Research and development (R&D) targets

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SA fails to reach research and development goals

South Africa has once again failed to meet its ambitious research and development (R&D) targets, with the percentage of gross domestic product spend on R&D stagnating at 0.76%. This puts total R&D spend for 2012-2013 at about R24-billion.

Government is the largest funder of R&D in the country, at 45%, with industry lagging at 38%, according to the latest annual R&D survey undertaken by the Centre for Science, Technology and Innovation Indicators at the Human Sciences Research Council.

R&D spend is considered an important measure of a country’s ability to compete internationally, and offer new products and grow – factors that link into an increased capacity to create jobs.

Area for concern
The department of science and technology on Wednesday maintained that the spend was “improving following the contraction in the two consecutive years, 2009-2010 and 2010-2011. Gross domestic expenditure on research and development amounted to R23.871-billion, an increase of R1.662-billion (9.7%) on the R22.209-billion reported in 2011. It has increased in both nominal and real terms”.

The percentage of GDP spent on research has been flagged by the ANC as an area for concern and the party is pushing for 1.5%, which is almost double the 0.76% achieved in 2012-2013.

In context, keeping the percentage of GDP spend static is a victory at a time when the treasury is preaching fiscal austerity. According to the executive summary of the report: “The trend shows that gross domestic expenditure on research and development as a percentage of GDP increased from 0.6% in 1997-1998, peaked at 0.95% in 2006-2007, and declined until it reached 0.76%, where is has remained for three consecutive years.”

The average for Organisation for Economic Co-operation and Development countries is about 2.4%, which means that South Africa struggles to compete with these countries and is on the technological back foot. Other emerging countries, such as some of South Africa’s Brics partners (Brazil, Russia, India and China) also have substantially higher GDP-spend percentages.

But a major source of concern is business’s reticence to undertake research in the country. While internationally and at home R&D spend took a dip owing to the 2008 financial crisis, the South African business sector’s investments have not recovered.

Its R&D spend was R10.571-billion in 2012-2013, which represents a decline of almost 4% between 2011-2012 and 2012-2013. Also notable was that business mostly undertook this research within the business sector (rather than in universities) and that the majority was spent on financial intermediation, real estate and business services, rather than the beleaguered manufacturing sector, which was once business’s R&D mainstay.

The good news is that the R&D personnel headcount increased by 9.1%, from 59 489 in 2011-2012 to 64 917 in 2012-2013, mainly owing to more researchers undertaking research at higher education institutions.

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