First Quarter Performance Report

PROGRAMME 5: SOCIO-ECONOMIC INNOVATION PARTNERSHIPS

This Programme enhances the growth and development priorities of government through targeted S&T-based innovation interventions and the development of strategic partnerships with other government departments, industry, research institutions and communities. This programme has the following four Chief Directorates:

• 
  Technology Localisation Beneficiation and Advanced Manufacturing advance strategic medium and long-term sustainable economic growth and sector development priorities as well as government service delivery.
  
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  Sector Innovation and Green Economy provides policy, strategy and direction-setting support for the R&D-led growth of strategic sectors of the economy and to enhance science and technology capacity to support a transition to a green economy.
  
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  Innovation for Inclusive Development supports the experimentation of S&T-based innovations for tackling poverty including the creation of sustainable job and wealth opportunities, building sustainable human settlements, and enhancing the delivery of basic services.
  
• 
  Science and Technology Investment leads and supports the development of indicators and instruments for measuring and monitoring investments in S&T and the performance of the NSI, and ways of strengthening the NSI and innovation policy.
  

Highlights of the Quarter
Innovation for Inclusive Development
In using evidence, knowledge and learning to inform and influence how science and technology may be used to achieve inclusive development, the DST participated in strategic engagements on human capital development for a capable and innovative state.  These engagements included a conversation with the higher education sector in the design and delivery of human settlements postgraduate education.   The DST was also featured in the South African Local Government Association’s innovation publication (in.know.vation) and the publication emphasized the DST-SALGA partnership in programmes to enable and support innovation in local government.  A DST designed and funded an initiative to advance leveraging ICT in agriculture was recognized through an award for relevance and innovation at the national agriculture extension services advisory forum.
In advancing an interdisciplinary approach to addressing development challenges, the DST hosted a seminar on the 14^th of June 2018 on “the water-energy nexus and the application of green technologies”. This seminar was attended by different stakeholders of the national system of innovation including representatives from government, higher education, research institutions and socioeconomic development practitioners.  These discussions were also aligned to respond to the Sustainable Development Goals 6 (water and sanitation) and 7 (affordable and clean energy). Furthermore, drawing on experiences from designing and implementing development cooperation based programmes, the DST participated in a United Nations panel at the Development Cooperation Forum high-level biennial meeting.
Science and Technology Investment
The SADC Regional Report on Investment in Research and Development (R&D)

As part of South Africa’s Chairship of the Southern African Development Community (SADC), the DST led the SADC Regional Expert Group on Science, Technology and Innovation (STI) Indicators in the drafting of the first SADC Regional Report on Investment in Research and Development (R&D). This report tracks the SADC against the R&D investment target of 1% of GDP. The Joint SADC Ministers Meeting on Education and Training and Science, Technology and Innovation (ET-STI) on 18-22 June 2018, Zimbali, Republic of South Africa, noted the draft report and recommended that a final such report be produced by October 2018. Leading to the drafting of report, and as per decisions of SADC ministerial meeting of 2017, the abovementioned expert group was established in April 2018 and a regional STI Indicators Framework adopted. South Africa was elected to chair the expert group for a period of three years. The Framework identifies a minimum set of key indicators that each member country must be able to report on in tracking progress at a regional level.

