Report on Proceedings of the Second hesa biennial Research and Innovation Conference

4.2 The National Development Plan and the national system for innovation

Prof Michael Kahn, Independent Consultant and Professor Extraordinaire, University of Stellenbosch

Prof Michael Kahn, Independent Consultant and Professor Extraordinaire, University of Stellenbosch

SOUTH Africa is experiencing three crises, namely poverty, growth and the environment, all of which are further exacerbated by the presence of three distinct economies. We have done better in some areas than others, being able to compete internationally in some areas of business.
Over the past 40 years, the two biggest employers in South Africa, agriculture and mining, have virtually collapsed. The New Development Plan targeted these areas as due for a turnaround. South Africa is mainly a services economy, having showed the strongest growth in this area over the past 40 years, followed by manufacturing, mining and agriculture. There are very few people in business, law and accounting with PhDs.
In terms of the Global Competitiveness Index, South Africa is 9th in the world in terms of financial market development. In accounting and auditing, South Africa is in the top three.

In the period 1963 to 1987, Korea has been awarded 343 USPTO patents, while South Africa was granted 1 744 patents. South Africa was on the edge of catching up with the advanced countries in the world. In the period 1987 to 2008, Korea registered 57 625 patents, while South Africa registered only 2 232. Until we change what we do, we should no longer use patents as a target. If a country exports high-tech products, it makes economic sense to focus on patents. In enhancing competitiveness in the platinum group mining cluster, for example, it would be necessary to grow manufacturing capacity.

Korea grew its manufacturing capacity through an inherited focus on education. Education is highly venerated in Korea, which is something we should emulate. It also had strong agreements between industry and the state, which we also do not have in South Africa. The National Planning Commission is advocating that this relationship should be fostered and enhanced. As a country, we should not fixate too much on how we interpret numbers, focusing too much on the ratio of gross domestic product to research and development spend. The number of active, fulltime researchers in SA has not grown since 2002, which is a concern. There has been good transformation in research capacity in the state sector, although this has not occurred in the university sector because institutions cannot compete in paying comparable salaries. The national target for the production of doctoral graduates by 2014 is 1 350 per annum.
Under apartheid there was a developmental state, focused on a minority grouping. In 1980, this situation changed, when a lean state model was developed and a number of state-owned enterprises were sold off. The New Growth Plan proposes a new developmental state, which is classified as one that has the goals of industrialisation, economic growth and expansion of human capabilities in mind.
The New Growth Path is essentially a workers’ utopia, where the competition commission will level the playing field. Industrial strategy tries to be all things to all people, lacking focus, and having a weak understanding of innovation. The Green Paper on Post-School Education and Training (PSET) is supply driven, with a weak understanding of innovation where inclusion is the main object. The Ten-Year Innovation Plan has done extremely well.
• To revitalise postgraduate training, we must raise investment levels, hire and retain the best staff and hunt for this talent locally and globally.

• Enhancing higher education pivots on well-functioning schools that provide quality education in science, maths and technology in a well-rounded curriculum. To achieve this, we should re-establish the Dinaledi Schools.

• The overarching project must be the war on poverty in all its manifestations, being the major crisis of the day.

• We should focus on building the capital goods sector, which may mean that we could build and sell goods to other countries.

• We should focus on food and water security.

• We should also establish a Presidential Council on Science and Innovation, which should bring together business, labour and government to work out demand so that the thinking moves beyond the supply side.

Higher education should celebrate SARCHi, centres of excellence, and ESASTAP. It should also celebrate and insist on openness, and re-think the meaning of the majority classroom. Globally, South Africa is probably the country with the highest proportion of working class kids in higher education, but we have to investigate the impact of social class. Universities should focus on their core competences: “The most important impacts of higher education are of an indirect nature, such as through the supply of highly educated and skilled personnel.” (Fagerberg).
South Africa has to be careful in terms of its participation in the BRICS club. There have been changes in the geo-politics that have to be borne in mind. “Research cannot be dictated and organised from above, it must grow within the organisation.” (Meiring Naudé). Has this view of science and research and development changed, or is this ‘70s outlook still relevant?

