The Vulnerable Research and Innovation Base of South Africa

IntroductionSouth Africa is facing structuralinnovations. It can therefore be concluded that
problems in strengthening its research andknowledge resources do not meet the
innovation capacity in order to become andcompetitive needs of South Africa especially in
remain competitive in the global businesshigh technology innovations.Table 2: Sources of
environment. Although greater emphasis is givenCompetitive Technologies
to strengthen Research and Development effortsSource Percentage
in the country and to translate it intoIn-house 57
commercialization of products, South Africa areLocal 24
lagging behind its competitors on four criticalForeign 22Further, whilst South African inventors
domains of:· The level of technologicalsecure around 100 United States patents per
exports;year, this represents only 2.5 patents per million
· Funds invested in Research and Innovationof the population per annum. In comparison Japan
activities;secured 776 patents per million of the population
· Capability to transform relevant scientificper annum (Department of Arts, culture, Science
knowledge and technological inventions intoand Technology, 2002). Conclusion and
commercial applications; andRecommendationsThe results reveal that South
· Sourcing for competitiveAfrica performed poorly and insignificantly low in
technologies.Although it is realised that Souththe export of high, medium and low levels
Africa as a developing country cannot match thetechnologies. The country is therefore poorly
R&D spending of developed countries, thepositioned globally to compete successfully due to
assumption is made that if South Africa can carrya lack in ability to commercialise the results of
out R&I activity levels comparable to that ofR&I in the international markets. This can be
principle trading partners and competitors, it will bepartially be attributed to the fact that not
able to sustain its relative competitiveness in thesufficient funds are allocated for R&D as indicated
world.Complicating the situation further is the factby the gross expenditure on R&D. In order to
that South Africa is considered an innovationsustain its competitive position South Africa needs
environment in which medium to low technologyto follow a three-tier approach. Import the
innovations dominate. Therefore, it is not a strongtechnology it requires to fulfil in its trading needs
competitor for attracting research exports fromby securing access to external sources of
foreign companies. This is due to the fact thattechnology, establish strong links with the global
this priviledge belongs to environments classifiedproduction system and seek co-operation
as at the forefront of research efforts, highagreements with international expertise to ensure
technology oriented, huge market opportunitiestechnology transfer to South Africa.In order to
and dynamic in nature. Typical countries adheringstrengthen the research and SET capacity in
to these requirements include amongst othersSouth Africa, the throughput at university level
China, India, the United States of America,should at least be doubled to come in line with
Hungary and Romania (RTDinfo, 2006).PurposeThedeveloped and developing countries in the
purpose of this article is to describe the vulnerableEuropean union and to contribute significantly to
research and innovation base of South Africa inthe formation of SET human capital and
terms of the three domains mentioned in thetechnological innovations. South Africa has also
introduction.Technology exports of South Africaembarked on a process of embarking on an
as percentage of world exportsAccording toincentive approach that provides funding sources
statistics provided by Kaplan (2005) highto different stages for commercialisation of
technology export of South Africa, 0.3% in 2002,research innovations.Due to the fact that South
as a percentage of global exports representsAfrica is not performing well in the area of
indeed a very small proportion of world exports inpatenting, a better approach could be to focus on
technology. How poor is only conceived whentrademarks, rather than patents based on the
compared to 2002 figures of other Europeanargument that final consumers are less concerned
countries such as Turkey (1.6%), United Kingdomon whether a product has been manufactured
(1.25%), Sweden (13.7%), Switzerland (21.6%),solely on the basis of imported or self-develop
Spain (5.7%), Slovenia (4.9%), Portugal (6.8%),technology that buying the right product that
Norway (4.6%) and the Netherlandswould satisfy their needs. Trademarks better
(18.7%).Sufficiency of funding for R&I in Southaddress the latter component and are focussing
AfricaWhilst the aim of the South Africanmore on the licensing of technology as opposed
Government is to spend at least 1% of its GDPto protecting industrially applicable inventions as in
on R&D this objective has never been reachesthe case of patenting. Whilst patenting is focussing
since 1983 (No survey was done in 1995 andon the supply side of the market to prevent
1999). With a median of 0.76 and currently atcompetitors from copying the innovation,
0.806 GERD:GDP too little emphasis is given totrademarks is focussing on the demand side of
R&D activities. Currently only R10.1 billion (+/-the market by influencing consumers, which
