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Date : 18/11/2003
Source: Ministry of Science and Technology
Title: Sonjica: Eastern Cape Technology Imbizo


ADDRESS BY MS B SONJICA, DEPUTY MINISTER OF SCIENCE AND TECHNOLOGY, AT THE TECHNOLOGY IMBIZO FOR EASTERN CAPE, Protea Hotel, Port Elizabeth, 18 November 2003

Distinguished guests, friends and colleagues, ladies and gentlemen,

I am deeply honoured that there is such a good turnout from very senior ranks in the provincial and the local government structures, Deputy Vice Chancellors and Deans of Faculties from the Eastern Cape higher education institutions, Chief Executive Officers of small and medium enterprises (SMEs), very senior managers of large companies and in a number of cases, their production and technical managers, senior representatives from different sectoral, education and training authorities (SETAs).

This initiative draws a very strong focus on technology and the urgent need to put it to use for the economic development of the Eastern Cape.

As you are no doubt aware, "Imbizo" is associated with talks/discussions and we are therefore, going to undertake a number of serious discussions about technology. A key component of today's Imbizo is to identify what the technological barriers to growth and development are, so that government can establish priorities to deal with them in a coherent and holistic manner.

In terms of national focus I would like to present you with some statistical indications of why we are feeling so driven to promote local technological innovation. Out of a total of 162 countries, South Africa ranks as 39th in terms of technology achievement - positioning us as "dynamic technology adopters".

However the broader assessment of development, human development in particular, places us at 94th out of 162. In other words, we are not putting technology to work for the broader population. We need to continue to put technology to work, to generate revenues for our existing industrial base but we must, as a matter of urgency, start generating new businesses - service providers - that use technology for education, health and particularly to enhance the value of our natural resources before they get onto the market.

If we look at the case of India, we find that they are facing the same problems as we are. The United Nations report of 2001 placed South Africa at 39th in the area of information technology (IT), ahead of Thailand and even India at 63rd position. The reason given was that in India, although it holds a world class IT hub in Bangalore, the benefits are focused in the region of Bangalore only and do not diffuse throughout the country.

My department has therefore become increasingly aware of the urgent need to get closer to provincial structures and activities, so as to appreciate and understand the environment in which business and the province operate, and the manner in which technologies that have long been on the market are applied. To address this and to give industry the opportunity to engage with the Department of Science and Technology (DST) it was decided that Imbizos be held in all nine provinces, with the first targeted for this year at the three coastal areas, KwaZulu-Natal, Western Cape, and Eastern Cape.

As a prelude to the Imbizos, a series of interviews and visits to a selection of large, medium and small organisations in the province were conducted to get a snap shot of the status of technology in the province. The interviews covered several sectors and it was gratifying to discover a high number of "little gems" of technology, innovation and entrepreneurship. Right here in the Eastern Cape, small but potentially significant developments that you can be extremely proud of have taken place. Examples include:
* A walk-in bath for the disabled
* A DNA probe to distinguish different species of mielie bug for phytosanitary requirements for our exports
* Laminated textiles for operating in extreme conditions,
* Cold transport containers for food and distribution industries
* Innovative decorative finishings and furnishings to name but a few.

Most importantly, this initiative has been warmly welcomed by the Eastern Cape participants. Even though the appreciation of the Rand in recent months has put extreme pressure on many businesses whose focus has become short term survival, there was always a willingness to engage and exchange, and for this DST is very appreciative. If there was criticism, it was that DST should have embarked on this outreach programme sooner.

Obviously the context of the exchange was in relation to technology but as technology can not exist in a silo DST received valuable comment from the Eastern Cape industry on a number of issues that had relevance and impact around the debate on the province's state of technological development.

Arising from the intelligence and information DST identified, a number of common technology themes that cut across sectors, have been articulated into themes for the breakaway sessions after the plenary. My colleagues will deal with these in detail a little later.

