In the ‘Global Competitiveness Report (GCR) of 2010–2011’, South Africa ranks 54th out of 139 competing countries, and excelled by ranking 27th in the intellectual property (IP) protection category for the first pillar.

The GCR comprises 12 pillars that measure the competing countries, and ranks them according to categories within these pillars to establish the competitiveness of countries in relation to one another. The first pillar deals with the institutional environment and comprises 19 categories, including property rights, diversion of public funds and the strength of auditing and reporting standards.

South Africa is strong and active within the IP industry and competes strongly in brands, trademarks and anticounterfeiting, besides others. Perhaps, this report is an indication of this strength, says Bowman Gilfillan director Johnny Fiandeiro.

“South Africa did well in the IP protection category, considering that the US claimed the twenty-fourth position. The US is one of the benchmark countries that other countries would want to compete closely with,” Fiandeiro tells Polity.

South Africa is ranked at position 103 in the category of government procurement of advanced technology products but has dropped from this position since last year’s GCR. Although not a necessity in the industry, the advanced technology products market would be beneficial to those wanting a market to commercialise their IP.

There are many challenges for patents in terms of getting the innovation off the ground and commercialised, but South Africa has the potential, as evidenced in its ranking of 47 in the capacity for innovation factor; although this would go hand in hand with the availability of scientists and engineers and the quality of scientific research institutions factors, says Fiandeiro.

“South Africa’s current position is forty-third in the utility patents per million population category; however, I believe that only the patents that have been filed have been used to determine this figure. In South Africa, there is currently an average of 900 total applications filed a month, but 60% to 70% of these patent applications originate from non-South African companies wishing to obtain patent protection in South Africa,” he says.

Patent data is not a foolproof way of detecting or monitoring local innovation, but it is a factor that seems to be internationally recognised as a way of gauging the innovativeness of a country, says Fiandeiro.

“The figures do not seem to take into account the patents that are registered but never fully brought to commercialisation or developed further. The report does not examine the quality of a patent or the commercialising of the underlying tech- nology,” he adds.

He continues: “While it is a high percentage figure and is flattering to South Africa, it is not a true indication of local innovation.”

The report shows that there are three possible stages in which a country can fall, namely the factor-driven stage, the efficiency-driven stage and the innovation-driven stage.

South Africa is currently at the efficiency- driven stage, and has been for the past few years. “While government has plans and funds allocated for new innovation, the process to bring this innovation to the fore appears to be a slow. South Africa is in a holding pattern and will most likely remain there for a few more years. Ideally, we need to be working towards the innovation-driven stage and be at the upper end of the innovation-driven economy,” he says.

The IP Rights from Publicly Financed Research and Development Act, No 51 of 2008, which was implemented on August 2, might be able to generate and grow the country towards the innovation-driven stage.

“But the Act could also lower South Africa’s current position at next year’s ranking of the university-industry collaboration in research and development (R&D), which is at the twenty-fourth position this year,” says Fiandeiro.

“Entities may be nervous to invest and hesitatant to use universities as an R&D platform because of the limitations this Act may impose,” he says.

Fiandeiro also has a few concerns about the methods used to undertake the GCR survey, the low number of people that participated in the survey and the broad-based questions.

“For example, in measuring the IP protection for each country, the respondents were asked how they rated IP protection, including anticounterfeiting measures, in their specific country. IP is a broad subject, and the answers would depend on the respondents’ understanding of the question, as well as their experience or knowledge,” he says.

“One cannot decipher who the survey was aimed at and, besides being too broad based, the report was not the most tech- nically thorough, but rather a representation of the averages within the industries examined.

“The rankings for other sub-Saharan African countries have been a disappointment relative to last year’s. In previous years, the most popular countries to file a patent, as well as receive a good return on investment, were Kenya, Nigeria and Ghana. The rankings of these sub-Saharan African countries this year are a cause for concern, as they have lower rankings than in 2009.”