US$1.6 billion) is spend on R&D in comparison to atrademark to buy. South Africa therefore could
2005 GDP of R1 250 billion (+/- US$208.33)benefit to focus on establishing preferred
comparing favourably with levels experienced in atrademarks in the marketplace in order to grow
country lie Portugal. However in comparison withits competitive base in the global world especially
other countries in Europe like Switzerland,in the field of indigenous technology
Sweden, United Kingdom and the Netherlandsapplications.From a global perspective South Africa
which spend two percent and more of their GDPis also performing poorly to attract R&D funds
on R&D, South Africa are lagging far behind.from Transnational Corporations. Funding obtained
Further, of the R10.1 billion available for R&D, onlyis primarily intended for the auto industry. The
13% is spend on the advancement of knowledge,funds invested, represents a very narrow base
whilst the most (60%) is spend on economicon which to build the competitive edge through
development. This indicates that too little isR&I.It can therefore be concluded that South
invested on human factors, which is considered aAfrica founds itself on the periphery of global
critical element for a successful knowledge basedknowledge creation and innovation as well as in
economy. The conclusion is thus that notsourcing for technological innovations. If South
sufficient funds are allotted for R&I activities inAfrica intends to maintain and grow its global
South Africa.Capability of South Africa tocompetitiveness greater emphasis should be given
transform scientific and technological inventionsto:· Increase the budget for Research and
into commercial applicationThe first consideration ininnovation dramatically;
determining the capability of South Africa to· Provide stronger support to universities to
transform R&D activities into commercialengage in knowledge transfer and
application demands an analysis of humancommercialisation of inventions;
resources availability in the scientific community.· Direct the preferred choice of students in
The Department of Arts, Culture, Science andthe direction of science, engineering and
Technology (2002) has made a comparisontechnology education; and
between four countries, South Korea, Malaysia,· Form strong partnerships with international
South Africa and Australia regarding theorganisations known for R&I and with reputable
development of human capital as expressed byscientists in R&I.All this should be done in the
number of researchers per 1000 of the populationrealisation that that the precise returns in R&I
as indicated by Table 1. Although performinginvestments cannot be determined and that the
better than Malaysia on this component, Southreal benefits may only be reaped years
Africa are performing weak on the broadening oflater.BIBLIOGRAPHYADAIR, J. 1990. The challenge
research literacy in the general population. It is aof innovation. Great Britain: Biddles Ltd, Guilford
further disturbing fact that South Africa has anand King's Lynn.Baumol, W.J. 2002. The
aging research workforce. The Department alsoFree-Market Innovation Machine. Princeton
indicated that the number of science, engineeringUniversity Press: Princeton.Bessant, J., Lamming,R.,
and technology (SET) practitioners, will varyNoke, H. & Philips, W. 2005. Managing innovation
between 7 and 11 per 1000 of the population inbeyond the steady state. Technovation. 25:
the years 2002 to 2012 and a university1366-1376.CALOGHIROU,Y., Kastelli, I. &
throughput in SET of only 2.7% to 3% during theTsakanikas, A. 2004. Internal capabilities and
same time frame. The latter figures compareexternal knowledge sources: complements or
extremely unfavourable with SET graduatesubstitutes for innovative performance?,
throughput in some of the European countries likeTechnovation, 24:29-39.Chesbrough H. 2003. Open
the United Kingdom (19.5% - 21.0%), Turkeyinnovation - The new imperative for creating and
(5.2%), Switzerland (7.0% - 7.7%), Swedenprofiting from technology. Boston, Massachusets:
(13.3% - 13.9%), Spain (12% - 12.6%), SloveniaHarvard business school press. (pg110;pg157;read
(8.7% - 9.0%), Portugal (7.4% - 8.2%), Polandchapter 8)Cooke, P. 2005. Regionally asymmetric
(8.3% - 9.0%), Norway (7.7% - 9.3%) and theknowledge capabilities and open innovation:
Netherlands (6.6% - 7.3%) for the sameExploring "Globalisation 2" - A new model of
period.Table 1: Researchers per 1000 of populationindustry organisation. Research Policy. 34:
Researchers per 1000 of Population1128-1149.Department of Arts, Culture, Science
Australia 4.843and Technology. 2002. South Africas National R&D
South Africa 0.71Strategy: The changing face of R&D within South
Malaysia 0.3African public sector research. June. Government
South Korea 2.771Secondly, of the top 700Printers: Pretoria.DTI. 2004. Science &Innovation
firms, by R&D expenditure in the world, only oneinvestment framework 2004-2014. HM Treasury:
namely Sasol is located in South Africa with aNorwich.Kahn, M. & Blankley, W. 2005. The state
US$91 million spending during 2003, whilst moreof research and experimental development:
than 80% of these firms come from only five
countries, spending more than 82.5% of R&D: theAccessed: 24/02/2006.Kaplan, D. 2005.