4.3 Discussion
Question, (delegate): What are the functional boundaries of the research and development system? Could you also comment on IP?
Comment (Prof Nelson Ijumba): What is the strategy in terms of the 2030 goals with regard to PhDs? What will the DHET do in terms of funding to meet these objectives? There seems to be a notion about the decline of the humanities and the social sciences, yet if one looks at technology-based issues, they all have a social and human component. The time is gone when the classical conceptualisation of the humanities and social issues operated in a specific paradigm.
Reponse (Prof Michael Kahn): There are a number of issues around IP, such as the huge regulatory burden through the publicly funded R&D Act. It is unclear how this act will impact on IP. There are very few Technology Transfer Offices (TTOs) that have been able to generate income. It is an unproven innovation. The department has introduced most of the policy instruments that one would expect to find in an industrialised economy, but we’re not certain yet how they will work. The data on royalties displays a larger outflow and a smaller inflow, which would have to be carefully studied – it is not certain whether it is a problem in terms of declaration or actual income.
Innovation policy is a cross-cutter. If one part of government impedes innovation, the entire system will suffer, much like a convoy. There has to be consistency in government. If you are unable to generate enough people in your own education system, you can either do nothing or import people in a vigorous manner. The functional boundaries are therefore the whole of government, and it has to extend to provincial and local government levels.
Comment (Mr Chief Mabizela): Responding to the target of PhD targets for 2014, this was indeed an incorrect figure and the number was revised. In terms of the DHET’s funding strategy, the challenge is that government is juggling a whole lot of balls – the NDP, the Green Paper and the Funding Review – all of which aim to address funding. The Green Paper has stated that some corrective measures would have to be taken. In putting corrective measures in place, it would be necessary to think about differentiation since different imperatives would be funded differently. Institutional mission statements would differ, even though the funding would endeavour to address these differences in a consistent manner. Hopefully towards the end of 2012 a funding statement would be issued. It is foreseen that the Funding Review would be finalised by October.
Comment (Prof Stephanie Burton, UP): We are all waiting with bated breath for the Funding Framework. We had a dramatic change in the funding formula for this year, and very little comment was made on that. Is this going to be a continuing trend? We also hear a lot about internationalisation and we hear that we could gain some advantage from it – you mentioned some negative aspects. How can we use internationalisation to our advantage?
Comment (Prof Gansen Pillay, NRF): It appears that the way the system is designed favours numbers rather than quality. Are we favouring mediocrity where numbers rather than impact factors are important? We seem to be in denial about the time taken to complete a masters and a PhD degree, yet we won’t change the period allowed to complete and the funding provided.
Comment (Prof Mvuyo Tom, UFH): If one reduces everything that happens to politics, then we seek political solutions for all problems.
Question (Prof Peter Mbati, University of Venda): As mentioned, the ratio of staff with PhDs as well as infrastructure and equipment are all important in achieving good research results. One thing that we need to focus on is the issue of the lecturer-student ratios; we often have a woeful shortage of staff to do what is necessary in terms of teaching and learning, leaving little time for research. How does the DHET envisage addressing this issue to improve our postgraduate through-put rates?
Response (Mr Chief Mabizela): I can confirm that the funding formula underwent a drastic change. There is a limited portion of the funding formula that the minister can change in any one year; the remainder would rely on the funding formula to be changed through a policy change. In terms of whether this is a trend, I would say you could expect to see a similar occurrence when the next Ministerial Statement is issued.
The Deputy Vice-Chancellors (DVCs) Research have mentioned the issues you mentioned about quantity versus quality, and the matter will be revisited in greater detail at a later stage. There is a trend internationally to look at the impact of research publications, which has not been a consideration until about four to five years ago. The DHET has not started to investigate these issues, but we are feeling the pressure every time we have a meeting with the institutions. It is also not an issue without controversy, and we have to be cautiously aware of what happened in other countries.
In respect of the time taken to graduate and funding for PhD students, the HSRC did a study looking at dropout rates across the system. There were many factors that featured in this discussion, but in SA poverty is the most pressing issue. Students do register or enrol for a degree and may take longer to complete, not only because of their level of preparedness, but also because of competing needs. At masters and PhD level most of our students are also studying part-time.
In terms of research output at Historically Disadvantaged Institutions (HDIs), I can only reiterate that the policy documents are still under review at the moment. We have to address the missions of institutions when we determine the funding that we provide. If we fund research, in which areas are we funding it? Should we give an institution a particular mandate and particular targets in terms of staff qualifications?
Comment (Prof Michael Kahn): I am all for internationalisation, but I caution that government should not impose onerous restrictions on our ability to recruit staff should we need them. Look at Brazil, with the Science without Borders programme. Mobility is everything, and is the lifeblood of a university. That is why I think the DST’s programme is such a great achievement. Politics is both everything and nothing; if technology does not reach people, it can be due to a variety of reasons.
Something more to think about – social sciences and humanities research is not under-funded in South Africa when you compare it to other countries.

4.4 Business priorities and initiatives

– Mr Saki Macozoma, President, Business Leadership South Africa (BLSA)

Mr Saki Macozoma, President: Business Leadership South Africa (BLSA)

THERE are as many views on research and innovation as there are businesses in the country. It is clear that there is a need for business to interact with the higher education sector in a more organised manner, and for dialogue within the business community itself.

