South Africa’s Investment in Research and Development on the Rise

22 June 2006

South Africa spent about R12 billion, or 0.87% of GDP, on research and experimental development (R&D) in 2003/04. This is according to the national Survey of financial and human resource inputs into R&D, undertaken by the Centre for Science, Technology and Innovation Indicators (CeSTII) of the HSRC Knowledge Systems Group based in Cape Town. The Survey was commissioned by the Department of Science and Technology (DST) and follows that of 2003/04.

The 2004/05 figure represents an improvement on the situation reported in the 2003/04 R&D survey, which recorded R&D expenditure as R10.1 billion, or 0.81% of GDP.

The Survey was carried out according to the guidelines provided by the Organisation for Economic Co-operation and Development (OECD) Frascati Manual and in consultation with national and international experts in the field, through the OECD working party of National Experts on Science and Technology Indicators (NESTI) in which South Africa has observer status.

The intensity of R&D expenditure (measured as the percentage of GDP spent on R&D) is a good indication of the competitiveness of a country’s economy. The OECD country with the highest R&D intensity is Sweden (3.98% of GDP), followed by Finland (3.48%). The United States R&D expenditure measured 2.68% and the average for the 25 European Union (expanded) member states was 1.82%. The European Union has set a goal of achieving an average R&D expenditure of 3% of GDP by the year 2010. South Africa has set a goal of achieving R&D expenditure equivalent to 1% of GDP by the year 2008.

Estimates of annual GDP are retrospectively revised at five-year intervals. Consequently, the time series of R&D expenditure to GDP must also be revised. As a result of these revisions these ratios for the Surveys of 2001/02 and 2003/04 are now recorded as 0.73% and 0.81% respectively. Going back further one finds that the re- based time series attained a maximum value of 0.84% in 1991/92. The 2004/05 ratio of 0.87% is thus the highest level yet recorded for South Africa.

In comparison with other developing countries that provide R&D data to the OECD, South Africa spends proportionately more on R&D than Argentina (0.44%) and Greece (0.62%) but less than China (1.44%) and the Russian Federation (1.17%).

The R&D Survey involved comprehensive surveys of business, government (including the nine science councils such as the CSIR, HSRC and MRC), higher education and the non-profit sectors. Survey coverage of the business sector was significantly improved especially in the service sector, and small and medium sized companies. As from 2005 the Survey is conducted annually, which is in line with OECD practice.

The results of the South African R&D Surveys are now published twice yearly in the internationally authoritative OECD Main Science and Technology Indicators. In July 2005, Statistics South Africa accredited the results of the R&D Survey from 2001/02 onwards. This process of accreditation has resulted in R&D Survey results being recognised as Official Statistics of the National Statistics System as is the practice in OECD countries.

South Africa has a total of 29 692 full time equivalent (FTE) R&D personnel, comprising researchers, technicians and other support staff. About 60% of these personnel comprise the 17 910 FTE researchers or academically qualified people who perform, manage and guide the process of undertaking research that leads to new knowledge and novel research findings. While South Africa’s R&D expenditure is fairly high compared to that of other developing countries, the total number of researchers expressed as the number of researchers per thousand total employed is low at 1.6 researchers per thousand total employment. Comparative figures are Argentina 1.8, Russian Federation 7.1 and China 1.2 researchers per thousand total employment.

The demographic profile of researchers in South Africa is changing. Women researchers now comprise 38.3% of the total researchers compared to 11.6% in Japan, and 29.4% in Norway. In developing countries Argentina leads the way with 50.9% women researchers.

Most South African R&D is performed in the major research field of engineering sciences (comprising 23.9% of total R&D), followed by the natural sciences (20.8%) and the medical and health sciences (14.8%).

The business sector is the major performer and financier of R&D in the country and performs 58% of all R&D undertaken, while financing 45% of total R&D. The higher education sector undertakes 21.1% of national R&D while government (including the science councils) performs 20.9% of the total but finances 32.1% of R&D. About 15% of South Africa’s R&D is financed from abroad.

Altogether about 18.6% of total R&D performed in the country comprised basic research representing an expenditure on basic research of about 0.16% of GDP. Japan spends 0.40% of GDP on basic research and the figure for South Korea is 0.38%. The US spends 0.50% of GDP on basic research.

It is important to have a strong basic research component in a country’s national system of innovation in order to challenge and train new researchers. Basic research is also important in that it provides the inputs to applied research and experimental development for which there are several important funding sources in South Africa such as the Innovation Fund, THRIP, the Competitiveness Fund, the Support Programme for Industrial Innovation, and other national funding programmes and international sources such as the EU 6th Framework Programme for Research.

Applied research and experimental development contribute to economic development by providing new R&D based products and processes with potential for introduction to the market. The strengthening of the R&D system through national policies and mechanisms including special support for cooperation across what is termed the ‘triple helix’ of business, government and higher education sectors can only lead to a more competitive international position through R&D based innovation and there is now sufficient empirical evidence in the world to support this notion.

Issued by the Department of Science and Technology.

For media enquiries, please contact:
Nhlanhla Nyide
Chief Director: Science Communication, Department of Science and Technology
Cell: +27 (0) 82 871 6767
Email: nhlanhla.nyide@dst.gov.za

Kristin Klose
Manager: Communication, Department of Science and Technology
Cell: +27 (0) 82 902 9503
Email: kristin.klose@dst.gov.za

SA Science and Technology Ministry:
Nelvis Qekema
Ministerial Liaison
Cell: +27 (0) 82 571 2571
Email: nelvis.qekema@dst.gov.za

For more information about the survey, please contact:
Charles Makonoto
Ministerial Liaison
Tel: +27 (012) 843 6499
Email: Charles.makonoto@dst.gov.za