Five things you should know about SA innovation policy
Rob Turrell |
20 January 2020
Rob Turrell says over last 25 years there has not been any serious attempt to put innovation at heart of economic strategy
Five things you should know about SA innovation policy
20 January 2020
The Italian-American economist Mariana Mazzacuto joined President Ramaphosa’s economic advisory group recently. She is the latest in a long line of rockstar economists, including Nobel prize winner Joseph Stieglitz and former Venezuelan finance minister Ricardo Haussmann, to offer policy advice to the South African cabinet.
Will her advice gain traction where theirs fell on deaf ears? She is the first innovation policy expert to join, having made an international reputation through championing the role of the state in promoting innovation in her book, The Entrepreneurial State: Debunking Public vs. Private Sector Myths (2013), by looking at the early history of some global tech companies and finding critical seed investment from the state in every case. On the face of it, her approach would appear to fit perfectly with the ideology of a developmental state that is deeply embedded in government economic policy. Yet her recent book on reframing capitalism, The Value of Everything: Making and Taking in the Global Economy (2018), is about how to create wealth rather than redistribute wealth and this flies in the face of another deeply embedded ideology in government economic policy.
Over the last twenty-five years there has never been any serious attempt to put innovation policy at the heart of government economic strategy. From the global collapse in 2008 and the golden opportunity to stimulate the economy through investing massively in R&D to the contemporary crisis over climate change, energy and inequality, innovation policy has been only notable by its absence. So what can Mariana Mazzacuto do to design our innovation policy?
1 South Africa doesn’t have an innovation policy
The Department of Science and Technology (DST) is in charge of South Africa’s innovation policy outlined in the Ten Year Innovation Plan (2008). But the Plan was not an innovation policy at all. Instead the Plan was focussed on five ‘grand challenge’ research fields - global change, renewable energy, space science, the bio-economy, and the human sciences - that the National Research Foundation funded sporadically over the decade ending 2018. These ‘grand challenges’ were a set of broad ‘target areas’ for R&D resource allocation that were added on to the geographic and knowledge advantage areas already set out in the National Research and Development Strategy (2002).
Other countries have also designated “grand challenges” in policy documents. The US invests in space applications, clean energy, biotechnology, and educational technologies. The Canadians invest in the environment, natural resources and energy, health sciences, and information and communication technologies. The UK invests in energy, the environment, lifelong health, and global security. These are not simply grand challenges. They are global challenges that require global collaboration. Countries vary in the amount of budget allocated to these grand challenge focus areas, but they are typically a fifth to a quarter of science budgets.
However, innovation is not primarily about the generation of new ideas, which is what science and research policies are about, but innovation is about commercializing new ideas to make companies more competitive. Innovation is a process of discovery, engineering and transformation.
2 South Africa has a science and research policy
South Africa has an effective science and research strategy that has three key strands. First, the DST invests in basic research in universities and public entities (including science councils) that produce publications and patents – which is how we measure the impact of investment in research and development - and train scientists, engineers and technologists. Second, the DST offers a R&D tax incentive to companies. It’s well known that many more companies could apply for the tax credit. Third, the DST invests in national priority areas that aim to catalyse leading-edge research.
South Africa had a separate department of science and technology for over fifteen years. A CHE review has credited it with major successes. For one, research output has improved, spectacularly in some fields like astronomy, because of the DST’s success in winning the bid to host the SKA, a mega science and infrastructure radio-astronomy project. For another, the number of science, engineering and technology graduates has increased, not as impressively as targeted, but the number of PhDs has, with the milestone of more black than white PhD graduates reached in 2016.
3 South Africa doesn’t have a national innovation system
Government is proud of the idea that South Africa was one of the first countries to put into place a national innovation system. Alas it’s a fiction. The concept was all the rage in OECD innovation policy in the 1990s and South Africa did adopt the concept. But that’s not to say that most OECD countries did not already have such an innovation ecosystem in place. South Africa failed to grasp that a national innovation system is not centrally concerned with funding a public research system, that universities and research are not at the heart of a national innovation system. The DST research system is science and not technology based. An adequate innovation system would offer policies and levers to support innovation in domestic companies, innovation in management, systems products and product design, marketing, exports, and so on.