TABLE : PROGRAMME 5 – SOCIO-ECONOMIC INNOVATION PARTNERSHIPS

Strategic statement: Through knowledge, evidence and learning, to inform and influence how S&T can be used to achieve inclusive development
Annual target : 6 knowledge products on innovation for inclusive development published by 31 March 2019
Performance indicator: Number of knowledge products on innovation for inclusive development published
1^st Quarter target as per APP	1^st Quarter actual output	Status	Reason for variance	Actions taken
1 knowledge product on innovation for inclusive development published between 1 April 2018 and 30 June 2018	1 policy brief (PB) was published on the DST website by 30 June 2018	Achieved	None	None
Annual target : 10 decision-support systems maintained and improved by 31 March 2019
Performance indicator: Number of decision-support interventions introduced and maintained
1^st Quarter target as per APP	1^st Quarter actual output	Status	Reason for variance	Actions taken
Annual work plan approved for at least 2 decision-support systems between 1 April 2018 and 30 June 2018	Work plans were approved for at least 3 decision-support systems	Achieved	Work plans for the financial year were finalized through one process
Annual target: 9 learning interventions (seminars, lectures, learning forums and policy dialog) generated 31 March 2019
Performance indicator: Number of learning interventions (seminars, briefs, policy papers) generated
1^st Quarter target as per APP	1^st Quarter actual output	Status	Reason for variance	Actions taken
1 learning intervention generated between 1 April and 30 June 2018	1 learning intervention was generated between 1 April and 30 June 2018	Achieved	None	None
Strategic statement: To identify, grow and sustain niche high-potential STI capabilities for sustainable development and the greening of society and the economy
Annual target: 90 unique honours, master’s and doctoral students fully funded or co-funded in designated niche areas that support the green economy and sustainable development by 31 March 2019
Performance indicator: Number of unique honours, master’s and doctoral students fully funded or co-funded in designated niche areas
1^st Quarter target as per APP	1^st Quarter actual output	Status	Reason for variance	Actions taken
50 unique honours, masters and doctoral students fully funded or co-funded between 1 April 2018 and 30 June 2018	52 unique honours, masters and doctoral students were fully funded or co-funded between 1 April 2018 and 30 June 2018	Achieved	At the time of finalising the performance targets in February the decision on the split of the SIF and IIP students between SO2 and SO3 had not been finalised. Thus, we did not have an indication of the students to be funded in the current financial year. Due to this reason, we are now supporting more students than we had projected at the time of finalising the APP.	None
Annual target: 4 knowledge and innovation products (for example, patents, prototypes, demonstrators, methodologies, and technology transfer packages) added to the sustainable development IP portfolio between 1 April 2018 and 31 March 2019
Performance indicator: Number of knowledge and innovation products (for example, patents, prototypes, technology demonstrators, methodologies, and technology transfer packages) added to the sustainable development IP portfolio
1^st Quarter target as per APP	1^st Quarter actual output	Status	Reason for variance	Actions taken
No target	No target due	No target due	None	None
Strategic statement: To identify, grow and sustain niche high-potential STI capabilities that- improve the competitiveness of existing industries with growth potential in aerospace, advanced manufacturing, chemicals, advanced metals, mining, ICTs, industry innovation programme (include sector innovation funds); and facilitate the development of R&D-led new targeted industries
Annual target: 242 master’s and doctoral students fully funded or co-funded in designated niche areas (advanced manufacturing, aerospace, chemicals, mining, advanced metals, ICTs, Industry Innovation Programme and the sector innovation fund) by 31 March 2019
Performance indicator: Number of high-level research graduates (master’s and doctoral students) fully funded or co-funded in designated niche areas (advanced manufacturing, aerospace, chemicals, mining, advanced metals, ICTs, Industry Innovation Programme and the sector innovation fund)
1^st Quarter target as per APP	1^st Quarter actual output	Status	Reason for variance	Actions taken
200 masters and doctoral students fully funded or co-funded in designated niche areas (advanced manufacturing, aerospace, chemicals, mining, advanced metals, ICTs, Industry Innovation Programme and the sector innovation fund)	173 master’s and doctoral students fully funded or co-funded in designated niche areas (advanced manufacturing, aerospace, chemicals, mining, advanced metals, ICTs and SIFs)	Not Achieved	The number of 33 students funded are still being validated.	The Department has requested the implementation agency to provide validated data before 31 October 2018.
