SA spending more on research and development

Sunday, October 27, 2019

South Africa’s spending on research and development (R&D) continues to increase, although at a slower rate than before.

The 2017/18 National Research and Experimental Development Survey, published on 24 October, found that South Africa's gross expenditure on research and development (GERD) amounted to R38.725 billion in 2017/18, translating to a nominal 8.5% increase over the R35.693 billion recorded in 2016/17.

According to the survey, at constant 2010 prices, GERD grew by 3.1% year-on-year to reach the level of R25.963 billion.

“Although this was the seventh consecutive year in which South Africa's GERD has increased, following a contraction in 2009/10 and 2010/11, the growth in real terms shows a declining trend, especially when compared to the peak of 8.3% reported in 2014/15,” the report said.

GERD is an aggregated measure of in-house R&D expenditure performed domestically in five sectors, these include government, science councils, higher education institutions, the business sector and the not-for-profit sector.

GERD as a percentage of the country's gross domestic product (GDP), an indicator of R&D intensity, remained relatively unchanged, moving up one basis point from 0.82% in 2016/17 to 0.83% in 2017/18.

Conducted annually on behalf of the Department of Science and Innovation (DSI), the National R&D Survey provides statistics on the country's performance in terms of key indicators of R&D expenditure, investment and human resources.

It is undertaken by the Centre for Science, Technology and Innovation Indicators (CeSTII), which is located within the Human Sciences Research Council (HSRC), with support from Statistics South Africa.

The headcount of R&D personnel in the country increased by 4 233 (5.3%) to 84 262 in 2017/18, from 80 029 reported R&D personnel in 2016/17.

According to the report, the robust increase in R&D personnel reported since 2011 is mainly due to the net intake of researchers.

The ratio of full-time equivalent (FTE) researchers per 1 000 employed was 1.8, a modest shift from the 1.7 reported in 2015/16 and 2016/17.

“There is concern over the headcounts of technicians and other R&D staff, which have remained constant at around 11 300 and 11 600 respectively since 2012/13. The number of technicians, in particular, needs to expand given the requirements of the Fourth Industrial Revolution (4IR).

“There have been important shifts in the structure of South Africa's R&D system over the past decade and a half, notably with respect to the composition of R&D funding sources, R&D performing sectors, the role of R&D in the services sector, and the types of research being conducted,” the report said.

Government continues to be the largest source of funding

With regards to sources of funding for R&D, the report found that government continued to be the largest source of funding, contributing 46.7% of total investment in 2017/18, a trend that started in 2007/08. 

“The business sector is now in second place, contributing 41.5% of the country's GERD. Foreign sources provided 10.2%, with other local sources accounting for 1.6% of GERD,” the report said. 

While the business sector remained South Africa's largest R&D performer in 2017/18, at 41%, the report noted that its role has reduced compared to 2006/07, when it conducted 56% of R&D nationally. Over the same period, the higher education sector has increased its contribution from 20 to 37%. 

“The composition of business R&D has changed over time per major industrial category, mostly in line with broader changes in the structure of the economy. There have been robust increases in business expenditure on R&D (BERD) attributed to the services industries, while manufacturing and mining-related R&D has declined.

“R&D in the financial intermediation, real estate and business services sector now dominates, contributing about 48.8% of BERD in 2017/18. This sector's R&D spend has surpassed that of the manufacturing sector since 2011/12,” the report noted.

The National R&D Survey provides valuable information for understanding the trends in a vital part of the country's economic system.

The Department of Science and Innovation said it will undertake a deeper analysis of the results, and facilitate discussions with the relevant stakeholders, in order to “identify what can be done to maintain and improve the situation, especially given the intents of the 2019 White Paper on Science, Technology and Innovation”. –