Before I proceed, I would like to take you back in time to get a sense of why we experience some of the problems we have in spreading the use of technology for business development, wealth creation, empowerment and poverty reduction. We need to examine the history behind our technology and industrial base. Pre 1994 South Africa had an economy that was strongly oriented to being a "dig it up and ship it out" exporter of raw materials. The agricultural sector was highly subsidised with a plethora of regulatory boards. There was a policy of import substitution with high tariff protection resulting in a non-competitive economy. There were several state monopoly suppliers of critical services that were inflexible and skewed.

Mandatory inflationary increases, without any reference to market forces, became the order of the day and expectations raised from this false market behaviour remain with us today. Critically, the bulk of the potentially economic population was denied access to the economy.

After the 1994 elections, South Africa committed itself to being part of the global village of nations and adopted an open style economy and the principle of engaging in the market on the basis of fair and free competition. South Africa began by reducing various tariff structures. But much greater changes needed to be made. There was an acute need to realign the research and development (R&D) capability to meet South Africa's changing needs.

As a result, DST embarked on a review that examined the R&D capability, capacity and deployment. A science and technology (S&T) policy was formulated in 1995 supported by various instruments including the Innovation Fund, the GODISA and Tshumisano programmes for technology transfer and development.

More recently the policy has been overhauled with the National R&D Strategy, which has the operational objectives of achieving mastery of technological change in our economy and society to support innovation; increasing investment in South Africa's science base to support human capital and transformation; and strengthening and realigning the S&T machinery of government to support alignment and delivery.

In support of this, there are a number of technology missions, which have been initiated, including Technology in support of Poverty Reduction, Information and Communication Technology, the National Biotechnology Strategy, the Advanced Manufacturing and Logistics Strategy - which was formulated in 2002 and is currently being rolled out; as well as a programme for the resource-based industries that will come into effect in 2004.

You will be pleased to know that the "Advanced Manufacturing and Technology Strategy" of my department strongly supports the Automotive Industry Development Centre (AIDC), which has just set up a regional office in Port Elizabeth.

With all the emphasis on technology, let me clarify its role to place all of the previous statements in context: The role of technology is to produce goods and services for consumption. However, that in itself is not enough. The goods and services need to be produced effectively and efficiently for South Africa to compete in world markets. The will to compete drives innovation to produce new or improved production processes, goods or services that are attractive in the market.

The challenge to South Africa is to identify opportunities that will create employment, produce a skilled and able workforce, provide an environment of fairness and equity, give everyone access to basic services, capitalise on South Africa's abundance of key and unique natural resources and create a manufacturing economy that becomes increasingly knowledge-based. South Africa needs to bridge the gap between developed and developing economies and, as the most developed economy in Africa, act as the platform for economic transformation for the rest of Africa.

A recent survey on innovation in South Africa posed the question: "Is South Africa a technology colony?" The findings reveal that South Africa is highly dependent on foreign technology for new products and there is a low national system of innovation. The sectors with low levels of innovation are those that have been swamped in their bid for survival, including the textiles, clothing, leather and footwear sectors. However, high levels of innovation were found in the wood, paper, transport equipment, electrical and publishing sectors.

In a recent survey on small, micro, and medium enterprises (SMMEs) in developing countries, South Africa recorded the highest rate of failure, but South Africa exhibits surprisingly high levels of innovative behaviour and in fact, is only just short of European Union levels. We need to review critically why there should be such contrasting conditions. Clearly considerably more support needs to be channelled towards SMMEs and their development. When combined with foreign efforts and the national R&D infrastructure, there is every reason to believe that South Africa can and will prosper as a showcase economy in the developing world.

Eastern Cape is a province with many natural resources and advantages in South Africa. The Eastern Cape possesses some of the world's finest coastline and scenery along the Wild Coast. It has excellent beaches and a hinterland of mountains and solitude. In recent years marginal agricultural land has been returned to more efficient and profitable natural resources such as game farming and conservation with notable effects on the now rapidly developing local tourism industry. In short, the world has recently begun to recognise the Eastern Cape as one of Africa's jewels.