Given the global financial and economic crisis, the cash flows of many businesses were affected negatively. There were also a number of government imperatives that affected business adversely, meaning that businesses were not able to sit out the crisis and wait for the next upswing. Many businesses had to adapt their operations drastically, which has meant that corporations have tended to be concerned with survival instead of issues of national importance. Human and financial resources were diverted to other areas to remain competitive.

It is interesting to look at the agenda of the World Economic Forum in Davos as a gauge of the business mood. Some emerging themes from that agenda have been carried over to other areas. The first issue is how innovation is defined, and where South Africa is placed in the typology for development. Innovation, as defined by the OECD, makes provision for societal challenges also to be addressed.
The point is relevant because the thrust and impact of innovation is challenged in South Africa, presenting a neo-liberal approach to life. The Higher Education Summit in 2010 addressed the commercialisation of knowledge which creates a value system based on the commodification of research. This view is completely opposite to the one viewed by the corporate world. Businesses have to demonstrate a commercial rationale for spending financial resources. Investment in research and development is an expression of belief in future benefits, which is a demonstration of future stewardship.
The economies of the world are divided into three different levels, among them the efficiency-driven model into which South Africa has been classified. It is necessary to move from this category to the developed category. If we are going to do this, we need greater innovation. We should understand where we are, and what we should do to develop. One of the post-global financial crisis insights is that the survival of humanity depends on collective action to reverse our actions that put the world at risk. This change is captured in the group Skills for Biodiversity’s document in which they identified four key knowledge challenges aimed at enhancing sustainability.
They identified the need to innovate, to think about science for sustainability and the human and social sciences, among others. These priorities coincide with those that are emerging internationally such as using less water; doing more with less; preparing for rapid change and extreme events; and minimising and mitigating risks. Another important issue is food security.
It is necessary to think about how these emerging issues should be researched and innovations generated so that they are also commercially viable. It would be necessary to find ways for venture capitalists and intellectuals to invest their money and time in these emerging issues. Direct government subsidies have not worked; financing green growth requires market-based incentives.
These emerging priorities are not less important than the building blocks of the so-called knowledge economy identified since 1994; the fact of the matter is that these issues are not mutually exclusive. They offer an opportunity to deal with a niggling sensitivity in higher education, i.e., the reach of the research Rand. Ways have to be found to distribute research funding differently.
Lastly, governance in higher education institutions has to be dealt with in a politically brave manner. If the towns of Alice, Mahikeng or Mthatha are not working properly, it is going to be difficult to attract the talent required at the universities housed in these towns. It is up to the citizens of the country to make these places conducive to academic endeavour.


4.5 Summary of key issues

Dr Steven Lennon, Group Executive, Eskom

Dr Steve Lennon, Group Executive, ESKOM Holdings (SOC) Ltd

DR Lennon provided both a summation of the key issues that emerged from the presentations and discussions on Day 1 and an identification of possible issues that may need to be addressed on day 2 and beyond. These issues are discussed per theme.
Stream 1: Creating an enabling policy environment for the flourishing of research and innovation in the sector:

From the discussions it appears that -

1. 
   We still have a fragmented research and innovation system;
   
2. 
   This is compounded by the multiplicity of state funding – DHET, DST, DoE, DMR, DEA, etc;
   
3. 
   There is a little evidence of alignment across state departments;
   
4. 
   While some progress has been made in addressing race and gender imbalances, the skilled workforce is ageing;
   
5. 
   There appears to be a dislocation between NSI and development needs of society and economy;
   
6. 
   Some priorities for the research and innovation system include a focus on jobs, infrastructure, manufacturing, and the green economy;
   
7. 
   Enabling and establishing a high quality differentiated system is taking too long to take shape;
   
8. 
   We have many priorities in HE, including building a quality teaching, academic, research and public cadre;
   
9. 
   Who should decide on the national research agenda? The universities should have the freedom to focus on their own priorities. Should institutions try and be everything to everyone? What impact will the funding formula have?
   
10. 
    The system seems to need effective advisory functions with strong links to implementation processes;
    
11. 
    Innovation is constrained by a dysfunctional society. Society must function for innovation to thrive; and
    
12. 
    Current policy research may be inadequate to serve our needs. We need a mechanism pulling together the national system of innovation strategy and alignment across the different state departments. Such a body could fulfil the same role as the National Planning Commission and report to Cabinet. There should also be alignment of implementation, which could be achieved through a dedicated delivery unit.
    

