Ladies and Gentlemen

In England, Sally Broom started a travel website that linked travellers with trusted local contacts; called it "a friend at the other end" and founded a business in safe travel that is now successful in 40 countries. Stevan Taylor discovered that there were no convenience foods that catered for his and his partner's ethical and dietary requirements.  So he founded "Foodamentalists", and has been shortlisted as one of the Top 10 UKTV Local Food Heroes for the North West – in his first year of trading! In Durban, Richard Schulz and the team at Adept Airmotive have designed a lightweight aircraft engine that is 30% more fuel-efficient than existing engines. In Cape Town, Kobus Meiring and his team from Optimal Energy have prototyped the Joule, South Africa's first home-built electric car – a vehicle that operates without polluting our fragile environment. In Durban, Richard Schulz and the team at Adept Airmotive have designed a lightweight aircraft engine that is 30% more fuel-efficient than existing engines

These are inspiring stories, and they have something in common – they are all good ideas strongly linked to entrepreneurship and sound business sense. These initiatives are the result, firstly, of innovative research and, secondly, the effective commercialisation of ideas rich in promise.

It is, if you like "marketable innovation", and our country needs as much of it as it can get.

As an engine of economic growth, technology is playing an increasingly important role in the nation's ability to prosper and grow. Innovation is widely recognised as one of the most important mechanisms through which technology can be leveraged to create wealth, leap-frog developmental backlogs and contribute towards a better quality of life.

It goes without saying that the National System of Innovation (NSI) recognizes the importance of technological innovation for the competitiveness of South African firms and consequently the growth of the economy.

We are also aware of the growing importance of non-technological innovation such as design, implementation of new organisational strategies and changes in the concepts of marketing. In line with international trends, the services sector of the economy continues to show strong growth, and this can be attributed to high levels of innovation in South Africa and encouragingly these innovation activities include significant R&D expenditure.

But what exactly is this innovation thing that we are trying to measure and do more of? Simply put, it is about doing new things; smart things in smart ways. In the context of a governmental promoted system of innovation, the focus must be on finding smart ways of achieving our goals; in a nutshell, accelerated and sustained economic growth and overcoming poverty.

In order for us to further promote the NSI and create an enabling regime that supports and encourages innovation, it is absolutely essential to have a clear understanding of the processes underlying innovation in South African firms. To this end, in 2004 the DST commissioned the Centre for Science, Technology and Innovation Indicators (CeSTII) of the HSRC to undertake South Africa’s first official Innovation Survey.

Some of the findings are as follows: Innovation Survey reports that nearly 52% of enterprises surveyed reported innovative activity in the form of the development of new products and processes. This is against a background of a general increase in economic activity in South Africa over the past few years. It shows that our private enterprises are not being complacent and are responding to changes in their environment by producing new or significantly changed goods, services and processes. Our rate of innovation is well above that of the European average of 42% for 2004.  A welcome finding indeed.

Secondly, South African enterprises spent about R27.8 billion on innovation activities in 2004. This expenditure comprised in-house R&D expenditure, outsourced R&D, acquisition of machinery, equipment, software and the acquisition of other external knowledge such as copyrights. Furthermore, in-house R&D expenditure accounted for about 20% of total innovation expenditure. This is especially encouraging since the total R&D expenditure recorded was basically the same as that recorded for the same sectors in the 2004 national R&D survey. Bearing in mind that the innovation survey is a random sample of business enterprises and is not focused on R&D or technology orientated firms this result serves to confirm the importance of R&D for the competitiveness of business in the country.

The HSRC will soon finalise the country’s second Innovation Survey (2005-2007) and the DST will report on the finding in February 2010 result

The government as a whole, and more specifically, the Department of Science and Technology, has been motivating the importance of innovation since before the Cabinet approved the White Paper on Science and Technology in 1996. The lack of innovation, and the stimulation and encouragement of innovation, were identified as weaknesses in South Africa's economic armoury. Particularly worrisome was the fact that promising research conducted through our leading universities and science councils was seldom transformed into marketable commodities – products, services, technologies, new industries or exports.

This lack of take-up was labelled the "innovation gap", and it became one of government's priority tasks to bridge that gap, or, in other words, to make it easier for people with good ideas to grow these ideas into saleable commodities and propositions.

In order to achieve this, certain institutional and legislative measures were necessary – measures that would stimulate and support entrepreneurial activities, specifically research and development activities, the management of intellectual property rights, and technology commercialisation.

