THE Department of Science and Technology is hoping that an investment of millions of rand to help eight industry sectors become more competitive will spur companies to spend more on research and development.
Investment in research and development will prove crucial for companies to stay ahead of global competitors. The private sector could spend far more, accounting for only 40% of research and development spending, Science and Technology Minister Naledi Pandor says.
The department began piloting sector innovation funds in 2013 with nine industry organisations. It identifies funding priorities, and can seek help from universities and research agencies. Six organisations representing the citrus, fresh fruit, forestry, wine, minerals processing, and sugar-milling sectors are involved in research projects.
The boat-building and paper-manufacturing industries intend gearing up for involvement in the initiative; and the aquaculture sector was last year excluded by the department on concerns that its industry association was not equipped to administer funding.
The department’s deputy director-general of socioeconomic innovation partnerships, Imraan Patel, says the department contributed R139m to the nine funds and industry added a further R53m — 40c for every R1 of public spending. There are 104 students being funded to conduct research for industry. The sector-innovation funds sprang out of two public-private partnerships in which the department was involved — the South African Mining to Minerals Research Initiative, in which several mining houses and the University of Cape Town participated; and the Post-Harvest Innovation initiative with the Fresh Produce Exporters’ Forum, which the department has funded since 2008.
In 2013, when the department put out a call for the sector innovation fund, 34 industry organisations responded. An inter-ministerial panel spent a year assessing each application and audited the organisations to ensure that they had proper governance in place to deal with public funds.
Patel says although the department has a representative on every panel and keeps performance scorecards, each industry decides which research should be conducted. Patel says the department closed the aquaculture fund as it believed the organisation representing the industry was unable to provide sufficient oversight to evaluate project applications, and because of a lack of funding from the industry.
He ascribes this to the industry being relatively new.
Marine Finfish Farmers Association of SA chairman Andre Bok says the industry will gain from the department’s investment in the research.
Citrus producers recently launched a beta version of an electronic platform that has helped streamline the paperwork required for exporting their products. Producers began trials of a three-year PhytClean project to develop an integrated information platform last September, Citrus Research International research head Tim Grout says.
The platform, one of 10 projects funded by the Research for Citrus Exports Sector Innovation Fund, integrates data from the Perishable Export Commodities Board, the Department of Agriculture, Forestry and Fisheries and the Citrus Growers Association.
Funded with R11.8m, it will help citrus producers and exporters make savings of up to R236m over five years, mainly through reduced time delays during inspections. Another database aimed at helping to forecast black-spot disease, based on weather conditions, is also being developed. This is the first such integrated system for the citrus industry since its deregulation in 1994. The project is critical as exports account for about 80% of the sector’s revenue.
The establishment of a biocontrol research and development facility by the forestry sector innovation fund to tackle invasive pests is expected to reap significant savings for the sector.
Forestry SA’s research director Ronald Heath says the facility is expected to have a significant effect, as annually about R392m of round wood, and a further R2.06bn in additional downstream processing, are lost due to pests and diseases. The initiative, one of 10 projects being supported by the fund, will help more than 24,000 small growers whose crops are most vulnerable to diseases.
The department has contributed R5m to the facility, Heath says, while the industry contributes about R8m annually to the pest and disease programme.
The Department of Science and Technology will pilot the sector innovation funds until March 2018, and hopes to then approach the Treasury for increased funding.
Patel says that it often takes one or two decades before the effect of research investment commences to show results.
Mining companies are cutting research spending in response to the depressed global resources market. South African Mining to Minerals Research Initiative CEO Cyril O’Connor believes the R3m from the department, complemented by R1.6m from the mining industry, will assist in developing valuable human capacity, as 28 postgraduate students are being funded.
The sugar industry is also using the funding to boost research capacity. “It has enabled us to collaborate with a much broader range of researchers,” says the Sugar Milling Research Institute’s Step Bio innovation fund head, Steve Davis. The Department of Science and Technology committed R15m, which has been complemented by R29m from the sugar industry to assist five projects aimed at improving the energy efficiency of mills.