innovation: Department of Science and Technology briefing, with Minister

Meeting report

Presentation on the National System of Innovation
The Hon Naledi Pandor, Minister of Science and Technology, noted that the presentation was a summary of the report compiled by a ministerial committee appointed by her.  It sought to assist in developing a full understanding of the National System of Innovation (NSI) and how to improve the spread of knowledge. She emphasised that the process was still very much in progress and continued to take into consideration ways of moving forward following recommendations.  The Ministry was therefore open to contributions from the Parliamentary Committee and public in the future.

Professor Wieland Gevers, Deputy Chairperson of the Ministerial Committee, stated that the full report provided arguments and a substantive basis for up to 41 recommendations, divided up into five sections. The presentation represented only those recommendations that were most important, but the report in its entirety was available for discussion. Also, the Minister had created this committee in 2009 and at one point had called for expert reports on a number of topics. They had been useful in adding to the report, but the Ministerial committee bore full responsibility for the end result.

The purpose of the committee was to review the landscape of science and technology in South Africa, assess the degree of efficiency of resources and readiness for future challenges in the global context.  Phase One encompassed the scrutiny of policy frameworks developed by the Department of Science and Technology (DST) following the external review of the NSI conducted by the Organisation for Economic Cooperation and Development.  Phase 2 focussed on the development of recommendations for the NSI moving forward.  DST achievements to date had been very positive but there remained a lack of understanding in government departments and as a result little cooperation.
The “New Strategic Management Model” developed in 2004 had relied on a high degree of voluntary cooperation across all sectors, but this had not materialised. The National Council on Innovation (NACI) had been relatively ineffective in providing Cabinet with a big picture overview of the innovation landscape, providing information on individual sectors instead. There had therefore not been adequate coherence between government, business, higher education and civil society strategies, and this was symptomatic of little systemic planning.  Professor Gever emphasised that there had been too little focus on the demand for greater innovation and too much focus on the supply of it, or lack thereof.

The first recommendation was therefore to establish a centralised, compact National Council on Research and Innovation, chaired by the Deputy President and deputy chaired by the Minister. Such a body would carry substantial authority and be in an improved position for coordination and oversight. The second recommendation was to establish a unitary research and innovation vote that extended beyond previous attempts at such a body that included the whole system, for example, looking at the funding of higher education.

The report’s third recommendation was for a fully systemic NSI coordinating role to be developed for the DST. Only through collaboration with other departments would the department be able to add substantial value to the nation. The fourth recommendation was for the National Advisory Council on Innovation (NACI) to be transformed into a statutory office that monitored progress, or lack thereof, in various departments and had a role in policy. Fifth, mechanisms facilitating coordination had in the past been lacking, and this could be solved by creating three core nexuses that would open channels of communication, reaching not only to business sectors but also inviting social innovation.
The sixth recommendation was that modes of public grant-making should be extended to include other stakeholders. The government did not need to bear the full burden of funding, as other spheres such as the business sector also had an interest in innovation.  
Seventh, the Science Council should be reviewed and restructured.  Professor Gevers said that although he would not call the current council unfit for purpose, he believed that the purpose of the council itself should be re-evaluated as there was currently the risk of overlaps in research goals and in general the potential for confusion.  The NSI was a deliberately coordinated Government operation and as such it was entitled to a fully enabling environment.  However, there was a perception on the side of business that there was a gap between themselves and Government in terms of decision-making, benefit-sharing and participation.  According to a survey of the innovation system, although it appeared to be high functioning, there remained low patenting and a reduced international impact of business innovation.  In countries such as the USA, innovation was based at universities and research and development (R&D) laboratories, and was often funded by businesses.  In South Africa, however, there remained a knowledge transfer gap whereby much of our development was funded from overseas and therefore not linked to our national economy.  Interaction between all systems, including social development and government departments still left much to be desired.

Recommendation eight was that there should be systematic efforts to bridge the gap between industry and government to strengthen the response to demand between the two spheres, as well as the social sphere. Ninth, effective participation of the private sector should be encouraged at all levels of the system. Tenth, intellectual property regimes needed to enhance accessibility to NSI.  Twelfth, an explicit strategy should be developed for advancement of social innovation. Although current efforts existed, more could be done to increase productivity.

The report noted limited productivity and incentivisation in human capital and infrastructure, including unresolved schooling issues.  Higher education had seen low participation rates and throughput rates, as well as a notable lack of infrastructure.  Professor Gevers also pointed out that national research facilities were often disorganised and uncoordinated.

The thirteenth recommendation stated that in order to meet human resource development requirements for a competitive knowledge economy, a planned, sustained and well-resourced programme of action in all areas of human capital would be necessary. The report strongly advocated looking at what students were required to do in order to become sufficiently skilled citizens. There was a place for the introduction of new Masters degrees and ways of bridging the gap between the qualifications and the skills required for working in the innovation industry.  Professor Gevers also sought to emphasise that proper qualification was without doubt a priority for leading NSI towards a prosperous future in South Africa and that teaching should be declared an essential public service at all levels, not just at higher education.

The fourteenth recommendation was to establish an infrastructure roadmap for South Africa, giving access to the information highway for a broader range of citizens. The fifteenth recommended that a National Advisory Panel on Cyber-Infrastructure should be constituted to aid with this. Progress in improving the functioning of the NSI was currently hampered by the absence of assigned responsibility for ensuring availability, collation and maintenance of STI indicators.