United States (42.3%), Japan (22.0%), GermanyTechnology and the growth of manufactured
(7.6%), the United Kingdom (5.6%) and Franceexports: Assessing South Africa's performance
(5.0%). The remaining 20% comes from Finlandand policy. Paper presented at DRUID Summer
(0.9%), Sweden (2.1%), Switzerland (2.9%),Conference on Industrial Dynamics, Innovation and
Republic of Korea (1.4%), Taiwan (1.1%), ChinaDevelopment, Elsinore, Denmark, 14-16.06.04Kar.
(0.1%), Bermuda (0.4%), Brazil (0.3%), Croatia2004. Constructing a logical framework. 7 July.
(0.1%) and South Africa (0.1%). Of these firms
more than 50% operates in the high and mediumAccessed: 25/02/06Lechter, M.A. 2001. Protecting
technology environments of informationyour #1 Asset: Creating fortunes from your ideas.
technology, pharmaceuticals, biotechnology andNew York: Warner Books.Lorentzen, J. 2004. The
automotive. In essence Transnational Corporationsnoledge of numbers: S&T, R&D, and Innovation
dominate the global business R&D and in all of thisindicators in South Africa. School of Development
South Africa plays a relative insignificant role inStudies: University of Kwazulu-Natal.McCalman, P.
participation. However, as internationalisation of2005. International diffusion and intellectual
R&D by Transnational Corporations increased,property rights: An empirical analysis. Journal of
South Africa benefited from this approach andInternational Economics. 67:353-372.MRC
the amount of US$67 billion spent in 2002 ofInnovation Centre. 2006. Section H: Funding for
which US$24 million was allotted to South Africa.commercialisation of research.
This benefit however, does not reveal the fact
that other developing countries like China,Accessed: 24/02/06NSTF. 2001. SET Awareness
Singapore, Hong Kong, Malaysia and the Republic- Growth and Innovation Study.
of Korea are the main gainers in the
internationalisation of R&D worldwide (WorldAccessed: 25/02/06RTDinfo. 2006. When R&D
Investment Report, 2005).Sourcing of competitiverelocates. RTDinfo. January. 47:29.Sajeva, M.,
technologies in South AfricaThe history of SouthGatelli, D., Tarantola, S. and Hollanders, H. 2005.
Africa and its political dispensation of Apartheid tillMethodology report on European Innovation
1994 led to international isolation causing theScoreboard 2005. European Trend Chart on
country to adopt an internal innovation approach.Innovation. 1-146.Schneider, P.H. 2005. International
Since 1994 however, the country began totrade, economic growth and intellectual property
participate actively in the global economy and arights: A panel data study of developed and
need exist to source new technologies locally asdeveloping countries. Journal of Development
well as from elsewhere (NSTF, 2001). LorentzenEconomics. 78:529-547.U.S. Patent and Trademark
(2004) provided the following statistics regardingOffice (PTO). 2000. Types of Patents. Technology
to the sourcing of competitive technologies inAssessment and Forecast data base. 1 June.
South Africa over the period 1999-2001 as
indicated by Table 2. According to Lorentzen, theAccessed: 21/02/06UTTERBACK J.M. 1996.
22% foreign sourcing is primarily for radicalMastering the Dynamics of Innovation. Boston,
innovations, whilst local technological sourcingMassachusetts: Harvard business school
happens within the domain of incrementalpress.World Investment Report. 2005.