SA R&D expenditure not yet on target

3rd December 2014 By: Natasha Odendaal - Creamer Media Senior Deputy Editor

SA R&D expenditure not yet on target

Science and Technology Minister Naledi Pandor
Photo by: Duane Daws

While South Africa improved its spending on research and development (R&D) during 2012/13 and halted the “worrying” contractions experienced in 2009/10 and 2010/11, the nation had failed to achieve its years-long target of spending 1% of gross domestic product (GDP) on R&D.

With the release of the 2014-2019 Medium-Term Strategic Framework in October, it had emerged that the Department of Science and Technology (DST) now planned to increase gross domestic expenditure on research and development (GERD) as a percentage of GDP to 1.5% by 2019.

The latest national survey on research and experimental development, which was undertaken by the Centre for Science, Technology and Innovation Indicators, showed South Africa spending R23.87-billion on R&D during 2012/13, which, while a 7.5% hike on the R22.2-billion spent in 2011/12, remained at the same level of spend to GDP as over the past three consecutive years – at 0.76%.

The results of the 2012/13 National Survey of Research and Experimental Development showed that South Africa’s R&D spend came the closest to reaching 1% of GDP – at a peak of 0.95% - in 2006/07, when R16.5-billion was invested into the sector.

However, despite this, Science and Technology Minister Naledi Pandor was “excited” about the outcomes of the GERD during the year as it marked the second consecutive year of an increase in R&D after a two-year contraction saw R&D spend fall to R20.9-billion and R20.2-billion in 2009/10 and 2010/11 respectively.

“If South Africa wants to be globally competitive and align with international trends, we have to invest much more,” she told journalists in Pretoria on Wednesday.

“To achieve this, three progressive phases and scenarios, under which the contribution of R&D and innovation are expected to grow in importance over time, have been identified and are being used to inform the review and align current strategies,” Pandor noted.

The scenarios, in simple terms, layed out what needed to be done to reach an R&D expenditure ratio of 1.5% to GDP.

Intergovernmental engagement between the DST, National Treasury, the Department of Trade and Industry and the Department of Economic Development, besides others, were under way to determine how the scenarios could be brought to life.

The DST and National Treasury were currently formalising a task team to “concretise” the mapped-out scenarios, which were deemed the building blocks for the coveted levels of growth.

One of the “most exciting” features of the survey was that there had been an overall increase in the number of total R&D personnel in South Africa.

The growing headcount, driven largely by the increase in the number of researchers in the higher education sector, jumped 9.3% to 64 917 in 2012/13.

The higher education sector, which also emerged as one of the fastest-growing contributors of the year’s R&D spend, contributed 37.7% to the personnel increase.

“So we have many more clever people working in South Africa [than in previous years]. This is very exciting,” Pandor quipped.

In 2012/13, researchers accounted for 66% of the total headcount, while the ratio of full-time equivalent researchers for every 1 000 employed remained between 1.4 and 1.5 since 2005/06.

Meanwhile, government was pleased that it maintained its position as the largest funder during the year under review, accounting for 45.4% of the total investment, while the business sector, contributing about 38.3% of all R&D undertaken during the year under review, remained the largest contributor.

R&D funding from government increased 13.3% from R9.56-billion in 2011/12 to R10.83-billion in 2012/13.

The 2012/13 survey results showed that the higher education sector was the biggest recipient of government funded R&D activities, receiving 49.8%, some R5.4-billion, of the total government spend.

Business-sector spending on R&D reached R9.15-billion, the bulk of which (91.8%) was spent in the business sector.

Foreign investment into R&D in South Africa decreased 6.4% to R3-billion.

While higher education emerged as the second-largest R&D spender during the year, with a total in excess of R7-billion, experimental development R&D continued its declined that started in 2008.

R&D spending on medical and health sciences had overtaken the spending in the once-booming engineering sciences – a trend that was expected to continue.

However, Pandor voiced concern that, for the second consecutive year, R&D expenditure in the financial intermediation, real estate and business services sectors, together amounting to R3.9-billion, outpaced that of the R3.4-billion dispatched into innovation within the manufacturing sector, the growth of which was a key governmental priority to ensure job creation in South Africa.