Annual target: 126 interns fully funded or co-funded in R&D related to design, manufacturing and product development by 31 March 2019
Performance indicator: Number of interns fully funded or co-funded in R&D related to design, manufacturing and product development
1^st Quarter target as per APP	1^st Quarter actual output	Status	Reason for variance	Actions taken
126 interns fully funded or co-funded in R&D related to design, manufacturing and product development	130 interns fully funded or co-funded in R&D related to design, manufacturing and product development	Achieved	The co-funded students cannot be predicted ahead due to unavailability of the firms/entities involved in providing work experience to the learners	None
Annual target: 26 knowledge and innovation products (for example, patents, prototypes, technology demonstrators or technology transfer packages) added to the industrial development IP portfolio by 31 March 2019
Performance indicator: Number of knowledge and innovation products added to the IP portfolio through fully funded or co-funded research initiatives
1^st Quarter target as per APP	1^st Quarter actual output	Status	Reason for variance	Actions taken
At least 1 knowledge or innovation product added to the industrial development IP portfolio between 1 April 2018 and 30 June 2018	Zero (0)	Not Achieved	In the process of improving declaring, listing and registering the IP products	Continue to improve the validation and the monitoring of the reported IP products
Annual target: 9 instruments funded in support of increased localisation, competitiveness and R&D-led industry development by 31 March 2019
Performance indicator: Number of instruments funded in support of increased localisation, competitiveness and R&D-led industry development in aerospace, advanced manufacturing, chemicals, mining, advanced metals and ICTs
1^st Quarter target as per APP	1^st Quarter actual output	Status	Reason for variance	Actions taken
Annual work plans or contract approved for 6 support instruments	Annual work plans or contract approved for 8 support instruments	Achieved	The overachievement is due to annual work plans or contracts being multiyear contracts resulting in them still being valid in Q1 of the financial year	None
Strategic statement: To strengthen provincial and rural innovation and production systems through analysis and catalytic interventions
Annual target: 8 innovation-support interventions funded or co-funded that strengthen provincial or rural innovation systems by 31 March 2019
Performance indicator: Number of innovation-support interventions funded or co-funded that strengthen provincial or rural innovation systems
1^st Quarter target as per APP	1^st Quarter actual output	Status	Reason for variance	Actions taken
Annual work plan approved for at least 3 innovation support interventions between 1 April 2018 and 30 June 2018	Work plans for 3 interventions to support rural innovation systems were finalised and approved between 1 April 2018 and 30 June 2018	Achieved	None	None
Strategic statement: To enhance understanding and analysis that support improvements in the functioning and performance of the NSI
Annual target: 6 statistical reports and policy briefs approved by Exco for publication and/or submitted to Cabinet between 1 April 2018 and 31 March 2019
Performance indicator: Number statistical reports and policy briefs approved by Exco for publication and/ or submission to Cabinet
1^st Quarter target as per APP	1^st Quarter actual output	Status	Reason for variance	Actions taken
No target	No target due	No target due	None	None
Strategic statement: To introduce and manage interventions and incentive programmes that increase the level of private sector investment in scientific or technological R&D
Annual target: Preapproval decisions provided within 90 days from date of receipt on 80% of applications for the R&D tax incentive received between 1 January 2018 And 31 December 2018
Performance indicator: Turnaround time for providing preapproval decisions on applications for the R&D tax incentive
1^st Quarter target as per APP	1^st Quarter actual output	Status	Reason for variance	Actions taken
Preapproval decisions provided within 90 days on 80% of applications received between 1 January 2018 and 31 March 2018	Of the 45 applications received between 1 January 2018 and 31 March 2018, 10 (or 22%) received decisions within 90 days. In total, of the 45 applications received between 1 January 2018 and 31 March 2018, 30 (66%) were adjudicated and 14 (31%) received preapproval decisions.	Not Achieved	Available capacity was used to clear the pre-2018 applications. Briefings were required for the Minister on the R&D tax incentive processes	66 applications were provided with decisions during Quarter 1 of 2018/19, and of that number, 52 were pre-2018 applications. Briefings were completed for the Minister on the R&D tax incentive processes

