Funding shortfall hampers SA innovation

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Many South African innovations are being sold to overseas investors and lost to the country because of the lack of local funding for early stage development, says Technology Top 100 (TT100) CEO Deirdre Marcus.
Speaking ahead of last night`s annual innovation awards ceremony, to be held in Johannesburg, Marcus says the lack of funding means companies cannot guarantee their business models will be sustainable.
“We have had a number of companies that have entered the awards, but pulled out at the last minute because they cannot put their hands on their hearts and say their innovations will be sustainable in the local context,” Marcus says. “They have now sold their innovations to overseas investors who are prepared to take these innovations to the next level and turn them into viable products or business cases.”
Marcus says one of the key objectives of the TT100 awards, along with major sponsor the Department of Science and Technology (DST), is to stem the haemorrhaging of this innovation and keep it in the country to ensure economic development.
Giving them a break
The DST has embarked on a programme that will enable companies to receive tax breaks for research and development. However, Marcus believes domestic funders should be looking closer at local innovation and be ready to take a risk on it.
This year, the TT100 had about 500 entrants, but only 71 have made it to the final round. Criteria for candidates to be included in the top 100 list are that there must be real innovation and it must be sustainable.
Marcus says the number of IT-related companies entering the awards has increased steadily over the past few years, but they are screened carefully.
“We have to look closely that there is innovation, otherwise we find that what they are presenting is merely a variation on something that already exists,” she says.
The TT100 awards, which are now in their 17th year, are changing and looking to ensure companies get real value out of it, Marcus adds.
She noted that this includes the development of a business intelligence system that ensures the sponsors, which include Eskom, the Academy of Engineering and the Johannesburg Stock Exchange, and the qualifying companies do get the benefit of feedback and make strong connections with each other.

At the ceremony Science and Technology minister Mosibudi Mangena said it was encouraging to see technology companies take an innovative approach to the challenges facing them.
Mangena stated that while the government tried to promote public-private partnerships, he is concerned by what this year’s entrants revealed.
“It is worrying that no state universities and only two publicly funded research councils are willing to subject themselves to the scrutiny of this council…It is also worrying that most of you here today are not willing to enter into partnerships with state-funded institutions.”
Mangena said government initiatives such as the Technology Innovation Agency were created to promote innovation – which is fundamental to growth – and increase the benefits of partnership by closing the gap between the public and private sector.
He also noted that companies continued to shy away from processes of patenting as a means to protect their intellectual property. He called for a change of this practice, noting that measures such as the Intellectual Property Rights for Publicly Funded Research Act will illustrate the benefits of patenting innovations.
The winners
Bill Venter, founder of the Altron Group, and Irvine Bell, founder of Bell Equipment, were recognised for their contributions to technology. Both received the 2008 Life Time Achievers Award.
The award for the 2008 Department of Science and Technology Minister’s Award for Overall Excellence went to Bell Equipment. Emerging company, Breadbin Interactive, was awarded the Director-General’s award for Overall Excellence, as well as the award for Excellence in the Management of Technology.
Resource Ballast Technologies scooped the majority of the awards in the emerging category. The company was jointly awarded the Director-General’s award for Overall Excellence, the award for Excellence in the Management of Systems, and the Excellence in the Management of Research award.
Established enterprise X/procure Software won the Eskom Award for Excellence in the Management of Technology, while Rapid Liquid Dispensing won the award for Excellence in the Management of Innovation. DebTech won the same award but for the emerging category.
ID Control Solutions, an established enterprise, received the award for Excellence in the Management of People, and Flexi Manufacturing won the award in the emerging category. Established companies Hazelton Pumps and the South African Post Office jointly received the award for Excellence in the Management of Systems.
Sasol and the South African Medical Research Council jointly won the award for Excellence in the Management of Research – in the established category. Altech and Sasol were jointly awarded the accolade for Excellence in the Management of Technology, Innovation and People.