The Eastern Cape has established itself as the automotive hub in South Africa and the continent. Through the Motor Industry Development Programme (MIDP) programme a truly world class automotive sector is growing in leaps and bounds accounting for half the manufacturing sector in this province.

Just looking back to 1999 the Eastern Cape held major investments of 13 world famous companies accounting for 21530 jobs. Of these 81% were in the automotive sector. It is significant that in that same year we saw that of the 455 small enterprises recorded by the Eastern Cape Development Corporation's industrial database, 30% were in the value-adding technical area of metals/mechanical and a further 15% of these SMEs were in chemicals, rubber and plastics.

There are other long established industries including food, textiles, clothing and consumer products. In addition there is good urban infrastructure supported by a series of world class educational and R&D institutions. In moving into the future, Eastern Cape needs to keep what it has as an economic platform and develop it further. Why I say this is because many industries have ageing plant and equipment, labour forces that are stagnant with little scope for personal growth. Recently many of these sectors felt the cycle had bottomed out and had started to reinvest. However the strong Rand is putting fierce pressure on many export focussed industries.

And there is a critical need to develop other economic sectors that will position the province as an economically successful contributor. This is desperately needed to alleviate the low social development index covering quality of life, education, access to services, etc. and to create employment, particularly in the rural areas.

Several government initiatives are in place to address these issues and to drive an entrepreneurial engagement of technology and sophisticated infrastructure platforms including Chemin, the GODISA chemical incubator and the Tshumisano station at Port Elizabeth Technikon, both supported by my department, as well as several poverty alleviation programmes in the craft, textile and agricultural sectors.

Whilst the challenges that face South Africa and Eastern Cape are immense, there are success stories of other countries that can serve as models of achievement.

In 1965, Kenya and South Korea had similar sized economies and Korea had a literacy rate of around 35%. In 30 years, by 1995, Korea's literacy rate was 99.9% and it possessed one of the Asian Tiger economies. The obvious differences between our two countries in achieving a similar result are the homogeneity of the population and the dysfunctional legacies of the apartheid past. Instead of homogeneity South Africa has diversity, which brings its own special challenges as does undoing the damage of the apartheid past.

I cannot emphasise enough that South Africa can only pull off the economic miracle if it can develop the human skills and a culture in which mathematics and science disciplines are automatic and natural. We need industry to play a role in this by generating more career spaces for those who do go into the sciences.

Furthermore, the future of our industries can only be secured with the influx of suitably qualified and skilled progression of workers in significant numbers. It is estimated that South Africa needs 40,000 engineers per annum for the foreseeable future to replace lost skills and provide the core disciplines that will drive the economy from a position of strength.

However, it would seem that youth today want easier routes to riches and these expectations need to be redirected.

The country also has a desperate need for skilled artisans and other technically oriented disciplines. The educational sector needs to be resourced and realigned as a matter of urgency to bring it more in line with expectations from industry. Failure to address this challenge will result in barriers to growth and lost opportunities continuing to frustrate the development agenda.

One of the breakaway groups will examine the Skills Availability and Human Resource Development issue and this will be invaluable to DST in formulating strategies and interventions to help bridge the skills barrier.

In the light of all the previous facts, the question is asked: What, therefore, is the challenge for Eastern Cape today?

Today the challenge for all stakeholders present is to unpack these technology themes to help DST determine where there is opportunity for action and implementation of technology support.

In closing, I would like to say that today presents us with an opportunity to arrive at a better understanding of how we can put technology to work in industry, in government and in society, and it particularly presents us with an opportunity to establish new partnerships and networks to drive actions that will remove obstacles to growth and development in the Province.

I thank you and wish you fruitful deliberations in the Technology Imbizo discussion groups.

Issued by: Ministry of Science and Technology
18 November 2003

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