Learning Lessons Abroad on Funding Research and Innovation. 29 April 2016
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1 Learning Lessons Abroad on Funding Research and Innovation 29 April 2016 In South Africa universities contribute 2.1% of gross domestic product more than textiles and forestry and they employ 300,000 people which puts them on a par with the mining industry. Such comparisons could change perceptions of the sector as it strives to boost international competitiveness in research and innovation, says Professor Anastassios Pouris. At a Research and Innovation Dialogue held in Johannesburg from 7-8 April, Pouris delivered an overview of his report on Research and Innovation Funding Instruments to Raise South Africa s Competitiveness in Science and Technology: Lessons from other developing countries. The dialogue, themed Leveraging Research and Innovation for South Africa s Prosperity, was held by Universities South Africa orusaf and drew delegates from the top echelons of the country s 26 public universities, government and other agencies. Pouris, who is director of the University of Pretoria s Institute for Technological Innovation, was commissioned by USAf to identify and examine funding instruments used in countries such as South Korea, Brazil and China in order to increase South Africa s international competitiveness and to encourage and incentivise research and innovation. He was also asked to make recommendations relevant to the South African situation one where funding, especially from government, is likely to decline due to the competing demands of a developing country as well as the current funding crisis of tertiary education and pressures from a vocal student movement calling for free higher education. Crucial role, different approaches Innovation is recognised internationally as the fundamental cornerstone of economic growth, employment, international competitiveness and development, said Pouris. Innovation can make a major difference in tackling urgent developmental challenges. Examples of transformative technologies include the polio vaccine; the new seed varieties that launched the Asian Green Revolution; and anti-retroviral drugs that rendered HIV-AIDS a chronic and manageable disease, said Pouris. According to the OECD [Organisation for Economic Co-operation and Development] there is evidence that agricultural research and development has greater impact on poverty reduction than most other public investments. Consequently, developing country governments should be actively involved in
2 promoting research and development or R&D. Pouris said approaches used by governments to support innovation depend on their understanding of the innovation process. In the linear model of innovation the first generation innovation model governments support R&D through sponsored research, tax incentives and direct subsidies, loans and repayable contributions to business, universities and others. With second generation innovation policy, the chain-linked model, emphasis is placed on the development of strategic research partnerships or SRPs. Such partnerships are defined as cooperative relationships involving organisations that conduct or sponsor R&D. Examples include research joint ventures; strategic alliances and networks; licensing and sponsored research agreements involving universities, government laboratories and firms; and university based entrepreneurial start-ups. Countries appear to monitor each other and successful instruments are adopted internationally. Clustering approaches and smart specialisation are followed by most countries with a national system of innovation, Pouris explained. Clusters bring together firms, higher education and research institutions and other entities to facilitate collaboration on complementary economic activities. Smart specialisation is a policy framework to help firms strengthen scientific, technological and industrial specialisation patterns while identifying and encouraging the emergence of new domains of economic and technological activity. Pouris said that an increasingly competitive environment for ideas, talent and funds had also seen governments set up research excellence initiatives. These are instruments designed to encourage outstanding research by providing large-scale long term funding to designated research units. They support the recruitment of excellent researchers from abroad and the extension or improvement of the physical infrastructure and the training of researchers. China, South Korea, Brazil China and South Korea have based their developmental plans on science, technology and innovation. Since 1978 the Deng Xiaoping theory of science and technology [S&T] has been the theoretical and ideological foundation of China s S&T policy, according to Pouris. Deng Xiaoping said that while Marx was quite right to say science and technology are part of the productive forces his statement was incomplete. The complete statement should be that science and technology constitute a primary productive