The sixteenth recommendation was that the Office for Research and Innovation Policy should be made into a centralised facility serving as a repository of evaluation information. This enabled transparency and accountability, aiding in the formulation of broad-based strategy.  The increase in expenditure on R&D from 2007-2008 to 2008-2009 was only 1,3%, and human resources had not grown at all.  Incentive schemes were nevertheless investing heavily in innovation projects, but tax benefits were not being taken up quickly enough.  Recommendations 17 through to 19 therefore said that public resourcing should be increased and businesses encouraged to invest in R&D.  Incentive schemes should also be doubled to the same ends. The additional necessary funds would not impact heavily on South Africa’s budget but would bring enormous benefits both to the country’s economy and to the new generation of youths coming through the education system.  
Recommendation 20 was for departments to be encouraged to improve service delivery, including the effective use of expenditure on science and technology. This would be aided by comprehensive expenditure plans.

Minister Pandor added that an internal working committee made up of senior officials had been established to consider the report in far greater detail and to manage public engagement.  The committee would formulate advice and draft a comprehensive implementation plan. She herself aimed to present it to the Cabinet in August.

Discussion
The Chairperson took the opportunity to compliment the Minister and her delegation on the quality and thoroughness of the report.  
Ms M Dunjwa (ANC) asked about the relationship of this committee to the National Planning Committee. She observed that certain areas of the report touched on other areas of government, such as education, and that such mandates would not be achievable unless acted on together.  She commented on the importance of gauging public opinion on the issues in the report, and also inquired as to the cause of the gap between the public sector and private industry, speculating that it was a result of the previous system of education.  She concluded that it would be best to move forward together.

Mr P Smith (IFP) observed that there was an argument to be made that South Africa was wasting time in attempting to move toward a technology-based economy, although he did not believe this to be the case. He also offered congratulations on the report and full-heartedly supported all its recommendations. He asked to what degree these recommendations would be watered down in implementation and queried the level of political will to support the initiative. He raised his suspicions that the transversal nature of the proposals would pose something of a threat to existing organisations and queried to what extent the report had engaged with department heads, such as Education. Similarly, had businesses provided an input into the report?  Finally he observed how large the gap was between regions like Europe and SA in terms of a technological skills set.

Ms J Kloppers-Lourens (DA) drew the committee’s attention to slide 16 of the presentation, which referred to the low level of participation and throughput at higher education institutions, infrastructural weaknesses, and the national research facilities’ system being in disarray.   She noted that while many negatives had been listed, there had been no identifiable positives. In her opinion, basic education was more of a problem than higher education. She asked whether or not school curricula could be revised and adapted for technological sectors. There was also a large gap between passing Matric and qualifying for universities. It was clear that the budget for Science and Technology was insufficient, especially when compared to the DA’s “shadow” budget, which was far more substantial.

The Chairperson said that there had been very little movement towards the technology industry as indicated by the report, especially compared to other developing states, such as South Korea from 1985 to 2005.  South Africa needed to be more active in encouraging students to go into this field.  Also, the lack of confidence business had in government motivation was understandable as privately funded research was often not fully embraced by state departments and ended up going to waste. There was also tension between empowering this industry, and job creation in existing sectors.

Prof. Gevers began his response by noting that the role of the NPC was critical to developing the innovative landscape. Unfortunately, the process of this report and the NPC’s own reporting process had been concurrent, and collaboration had therefore been difficult.  They did not wish to reach joint findings as they had been mandated in a particular way.  Anything the reports had in common would nevertheless carry even greater weight as a result of the independence of the two reports.
The issue of public hearings remained important and the ministerial committee members would be retained until after such hearings were held so as to incorporate the results into the report. The perception held by the private sector regarding the gap between them and Government, had to be looked at in the context of the nine-member committee, only one of whom had roots in business. He was very active in his participation, and surveys had been conducted regarding the current structures. In this way it had become evident that there was a strong belief that current Government efforts were not seen as properly credible. The position was based on a reflection of business, and although there was merely a perception of a gap between business and government, it was a sincerely held perception, and as such might as well be fact.  State innovation was possible and would have an enormous effect on the everyday life of all citizens.

Finally, the engagement with government departments was somewhat complicated, as interviewing had to be as neutral as possible so as not to lead respondents to answer in a certain way.  However, a system of performance monitoring was being observed which extended beyond departmental boundaries, allowing for it being easier to gather views from a small sample group.
The positives of the report were present, especially human capital development.  Centres of Excellence and other such programmes had done particularly well and additional institutes had been created. A National Research Institute was advisable but as with all the existing institutes, would require government involvement in order to be sustainable.  In basic education, there was an ongoing public debate over positives and negatives but it was commonly accepted that there was greater potential that could be brought out of South Africa’s youth. Whatever had been achieved thus far, much more remained to be done.

Dr Phil Mjwara, Director General of the Department of Science and Technology, commented that on the issue of NPC involvement, the Department had already made an input regarding the transversal nature of the programme and a response was being awaited. The report had already been presented to Cabinet and queries over the integration of various Ministries could not yet be answered fully. The Department was still examining options for collaboration and only after the report had been tabled back to Cabinet would the position be clearer.
On public hearings, there would be further engagement in order to strengthen the report and the recommendations.  Dr Mjwara also welcomed greater input regarding business relations,8 and said that the ministerial committee would not be able to prescribe how the parliamentary committee would proceed, but would certainly analyse inputs from public consultation.

The Chairperson concluded by saying that Parliament should also begin conducting public hearings now that the report had been made available.   As this was still a work in progress, Parliament would seek to furnish the committee with developments that arose.
He thanked the delegation for their efforts and congratulated them again on the quality of the report.