Stream 2: Strengthening multi-sectoral collaboration:

In respect of multi-sectoral collaboration it is evident that -

1. 
   The rules of the game have changed for the private sector. A high-risk environment has forced a survival and compliance approach;
   
2. 
   The triple-helix partnership model needs to change, incorporating universities, government, industry and communities. The question is how to engage and reach out to communities;
   
3. 
   We need to seek win-win partnerships throughout the value chain and life cycle of the development of people;
   
4. 
   What role can the private higher education sector play in respect of research and innovation? Is there a need for more partnerships?
   
5. 
   We should build on the successes - some great success stories were noted, such as SARCHi and other flagship projects;
   
6. 
   We need industrial support for commercial research – but not too much;
   
7. 
   We also need mechanisms or incentives to increase industrial support for research chairs;
   
8. 
   Long-term programmes have to be conceptualised, coupled with having the courage to stay the course; and
   
9. 
   Is there a decline or domination of humanities? Neither, we need to get rid of the paradigms and rather focus on collaboration across sectors and disciplines.
   

Stream 3: Internationalisation of SAHE Research and Innovation Agenda:

Some forward-thinking strategies for research and innovation in South Africa include -

1. 
   We need innovation for competitiveness – converted into tangible value;
   
2. 
   What development model should apply to SA? We should not just copy historical development models;
   
3. 
   Who should we copy, emulate or aspire to be?
   
4. 
   There is a need for strategic thinking for global positioning;
   
5. 
   The flagship projects and programmes, e.g., SKA, centres of excellence in South African innovation and competitiveness could play an important role in the internationalisation of our research;
   
6. 
   Regional networks, e.g., SADC should be strengthened;
   
7. 
   We should make the most of relationships – international agreements and programmes, e.g., BRICS, ICSU, IGBP, and IPCC (presenting massive opportunities for Green Innovation, most notably in water management and energy generation); and
   
8. 
   We should establish opportunities to use foreign students to reinforce SA skills base.
   

Stream 4: Innovation for development

Some thoughts on innovation for sustainable development include -

1. 
   Innovation should focus on sustainable development;
   
2. 
   The question is how to engage society on innovation through open innovation models?
   
3. 
   Innovation promotion should take place in society as a whole, and in the formal and informal sectors;
   
4. 
   The question is how to ensure the replication of social innovation models at scale;
   
5. 
   What is the role of innovation in achieving Vision 2030?
   
6. 
   The mainstreaming innovation into economy and society should be a key focus;
   
7. 
   We need effective and efficient incentive structures, such as research and development tax incentives, venture capital, funding mechanisms, etc;
   
8. 
   There is a need for alignment of research and innovation with the economy – services, manufacturing, mining, agriculture;
   
9. 
   Research and innovation should be delivering what the economy, society and environment need – skills, technologies, resources and processes.
   
10. 
    Efficiency in the economy is critical for sustainability and competitiveness.
    
11. 
    Key emerging themes for research and innovation:
    
    1. 
       Climate-resilient agriculture;
       
    2. 
       Renewable and clean energy;
       
    3. 
       Smart grids and energy efficiency;
       
    4. 
       Water management;
       
    5. 
       Low carbon transport systems;
       
    6. 
       ICT;
       
    7. 
       Biotech;
       
    8. 
       Advanced materials; and
       
    9. 
       Automotive technologies.
       

Challenges and issues:

• The key challenge is making it happen: we know what needs to be done, but progress since 2010 is mixed. How do we implement effectively?

• Do we have a National System of Innovation (NSI) or merely the sum of individual entities and systems? Unless improved coordination and collaboration across entities become a reality, we cannot talk about a system.

• What is our vision for the NSI, and how do we establish a single view of the NSI today and into the future?

• How do we strengthen and deepen the system?

• How do we align to produce what the economy and society needs – war on poverty – policy consistency?

• How do we mainstream quality research and innovation to become the domain of society and the economy as a whole?

• How do we differentiate the higher education sector to deliver for the economy and society?

• How do we increase research funding and support for postgraduates (inputs)?

• How do we increase output throughout the research and innovation value chain – skills, IP, economic, social and environmental added value? – and,

• How do we fundamentally transform the system?
An innovation roadmap for South Africa requires us to close the gap between what we have, and what we need. We need to look at what is in place, what our current strengths are, and determining our competitive edge. Looking into the future, we have the National Development Plan and Vision for 2030, providing the goals and objectives that we want to attain. We need to put a number of key strategies and programmes in place, and we should review whether they are addressing the gaps.
These are:
• National R&D Strategy;

• A 20-year Innovation Plan;

• HES Strategy;

• Innovation Infrastructure Plan;

• Flagship programmes;

• Internationalisation;

• Innovation for development; and

• Sectoral roadmaps.

6.