Hon Chairperson

Right around the world, smart nations are making major investments in research, innovation and higher education. These national investment strategies grasp a fundamental truth about future prosperity and economic growth. It understands that research and innovation are central to national economic strength, job creation and global competitiveness.

This kind of approach to R&D and innovation should make a serious appeal to our government and funding priorities given the major problems in the country.

However, the Global Innovation Index 2014 ranked South Africa 53rd out of 143 countries and we are third on the continent behind Mauritius and the Seychelles.

In fact, South Africa’s relative position on the Global Innovation Index, Global Competitiveness Index and the Knowledge Economy Index has worsened over the past ten years.

We also have to deal with the devastating reality that we have 8.2 million people who are unemployed and the tragic part of this is that our youth are the worst affected.

This alone, besides all the other socioeconomic problems in the country should point spending arrows towards R&D and innovation.

As Sarah Wild in her book Innovation states, that to have a competitive advantage in the world of innovation, one has to have a strong patent output. The reality at the moment is that the balance of payments for technology is skewed towards the importing of technology. In 2013, South Africa paid $1.9 billion to use foreign technology, while it received $63 million in technology receipts. This indicates that we are a net importer of technology.

Minister, South Africa is, can and should be much better than that.

It is within this context that the budget of the Department of Science and Technology must be assessed. Science and Technology cannot be seen as a luxury or nice to have department working on a few esoteric projects which are deemed to be of limited application and value.

The truth is that science, technology and innovation as one of the most important drivers of economic growth.  And in a country such as ours, with the levels of unemployment there is, the Department of Science and Technology budget should be up there with Education and Health.

Let us look at this budget. The budget for the Department decreased from the 2015/16 of R7.48 billion to R7.429 billion. That represents a decrease of 6,86%.  The Cabinet has also approved reductions of R414 million in the Technology Innovation programme, the Research, Development and Support programme and the Socio-Economic Innovation Partnerships programme. In light of what I stated above, this should let the alarm bells ring. A country cannot afford to fall behind in the field of STI, as the cost to catch up, has to be measured not only in increased costs, but also missing out on innovation opportunities and knowledge acquisition. A case in point here is the SANSA satellite programme where it will take us ten years to catch up.

Government has set the target of raising gross expenditure on research and development to 1.5 per cent of GDP by 2019 from the current level of 0.76 per cent. This means an additional R115 billion is required. The Department’s contribution over the medium term will be R13,2 billion.

Unfortunately the current situation is that Government spends more money on R&D than the business sector. This has to change if we want to be competitive and I want to commend the Minister and the Department for the efforts made to improve the R&D Tax incentive scheme. Minister, the reports on the performance of the tax incentive scheme should be made available and acted upon as a matter of urgency.

As I have stated in previous budget debates, this is a department that is totally underfunded. Again the different entities reported to the Portfolio Committee that they do not have sufficient funds and that some of the projects could be at risk, but that they make adjustments as best they can. What is worse with this budget is that they now have to cope with an additional cut of R414 million.

The research councils have to increasingly rely on external funding to do research. This leads to the problem of whose research agenda will be followed. There are urgent problems that have to be researched such as the alleviation of poverty, unemployment and inequality, but the problem is that in many instances the donors determine the research agenda.

An additional problem is that because of the limited government funding for researchers, they have the added burden of having to source funding, writing time-consuming tender proposals and this takes up valuable research time. Often this makes it difficult for research councils to keep researchers as they can do better elsewhere as well as the country missing out on important and crucial innovation products and patents.

The question is, what can be done to ameliorate this situation?

Firstly we have to acknowledge that we have a well-functioning department and entities that fulfil their mandates as best they can with the little they have and in many instances achieving internationally recognised results.

However, we sit with a fragmented STI environment. R&D spent is spread over different departments with different research priorities and mandates.

Clearly there should be greater coordination between departments, but in reality this is seldom effective without the legal framework to administer this.

In the DA Innovation policy, we envisage policy reforms that will aim at harnessing South Africa’s intellectual assets, R&D and innovation investment and Research Infrastructure in a single Department of Post-School Education and Research and with a National Council on Research and Innovation.

South Africa’s success as a nation will be determined by the country’s ability to generate knowledge and ideas and to establish a post-school education environment that will equip students for meaningful economic participation. Our innovation system must provide the appropriate infrastructure, financial support and incentives to sustain every phase of the innovation process – from the original idea to the ultimate product.

But this budget creates tremendous challenges for the department. This budget is proof that the ANC government does not take the role and importance of Science, Technology and Innovation seriously.

To grow the economy and expand economic opportunities we must face these challenges head-on. The DA’s proposals can strengthen our post-school education and innovation systems and make them effective drivers for growth and development.