3. FINANCIAL PERSPECTIVE

1. 
   Voted funds:
   

1. 
   The budget for 2018/19 financial year
   

The adjusted budget of the DST in the 2018/19 financial year is R7.790 billion – of which 92.1% is allocated as transfer payments and 7.9% to administrative activities of the Department. Figure 3 below analyses the distribution of allocations among the programmes.
Figure : DST budget split among the five Programmes

The bulk (93.3%) of the DST budget is allocated to three core Programmes of the Department (i.e. Programmes 2, 4 and 5). Programme 3 commands 1.8% of the total adjusted budget. The division according to the major items is detailed in Table 6 below.

Table : DST MAJOR ITEM CATEGORIES

As depicted in Table 6 above and Figure 4 below, the cost driver of the DST is transfer payments. 92.1% of the DST budget is paid out as transfer payments to public institutions and other DST policy implementing partners. 38.1% of the transfer payments are paid out as parliamentary grants to six DST-managed public institutions – namely: the Academy of Science of South Africa (ASSAf), the Council for Scientific and Industrial Research (CSIR), the Human Sciences Research Council (HSRC), the National Research Foundation (NRF), the South African National Space Agency (SANSA) and the Technology Innovation Agency (TIA). The remaining 61.9% is payments for various projects which are managed through contracts.

Figure : Distribution of DST budget among the four major item categories

(expressed in R'000)

Expenditure

4. 
   Expenditure
   

The DST projected to spend R1, 777 billion or 22.8% of its total adjusted budget by the end of the first quarter of the 2018/19 financial year. However R2, 120 billion or 27.2% was spent for the period under review, resulting in a deviation of R342, 6 million or 19.3 % of the projected expenditure as shown in Figure 5 below.

Figure : DST First quarter financial performance (including parliamentary grants)
R 'thousands

Another analysis was made on the same variables shown above, but this time the analysis excluded the parliamentary grants – allocations to ASSAf, CSIR, HSRC, NRF, TIA and SANSA. According to the aforesaid analysis the DST spent R1, 345 billion or 26.6% of the total budget up to the end of the first quarter of 2018/19 financial year, against the projected expenditure of R1, 003 billion or 19.8% of its total budget excluding the parliamentary grants. That resulted in a variance amounts to R342.6 million or 34.2% of the projected expenditure. The details are depicted in Figure 6 below.

Figure : DST First quarter financial performance (excluding parliamentary grants)

R 'thousands

Figure 7 below illustrates the year-on-year comparison of the first quarter’s financial performance for 2018/19 and 2017/18 financial years. The deviation in the 2018/19 financial year is 52.8 percentage points lower than that of the 2017/18 financial year.

Figure : Year-on-year financial performance analysis (2018/19 and 2017/18)

R’thousands

Figure 8 below gives a further breakdown of the first quarter expenditure per Programme. According to the analysis below, programmes recorded deviations as follows: Administration 27%; Technology Innovation 34.5%; International Cooperation and Resources 21.7%; Research Development and Support 58.5% and Socio-Economic Innovation Partnerships 15.9%.

Figure : Financial performance per Programme (including parliamentary grants)

Figure 9 below gives a further breakdown of the first quarter expenditure per Programme excluding parliamentary grants. The deviations from the projected expenditure range between 78.2% and 85.3%.

Figure : Financial performance per Programme (excluding parliamentary grants)

R’ thousands
Donor funding

The actual spending on donor funding amounts to R 14 188 505 for the period ending 30 June 2018. The report on donor funding focuses only on projects for which funds were requested and/or expended. An overspending of 313 000 is for payment of salaries it will reverse once the salary request is done. A breakdown of donor funding is given below.

Table : Analysis of financial performance – Donor funding

Donor	Project Name	Programme	Funds Requested	Actual spending as at 30 June 2018		Balance
				Amount	%
European Union	CAAST-Net Plus	International Cooperation & Resources	-	198	-	-198
European Union	EASASTAP Plus	International Cooperation & Resources	-	115	-	-115
Finland	Biofisa II	Technology Innovation	14 176	14 176	100%	-
TOTAL			14 176	14 489	102%	-313

APPROVAL

This is to confirm that the Executive Committee (EXCO) of the Department of Science and Technology discussed the Department's performance report for the first quarter of the 2018/19 financial year at its meeting held on the…10^th… of September 2018 and that Exco made inputs on the contents of the report which reflects the DST's performance for the period covered in the report.

……………………………………………

PHIL MJWARA

DIRECTOR-GENERAL

DATE: