South Africa's spending on research and development (R&D) has dropped slightly in terms of gross domestic product (GDP) for the second year running.

Science and Technology Minister Naledi Pandor told journalists at Parliament on Thursday that while R&D spending rose in nominal terms, from R18,6-billion in 2007/8 to R21-billion in 2008/9, gross spending as a percentage of GDP slipped from 0,93% to 0,92%.

"We are worried that this percentage of GDP, which is the most-widely accepted indicator of competitiveness of a country's economy, is not growing at the level that we wanted to," Pandor said.

Her department has set an R&D target of one percent of GDP.

The figures are contained in the 2008/9 National Survey of Research and Experimental Development, tabled by Pandor at the media briefing.

In terms of GDP, spending on R&D rose steadily from 1997 (0,60%) to a high in 2006 of 0,95%, but has dropped over the past two years.

The survey notes that "few Organisation for Economic Cooperation and Development (OECD) countries have a GERD [gross expenditure on R&D] equivalent to less than one percent of GDP".

A table in the document issued by the department shows that spending by Sweden, Finland, Japan and the US on R&D, exceeds 3% of GDP.

Pandor said that R&D spending in South Africa needed to increase by R1,7-billion to reach the one percent target.

The survey results would now be probed "to establish why we're not meeting that 1% target and to look at where it is we may be falling behind".

She said that South Africa's skills shortage was a "major problem" in this regard. Another key constraint was the low proportion of researchers in relation to the total employed population.

According to the survey, South Africa has 1,4 researchers per 1 000 workers, compared with China (1,9), Argentina (2,9), Australia (8,5) and Japan (11), among others.

Of the R21-billion spent on R&D in 2008/9, the bulk - R12,3-billion - was spent by business. In nominal terms, this was an increase of about 14,8% over the previous year.