Unabridged statement: Minister of Science & Technology on the TIA

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Address by the Minister of Science and Technology, Naledi Pandor MP, at the launch of the Technology Innovation Agency, Johannesburg, 29 October 2010

Mamphela Ramphele;

TIA board members;

Distinguished guests;

Journalists

The official launch of the Technology Innovation Agency is not just an exciting development for the Department of Science and Technology, but it’s also a very significant milestone for us as a country.

The department of Science and Technology has taken several steps in the past five years directed at creating the basis for enhanced South African performance in Science Technology and Innovation. The Technology Innovation Agency is one of the results of the significant re-orientation of the sector.

South Africa faces many challenges in its determination to significantly improve performance in STI. It is our belief that we must address these challenges as our success will mean a large
contribution to South Africa’s economic growth and social well-being.

Recent reports on our investment in Research and Development and on the outcomes of this investment clearly point to the tasks we must confront.

The reports indicate that by 2008/09 South African investment in R&D had grown to 0.93% of GDP – a sum of R21bn.

This is a lower proportion than our ambitious plans nevertheless, it is a significant injection of funds for promoting Research and Development (R&D)

The reports indicate that we are not fully exploiting our R&D investments to secure increased innovation.

They suggest more attention to basic research in higher education and in our science councils, greater attention to industry/university collaboration for innovation and a stronger focus on utilising science hubs, centres of excellence and technology companies as sources of products and processes that are open to innovation and commercialisation.

The Technology Innovation Agency is part of the institutional framework we have established to advance these goals. It will work closely with R + D performing institutions and our soon to be launched NIMPO (National Intellectual Property Management Office). TIA has been provided with a number of attributes that will support it in executing its mandate efficiently.

It has an exceptionally well qualified board and CEO. A very committed chair of the board and a number of institutions that are part of it and that have a tradition of R&D activity.

The first principal task that confronts TIA is a full review of the archive of R + D that is part of the former incubator hubs and Tshumisano.

The second is to determine the steps necessary to commercialise some of the most promising contents of the archives to commercial product. The third is the launch we celebrate to-day. A launch that is the beginning of a new partnership with industry and existing R&D institutions.

Fourth, given the pioneering role assigned to TIA, it must review innovation in South Africa and provide advice to government on how we should strengthen our ability to expand innovation and
commercialisation.

The government must be alerted of strengths and weaknesses in the area of innovation promotion.

It is important for TIA to fully understand the terrain of innovation opportunity before initiating projects that might not lead to the outcomes we seek to achieve.

Our establishment of TIA takes place in a difficult economic environment. We believe TIA can lay the basis for convincing South Africa that innovation is a worthwhile risk.

We expect a great deal from TIA. We place a considerable burden on TIA. We know that we are desperately short of early-stage project funding in South Africa. There is usually late-stage funding for promising projects to be found in the private sector, but early-stage projects are often stifled for lack of funding. This is an area in which TIA could lead.

We also expect more from South Africa’s strong financial, banking and business sectors.

We would like to encourage a more substantive R&D investment in science, technology and social upliftment.

We look to the private sector for R + D investment, if we are to achieve the South Africa’s target of 1.5% of GDP invested in R&D by 2014.

The DST has an impressive range of strategies and programmes to stimulate innovation.

We introduced the R&D tax incentive in 2006, administered by the DST and SARS, and the venture capital tax company incentive in 2009, administered by SARS, to boost research and development and early-stage project funding. But both of these interventions need to be reassessed and we are re-assessing them.

The establishment of the TIA in particular has created an opportunity to attract interest from South Africa’s strong financial and banking sector, and to involve it, as well as the business community, in the DST’s innovation, economic, and public-benefit objectives.

As an agency of the DST, the TIA must act as a catalyst for stimulating a stronger venture capital industry in this country by interacting with local and foreign venture capital firms to spearhead
the commercialization of our technology in global markets.

The Medium Term Budget Policy announcement on changes to exchange-control regulations will assist in this regard.

We have been inclined to adopt a “little South Africa” approach. Yet TIA’s projects, especially in the areas of biotech and vaccines, need both international experience and early-stage finance to survive.

There have been unprecedented developments in HIV vaccine research recently, but most of the most exciting work is conducted through international collaboration even if most of it is funded by the US (private and public).

We have never been in a better position to make a breakthrough. And it won’t happen in the US. It will happen right here in Africa, in Nairobi or in Cape Town.

I firmly believe TIA will be a leading agency in such developments and I wish the organisation well in its efforts to expand innovation, growth and well being in South Africa and Africa.



I thank you