pre-feasibility assessment report - Innovationeasterncape.co.za

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African Development Economic ConsultantsADECfinancial contribution to South African R&D is comparable to that of someEuropean countries like the U.K. (50%), France (50%), and Germany (62%), butis lower than that of Japan or the USA (where the private sector accounts foralmost 70% of the research and development funding base and 80% of R&Dperformance).Private sector R&D funding increased by R1.7 billion in constant Rand or9.6% per year between 2003 and 2007. However, Government funding for R&Dhas increased at an even faster pace of 10.7% per year in constant Rand.Funding sourced from higher education increased by 8.4% per year over thissame period. All of this funding increased at a rate faster than that of inflation,which bodes well for R&D activities during this period. However, R&D fundingis likely to have been negatively impacted by the global recession and the creditcrunch, since R&D is typically among the first line items to be cut by industryand Government during an economic downturn. Non-profit organizations andNGOs had already cut back on funding during the 2003-2007 period, althoughfunding was inconsistent during this period.Funding by ProvincePrivate sector financial participation nationwide is far ahead of the level ofcontributions towards R&D at NMMU (currently averaging 2.3% of the researchfunding base). As detailed in the following table, research funding (most of itfrom the corporate sector) is concentrated in Gauteng Province. Gautengcaptured 31.7% or nearly one-third of R&D funding between 2004 and 2007. Bycomparison, Eastern Cape captured 11.9% on average but its share fell from15.1% to 10.7% during this period. Three years cannot be used to determinean overall long-term trend in funding, and EC funding did increase slightlybetween 2005/6 and 2006/7.Table 5. SHARE OF TOTAL RESEACH FUNDING BY PROVINCE, SOUTH AFRICA, 2004-2007Province 2004/5 (%) 2005/6 (%) 2006/7 (%) ChangeEastern Cape 15.1 10.0 10.7 -4.4Western Cape 25.6 28.4 25.2 -0.4Northern Cape 8.9 5.0 3.2 -5.7Gauteng 29.3 34.5 31.4 2.1Other 4 Provinces 21.1 22.1 29.5 8.4Totals 100.0 100.0 100.0Sources:Human Sciences Research Council of South Africa (HSRC) and ADEC.There is a need for research institutions like the NMMU (based outsideGauteng and Western Cape provinces) to attract and leverage the corporatesector on R&D. This funding can be leveraged by focusing on researchdisciplines where the region has a competitive advantage ahead of Gautengand Western Cape and their respective universities.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 50
African Development Economic ConsultantsADECFunding by ActivityResearch funding in South Africa is concentrated in Engineering (20.9%);Medical and Health Sciences (15.1%), Information, Communication andTechnology (14.0%); and Applied Sciences and Technology (11.0%). Smalleramounts of R&D funding are also targeted to the Physical (4.0%), Chemical(3.6%), and Material sciences (1.7%). The seven natural sciences, technology,and engineering disciplines received at least 70% of SA’s research fundingbetween 2003 and 2007.Table 6. SHARE OF TOTAL FUNDING TREND BY RESEARCH FIELD, SOUTH AFRICA, 2003-2007Research Field 2003/4 (%) 2004/5 (%) 2005/6 (%) 2006/7 (%) ChangeChemical Sciences 5.3 5.1 4.2 3.6 -1.7Physical Sciences 3.5 3.2 3.9 4.0 0.5Engineering Sciences 24.8 23.9 20.8 20.9 -3.9ICT 10.5 12.8 13.2 14.0 3.5AST 10.2 8.1 10.9 11.0 0.8M&HS 13.5 14.8 14.8 15.1 1.6Material Sciences 1.6 1.6 1.7 1.7 0.1Marine Sciences 0.6 0.5 0.4 0.4 -0.2Sub Total to NST&E 70.0 70.0 69.9 70.7 0.7Other Research Fields 30.0 30.0 30.1 29.3 -0.7TOTAL 100.0 100.0 100.0 100.0Notes:Sources:ICT is Information, Communication and Technology.AST is Applied Sciences and Technology.M&HS is Medical and Health Sciences.NST&E is Natural Sciences, Technology and Engineering.Human Sciences Resource Council of South Africa (HSRC) and ADEC.NMMU’s R&D strengths lie in the material sciences, energy, physicalsciences, engineering sciences (automotive), and chemical sciences. Whilsteach of these activities lies within the top seven research areas receiving R&Dfunding, there is significant variation between fields. For example, engineeringreceived 22.6% of all R&D funding between 2003 and 2007, whilst materialssciences received only 1.7% on average during this same period. The newnational thrust and focus on nanotechnologies is likely to result in growth infunding for Material Sciences as well as other research areas (such as Medicaland Health Sciences, Applied Sciences and Technology, and ICT), as well as inthose fields outside of the top seven (e.g., Aerospace and Military).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 51
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