Many countries have national agencies with a clear remit for enterprise capability building and industry transformation. These include Britain’s InnovateUK, Finland’s Tekes, Netherlands TNO and Enterprise Ireland. These agencies variously combine initiatives in business innovation, research and development funding, research commercialization, knowledge transfer, trade facilitation and foreign direct investment.
Moreover, our regional and local innovation systems are undeveloped. Countries, cities and regions increasingly recognise the significance of local innovation ecosystems in accessing global markets and value chains. They support the clustering of technological and creative talent through incubators, accelerators and co-working spaces, entrepreneurship training and connections with research organisations and venture capital. Silicon Valley dominates as an innovation ecosystem, but cities and regions as diverse as Boston (US), Chicago (US), Austin (US), Tel Aviv (Israel), London (UK), Amsterdam (Netherlands), Berlin (Germany), Sao Paulo (Brazil) and Bangalore (India) are growing rapidly.
We do have the Technology Innovation Agency, recently strengthening in an arrangement with the CSIR. However, it was mired in controversy even before Mamphele Ramphele became it’s chair. It was a merger of biotech agencies and has been unable to provide a funding umbrella to a wider range of R&D areas.
5 South Africa has one mission-type innovation project: the Square Kilometer Array (SKA)
There are three main types of innovation policy: invention, system, mission. Invention-oriented policies have a narrow focus, in the sense that they concentrate on the R&D/invention phase, and leave the possible exploitation and diffusion of the invention to the market. System-oriented policies are of more recent origin and focus, as the term suggests, on system-level features, such as the degree of interaction between different parts of the system. Mission-oriented policies are aimed at providing new solutions to specific political challenges. They take all phases of the innovation process into account when designing and implementing policy. The moon shot was one. Building the atom bomb was another. The brain initiative is a one that President Obama initiated.
The EU has long framed its policies as grand challenges, but in 2017 Mariana Mazzacuto reframed the EU’s research and innovation programme in terms of a mission approach. She chose the following five missions: adaptation to climate change; cancer; healthy oceans, seas, coastal and inland waters; climate-neutral and smart cities; and soil health and food. Missions are not grand challenges, she said: “they must be bold and inspire citizens; be ambitious and risky; have a clear target and deadline ... be cross-disciplinary and cross-sectorial (eradicating cancer, for example, would require innovation in healthcare, nutrition, artificial intelligence and pharmaceuticals); and allow for experimentation and multiple attempts at a solution, rather than be micromanaged top-down by a government.”
The SKA is a mission project. It is not simply an astronomy project. Or a big science project. Or an infrastructure project. It is certainly a global infrastructure project and there are activities in some 20 countries on 5 continents. Total project costs will run into billions of Euros, with much being spent on relaying, storing and analysing the data captured by the antennae - a task that will require processing power estimated to be equal to several millions of today’s fastest computers.
SKA is to some extent an IT project with an astronomy question as a driver. It's an IT project of the kind that pushes the boundaries of global technology. Big tech companies are already involved because they know it will allow them to develop the knowledge and technologies that will keep them at the leading edge of computing. This in turn will benefit computer users in many spheres from finance to government through industry and medicine to other science researchers.
SKA challenges big data to the extreme. All science pushes the boundaries of knowledge but big science like SKA has the ambition to push those boundaries on the largest scale imaginable.
The electric car called Joule was a mission type project. The Pebble Bed Modular Reactor was also a mission-type project. Why both these projects failed have yet be revealed at the Zondo commission.
Mazzacuto has much to offer but will be easy to ignore. A decade ago Itumeleng Mahabane, now partner in the advisory firm Brunswick, then a Business Day columnist, predicted a grim economic future if innovation, competition and productivity were not integrated into macro economic policy - “One never hears about the idea of innovation in any of the government's economic strategies”. No action has been taken. Political analyst RW Johnson wonders why the ANC is so committed to a policy of drift, but retired judge Rex van Schalkwyk is surely correct when he talks about economic policy by design. We are in a situation similar to the one in Martin Scorsese’s Netflix film, The Irishman, where Russell Bufalino (Sam Pesci) convinces Frank Sheeran (Robert de Niro) to murder Jimmy Hoffa (Al Pacino): “It is what it is”, says Sam. “It is what it is,” responds de Niro. And again. Over and over. Again.
Rob Turrell worked in the Ministry of Science and Technology (2009-2012) and (2014-2018)