Isaac Maredi at Sustainability Conference 2015, NCPC

1. Industr y Innovation
Par tner ships
Innovation for Sustainable Industry
Development
22 July 2015
Isaac Maredi

2. Presentation Outline
System Wide Challenges
 Technology Balance of Payments
 Manufacturing Trade Deficit
Private Sector R&D Investment
 Rationale for Funding Industry R&D
 GERD Trends
DST Interventions
 Industry Innovation Partnerships Programme
 Environmental Innovation Programme
2

3. SA Technology Balance of Payments
www.dst.gov.za 3
-
500.0
1,000.0
1,500.0
2,000.0
2,500.0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Paymentsandreceipts
Figure 2(a)
Payments Receipts
• SA is a net importer of technology
• The gap between imports and exports has
been increasing
• Points to increasing local demand for
technology

4. SA’s current account deficit
www.dst.gov.za 4
Manufacturing Trade Deficit
• Manufactured goods made up 52% of merchandise
exported in 2012, up from 41% in 1994
• SA’s growing trade deficit in the manufacturing sector is
a structural concern for the economy

5. 5
Rational for industry R&D funding
?
R&D / Technology /
New Knowledge:
direct impact on
competitiveness &
innovation
NDP & NGP:
Role of RDI in
economic growth
TYIP : Develop and
capacitate a knowledge
economy
IPAP: invest in innovation & technology to
ramp up competitiveness in production &
services sectors of the economy

7. Investors and Flows, 2011/12 R&D survey
39%
43%
15%

8. 8
Technology Localisation Programme (TLP):
• Leverage public procurement opportunities
• Improve the technological capability of local firms leading to
 Increased competitiveness (quality, cost, customisation)
 Expanded capability (new products, services)
 Expanded market (local and global)
• Industry Innovation Partnerships Programme
• Sector Innovation Funds
DST Interventions
DST tax incentive programme

9. Industry Innovation
Partnerships
Sector Innovation Fund

10. Motivation for IIP
 DST allocated R500 million over 2013/14 MTEF to develop and
implement the Industry Innovation Partnership (IIP) Programme
 Key goals:
 Leverage industry investment in RDI by stimulating increased RDI
co-funding & participation by industry players in projects to
maintain and increase their export market share
 Mitigate against under-investment in technology & innovation
in identified niche and strategic sectors of SA economy so as to
improve their competitiveness
 Key long-term outcomes measure will be increased sector
contribution to GDP through stronger RDI-based industrial
development

11. IIP Initiatives
Titanium Development (existing CoC)
Satellite Development & Manufacturing
CSIR
(Bio-manufacturing, Nano-upscaling, Bio-refinery & Photonics)
ICT Industry Partnerships (CSIR Meraka)
Nanotechnology Innovation Centre
Sector Innovation Fund (SIF)

12. Sector Innovation Funds
 DST intervention to enhance economic competitiveness of
participating sectors
 Encourages private sector to co-invest with government in
RDI activities that address competitiveness and sustainability
of participating sectors
 Managed by Industry associations or bodies
 Formal entities
 representing interest of members
 Industry identifies challenges & determines own RDI agenda

13. Key Performance Indicators
 RDI outputs (HCD, knowledge
products, scientific publications)
 Absorption capacity and/or rate iro
HCD
 Knowledge/technology transfer
 No. of knowledge products
transferred
 To whom (big companies/SMMEs;
previously disadvantaged players;
etc)
 Jobs created or sustained
 New enterprises created or
supported
 Amount of funding contributed by
sector
 Increase/sustaining of market share,
including exports
 Increased contribution to GDP (long
term)
Measured at impact, outcomes and output levels
Some key performance indicators:

14. Complexities and considerations
 Must use the process to better understand and appreciate
the complexities of R&D funding in the private sector
 Signaled that performance measure is not simply matching
funding for the SIF but increases in the level of R&D within
the sector (even in-house funding)
 SIF is a crucial initiative under the proposed MTSF target
1.5% GERD by 2019
 DST aims to secure continued public funding beyond the
ECSP and at significantly higher levels

15. 2014/15 IF APPLICANTS
Industry Association Initiative/Programme
South African Minerals to Metals
Research Institute
Mineral Processing
Citrus Research International Research for Citrus Export
Marine Finfish Farmers’ Association of
South Africa
South African Marine Aquaculture Research Centre
Paper Manufacturing Association of
South Africa
Paper Manufacturing
Forestry South Africa Future Plantation Forests for the South African Bio economy
Sugar Milling Research Institute Sugarcane Bio-refinery Research Programme
Fresh Produce Exporters’ Forum Post Harvest Innovation Programme
Marine Industry Association of South
Africa
Marine Manufacturing innovation
Wine Industry Network of Expertise and
Technology
Wine Industry Innovation
Sectors Supported
9 SIFs established by end 2014/15

