pre-feasibility assessment report - Innovationeasterncape.co.za

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African Development Economic ConsultantsADECProprietary Contracts and Intellectual Property. One of the criticalfeatures for marketing the park to attract and recruit the full spectrum of targetindustries will be the contract relationships offered by NMMU and its scientificcommunity to access proprietary research being conducted by top academicscientists. Typically, universities enter into proprietary material transfer or patentlicense agreements as part of a research park lease contract that permits thetransfer of intellectual property for mutual benefit. The lease agreement ties thecorporate entity to pursue product commercialisation within the physicalconfines of the research park. This, in turn, enables take up of space within thepark itself.Access to Students. Also critical to marketing would be the access topostgraduate students provided for private partners. Access to (relatively lowcost)student researchers, interns, and apprentices is considered an importantmarketing tool for attracting private companies to university-related researchparks. Such access provides low-cost services from the “best and brightest”educated and interested staff who also hold potential as permanent employeesfor company recruitment. The university and its students also benefit becauseof the access to potential employers as well as hands-on experience providedto students. This collaboration clearly increases the university’s appeal andcompetitiveness for attracting good students.Access to Facilities and Equipment. The university also providesaccess to the use of facilities and specialized equipment by private partners.This is especially important in marketing the park to those companies thatrequire specialized equipment that is not otherwise available within the region,nationally, or internationally. Even relatively common equipment can beimportant to marketing for local or regional SMMEs and other companies thatwould not otherwise have access to such equipment due to cost. In somecases, there are also materials that the university purchases in bulk or gainsspecial license to handle that are not otherwise available to small or mediumsizedprivate companies. Further, the university can purchase certainequipment and materials in bulk or at lower cost, or in collaboration with privatepartners, thereby reducing the marginal cost to those working with them. In thepast, private companies also benefited from access to university libraries, whichprovided private researchers with materials to which they would otherwise lackaccess. Today, the Internet fosters much more rapid sharing of information andthe benefit of large institutional libraries has been diminished as a marketingincentive. However, access to university publication databases could be usedas a marketing tool for R&D companies.Role of Government and Private PartnersIndividual facilities such as Government research institutions wouldreceive direct funding from Government agencies along with participation inpatent commercialisation. Private institutes and corporate research facilitieswould be funded and managed by the private sponsors of those facilities.However, there is the opportunity for collaboration between NMMU, publicagencies, and private corporate sponsors for development and management ofresearch facilities.103 Algernon Road, Norwood (Johannesburg). Tel (011)728-1965 / 6690 Fax (011)728-8371Adec@ADEC1.com. Suite 131, Private Bag X5, Norwood 2117 SOUTH AFRICA 102
African Development Economic ConsultantsADECThere would also be a role for local and provincial government in theprovision and packaging of certain targeted fiscal, financial, regulatory, or otherincentives. Incentives based on level of investment and job creation potentialare most beneficial from an economic development perspective. Theappropriate package of incentives can best be determined based on thefindings of a financial feasibility (or sensitivity) analysis. These incentives wouldbe provided above and beyond the package of institutional “incentives” (such asproprietary contracts, access to university students, use of specializedequipment, etc.) as described aboveDevelopment Funding and PartneringA feasibility study is recommended to determine the appropriate financingstrategy, and to help inform the overall management structure. In essence, theproject should be led through a non-profit research and development park trust,as noted previously. This trust and its members would take responsibility forlobbying and fundraising in support of the park, not only for planning anddevelopment but also for ongoing operations and management. The trust mustbe established as a long-term and sustainable management entity.Conceptual Financing StructureNMMU would contribute land for the park as part of its equity contribution.National and provincial Government would have primary responsibility forfunding of bulk infrastructure, key research institutes, and for focusing certaincategory research within the park. A private Master Developer wouldtheoretically serve as equity partner or investor in the park infrastructure. TheTrust would lobby for and coordinate Government and private sector funding.Anchor research institutes would help secure the park for further marketing.Private sector entities would collaborate in development of research institutes,lease buildings, and purchase land for development of their own research andproduct development facilities.The income from these lease agreements and land sales couldtheoretically be used to pay Government and developer for debt service (and aprivate return) on bulk infrastructure. At completion of debt payments, furtherincome would be returned to the trust for park operations and furtherdevelopment. The university would benefit financially through proprietaryintellectual property agreements for sharing of patents and proceeds ofcommercialisation. Partners including Coega and UDDI would benefit throughindustrial spin-off and overall packaging and marketing advantages enhancedby the park. Again, these concepts would be tested through a feasibilityassessment.Economic DevelopmentThe R&D Park will have an important role in regional economicdevelopment. Linkages would be created between the R&D Park Trust andlocal and regional economic development agencies. The specific economic103 Algernon Road, Norwood (Johannesburg). Tel (011)728-1965 / 6690 Fax (011)728-8371Adec@ADEC1.com. Suite 131, Private Bag X5, Norwood 2117 SOUTH AFRICA 103
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