Passed last year, the Intellectual Property Rights from Publicly Financed Research and Development Act is intended to create a climate conducive to creative thinking and a win-win environment for our entrepreneurs and innovators by enabling them to work effectively with researchers at universities and research institutions.

As many of you will know, we are currently in the process of setting up the Technology Innovation Agency, or TIA, to encourage and enable the nation's entrepreneurs, creative and inventive industries, and academic and research institutions, to develop novel technologies, to innovate, create and commercialise original ideas for both local and export markets.  This emphasis on exports is simply because South Africa, on a global scale, is a relatively small market, and geographically we are at a distance from the major markets such as Europe, the Americas and Asia.  Ideally, we need entrepreneurs with the mindset and capability to innovate at the cutting edge of science and technology, and then be able to take the finished, high-tech products to the global market, and compete successfully there while creating jobs here at home.

The TIA will focus predominantly on providing both financial and non-financial support towards technology development, prototyping, piloting and proof of concept for innovative technologies, including support for commercialisation.

Another important issue is that of collaboration. For some reason, many of our institutions, both academic and private, appear to believe that their work involves some sort of competition – rather like a Premier League of Innovation – in terms of which there can only be one winner at the end of each season, and the aim is to knock the other competitors out of the contest.  It is hard to visualise a scenario designed to bring about a worse outcome. The only prizes in this event go to the collaborators. There are no trophies for going it alone.

This mindset has been identified as our Achilles heel.  It is a decided weakness and must be addressed, particularly as regards the weak relationship between academia and industry.

One of the main causes for lack of collaboration is that technologies are predominantly imported, or we assemble those technologies as second or third parties. Often the original knowledge owners have close ties with academic or research organisations back home, and feel there is no pressing need to collaborate with our local institutions.  But this does not fully explain why our indigenous institutions are not putting that many technologies onto the market.

To counter these weaknesses, and to capitalise on our strengths, the Department of Science and Technology has designed the centre of competence model, which will provide what we call "glue funding" to bring together industry, academic and research and development institutions with the specific aim of collaborating on technology development and commercialisation.  The centres of competence will bring together complementary expertise and capabilities, including patents, people, skills and infrastructure, together with knowledge of the markets.  The Department has already conceptualised centres of competence in the areas of biotechnology and health; drug discovery for diseases such as TB and malaria; titanium beneficiation; fluorochemicals; and hydrogen and fuel cells – all in line with national strategies.  And there are more on the way.

The CoC programme will be managed under the TIA umbrella, and is regarded as one of our innovative programmes to foster collaboration between industry, and academic and research organisations, and so fast-track the rate of commercialisation of technologies that have the potential to make an economic or social impact in our country.

The CoC programme will also facilitate the mechanism for international technology development cooperation, especially with imported technologies, where it is believed that our country can build on or improve on existing international knowledge.

The key to the success of the CoC programme is the ongoing development of the skills of our people, especially the youth, and particularly in the areas of science, engineering and technology.  This is why one of the funding conditions for the CoCs is the development of skills applicable to the centre's specific technology area.

You will gather from these developments that the DST attaches enormous importance to the concept of  innovation, and the principle of always searching for better ways of doing things. And that is why we are so interested in events like this.  The organisers of this conference also see a need to promote collaboration between industry, and academic and research institutions, with particular reference to the need for innovation and entrepreneurship to address the developmental challenges faced by the nation.

This event is the first of its kind in South Africa, and I sincerely hope it will not be the last.  The Development Bank is to be congratulated on its prescience, and on the fact that it is hosting this event in parallel with Global Entrepreneurship Week, which is being marked in a number of countries at the same time. The Global Entrepreneurship movement was inspired by the success of Enterprise Week, which started in the United Kingdom in 2004, and has been running successfully ever since.

Apart from anything else, this means that we are not alone in recognising the value of encouraging original thinking by talented minds to confront known problems, with a view not only to solving these problems, but also to establishing viable enterprises, ideally with export potential, on the strength of the solutions, thus creating jobs for a skilled workforce.

I sense that such minds are here with us today, and I challenge you, for a start, to do some critical thinking about our approach to the promotion of innovation, to see whether you can come up with any improvements – possibly an innovation that has not occurred to us – and after that to consult with some of the other entrepreneurs and business people here, in order to establish a collaborative venture that will benefit you, your partner, and your country.

Thank you.