16. Sectors’ Contribution to GDP
SA’s GDP
SAMMRI
(8.8%)
CRI
(0.16%)
MFFASA
(0.026%)
PAMSA
(0.6%)
FSA
(1.2%) SMRI
(0.7%)
FPEF
(1%)
MIASA
WINETECH
(2.2%)

17. Future plans
 Permanent budget line item - MTEF
 Industry innovation partnerships with direct (mandatory) industry
participation
 Sector Innovation Fund aimed at transformation in key sector(s):
 Existing SIF objectives
 Localisation of
 RDI capacity and services
 Technology driven industry development and competitiveness
 Transformation within the NSI
 Institutions, researchers, etc
 Contribute to other industry and economic development imperatives
 E.g., Black Industrialists Programme

18. Overview of Environmental
Innovation at DST
Environmental Services &
Technologies
Water RDI Roadmap Waste RDI Roadmap Environmental Services
WADER
Waste RDI
Implementation Unit
Ecological Infrastructure
Biomimicry Platform

19. Water RDI Roadmap
How
Problem
Statement:
• 98% of all
water
resources
already
allocated
• Non-revenue
water is 36%
on average
~R7 billion /
yr
• By 2030
demand will
outstrip
supply by
17%
Problem
Human Capital
Development
(HCD)
(Skills)
Innovation
(technological
and non-
technological)
(Technology)
Research and
Development
(R&D)
(Evidence)
Means
Opportunities:
Better coordination
and improved
decision making
supported by the
translation of
research into
practise
More products and
services to reach
the market through
a better coordinated
water innovation
pipeline
National savings
through targeted
RDI investments
(e.g. By reducing
water losses to 15%,
through innovation
interventions, an
approximate R3.5 bil
would become
available for
investment in other
needs/areas)
Opportunities
Use of sources
Govern, plan &
manage
Supply
infrastructure
Operational
performance
Govern, plan &
manage
Efficiency
Monitoring and
collection
Increase ability to make use of more sources of
water, including alternatives.
Improve governance, planning and management of
supply and delivery.
Improve adequacy of performance of supply
infrastructure.
Run water as a financially sustainable business by
improving operational performance.
Improve governance, planning and management of
demand and use.
Reduce losses and increase efficiency of
productive use.
Improve performance of pricing, monitoring,
metering, billing and collection.

20. Environmental Innovation
Programme

21. Pull together the research and
commercialisation stages of the water
innovation continuum.
• Demonstrate water technologies in
operational environments (piloted at
scale).
• Assess the performance, validity,
impact (social, environmental, etc.)
and suitability of the technology.
• Build multi-sectoral and cross-
disciplinary partnerships in support
of technology demonstrators.
• Disseminate information widely to
promote technology adoption,
investment, and user-confidence as
well as communicate gaps in
research, etc.
• Promote and support water
entrepreneurship and relevant skills
development in the water
technologies space.
Taking technologies out of the
laboratory and proving them in real-
world test situations
Image: Adapted from SDTC, 2014
Water Technology Demonstration Programme

22. Waste and
Environmen
t
Waste
Logistics
Performance
Strategic
Planning
Modelling
and
Analytics
Technology
Solutions
Waste and
Society
Waste RDI Roadmap
Strengthen skills and generate evidence to optimise
decision-making around the movement of waste
across the country (logistics, assets, resources)
Develop, evaluate, demonstrate, localise and deploy
technologies to support municipalities and industry
in diverting waste away from landfill towards value-
add
Strengthen skills in methods, tools, models and
techniques and apply these to generate evidence to
inform the management of waste
Strengthen skills and generate evidence to inform
decision-making, planning and policy development
by government and industry
Strengthen skills, generate evidence, deploy
technologies to reduce the impacts of waste on
receiving environments
Deepen understanding of the socio-economic
opportunities provided by waste, but also the
threats that waste poses to human health
How
Problem
Statement:
• 90% of South
Africa’s waste
goes to
landfill
• Resulting in
loss of
resources to
the economy
• Resulting in
social
(human
health) and
environment
al impacts
• Municipalitie
s face
challenges in
delivering
services and
diverting
waste from
landfill
• Alternative
waste
treatment
typically
more
expensive
Opportunities:
• Preventing
waste creates
opportunities
for industry to
increase value-
addition and
competitiveness
• Diverting waste
from landfill
creates
opportunities
for new direct
and indirect
jobs and
enterprises
• Improved
management of
waste reduces
risks to human
health and
environment
Human Capital
Development
(HCD)
(Skills)
Innovation
(technological
and non-
technological)
(Technology)
Research and
Development
(R&D)
(Evidence)
OpportunitiesMeansProblem

23. Environmental Services
Environment &
Society
• Citizen Science
– MiniSASS app
• SARVA
Ecological
Infrastructure
• Evaluation of
NRM funding
window of the
Green Fund
• Developing a
data and
institution
management
portal for the
Ntabalenga
Catchment -
DEA
Biomimicry
Platform
• Being
developed with
WRC – creating
a community of
practice on
Biomimicry

24. Siyabonga
isaac.maredi@dst.gov.za
+27 12 843 8761