3 force. If communists continue to recognise this issue, why is it so difficult for us? asked Pouris. The Chinese S&T system was reformed and included in the broader agenda of economic reforms where research and development is now an important element of economic policy. Science and technology industrial parks; university science parks; and technology business incubators were initiated. Similarly, new infrastructures to encourage industry-science relationships and spin offs from public research organisations started to fill the gap. In Korea the techno-industrial sphere was developed first through reverse engineering led by government research institutes from the 1960s to the 1980s. It was followed by a phase of corporate R&D led by Chaebols in the 1980s to 1990s. Probably the most striking aspect of South Korea s development is the radical shift of its economy from low- to high-tech value-added sectors in only a few decades. Pouris cited a novel approach in Brazil that saw the creation of extra-budgetary sectorial funds. Since 1999, a new research financial framework has evolved with the establishment of extra-budgetary sectorial funds for research in universities with interest to companies. The funds are supported through levies and relevant taxes. Political support is key In all three countries science, technology and innovation are coordinated and supported by the political authorities. For example, in China the National Steering Group for S&T and Education in the State Council is the highest ranked organisation coordinating all education, research and innovation related activities. It consists of nine member ministries or agencies. In Korea the Presidential Advisory Council on Science and Technology is chaired by the president with 23 members. In Brazil the Ministry of Science, Technology and Innovation and the Ministry of Development, Industry and Foreign Trade jointly define the industrial and technological policy priorities and in partnership with the Ministry of Finance establish the distribution of the National Fund for Scientific and Technological Development, said Pouris. When science and technology are recognised by the political authorities as critical developmental forces, the effort is to develop appropriate instruments that will achieve the policy objectives.
4 What to do? All this is in marked contrast to South Africa where science, technology and innovation are isolated under a single government ministry, the Department of Science and Technology or DST. This finds further expression in government funding where the gross expenditure on R&D as a percentage of gross domestic product is substantially lower than in the other countries in the financial year it was 0.76% in South Africa, compared with China at 1.84%, Korea at 4.36% and Brazil at 1.16%. But what should universities do in a scenario such as South Africa s where government funding is already low and likely to get lower? Then the effort must focus on informing decision-makers of the potential benefits of science, technology and innovation, said Pouris, adding that this was the case in the United States, where universities were involved in efforts to influence government. The rise in federal lobbying among universities in the United States began in the 1980s in response to budget cuts in research allocation during the [Ronald] Reagan administration. Pouris said that other countries regularly institute foresight exercises in order to focus government on issues of priority in science, technology and innovation. There is tentative evidence that foresight exercises affect the performance of the national system of innovation. This approach is not utilised in South Africa. Recommendations Among his recommendations Pouris said that Universities South Africa should institutionalise advocacy activities within the organisation and that the provision of evidence of the value of universities for innovation, the economy and society should be an integral part of these activities and should be disseminated to relevant stakeholders. He also said that programmes based on the triple helix approach were powerful instruments to bring together government, industry and universities. Such instruments are in accordance with international best practice and within the DST s efforts to promote innovation in industry on a co-funding basis. USAf should encourage and monitor the establishment of such programmes and take appropriate actions. Pouris said South African universities needed to be more flexible and should use innovative approaches to increase PhD enrolments. The structured doctoral programmes in Europe appear to be particularly useful for multidisciplinary and interdisciplinary areas such as nanotechnology and advanced manufacturing.
5 Appointing foreign professors at the country s universities for a few months per year could also address concerns about the current lack of professors to supervise postgraduates. We need to triple the number of PhDs in South Africa, said Pouris, but the initial reaction is but we don t have the staff to supervise them, let s send them abroad. I ve met highly qualified foreign academics working in Moscow. I asked them what university they belonged to and they replied that they don t; they worked for three months at one institution, three months at another and so on. But in South Africa, if they are not prepared to be here for six months at the very least, we can t do it! Pouris also advocated using levies and small special taxes to protect R&D expenditures from budgetary variations. USAf together with the existing funding agencies supporting university research should consider discussing the issue with DST and Treasury. Brazil has been successful in supporting R&D through levies and specific taxes. The approach has the benefit that it neutralises the effect of other government priorities competing with investments in R&D. Such measures, Pouris believes, are doable and could be powerfully effective in helping to raise South Africa s competitiveness in science and technology. For the document: 1UywJSn+BI/tD
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