Mr Chairman,

Distinguished guests and colleagues,

Ladies and gentlemen.

Good morning.

It gives me great pleasure to witness the signing of the Memorandums of Agreement between the Tshumisano Trust, in collaboration with the Institute for Advanced Tooling (IAT), and the Tshwane University of Technology and the University of Stellenbosch respectively. This represents a milestone achievement in cementing crucial partnerships towards the creation of an effective innovation link between key research and development (R&D) institutions and the tooling industry.

As you are aware, the Tshumisano Trust is an initiative of the Department of Science and Technology (DST), which is aimed at strengthening and accelerating the interaction between Technikons and Small and Medium Enterprises (SME’s) in order to improve the competitiveness and innovation capacity of SME’s in selected sectors.

It is through agreements such as those entered into this morning that the Trust is able to facilitate further assistance to SMEs in order to stimulate economic growth and create more employment opportunities assist both students and small businesses to develop their ideas and designs into prototypes, and helps them to conduct their product quality tests to meet the SABS requirements.

This partnership takes us a long way forward towards addressing the technological and developmental challenges facing our tooling industry.

It is widely accepted that a country’s manufacturing sector is its primary vehicle for growth, and that the application of advanced manufacturing technologies and innovation strategies are essential ingredients to the achievement of global competitiveness. South Africa, as a developing knowledge economy, has increasingly been focusing over the past few decades on manufacturing excellence, development strategies and international competitiveness as part of the innovation process.

South Africa’s manufacturing sector currently constitutes about 25% of the economy’s total productive capacity, but the technology transfer flow between research activities design and development, to actual product manufacturing and sales is notoriously weak, which creates a very wide innovation chasm in this sector.

International experience indicates that design, one of the most powerful forms of embodied knowledge, should be seen as an indispensable value-adding factor in bridging this gap in the technology R&D and innovation process. Our own national studies and initiatives have also confirmed that industrial design should be a strong imperative in South Africa’s research, innovation and technology development and application plans.

According to a Fridge Study published recently by the Department of Trade and Industry, the South African tooling industry as it stands today is working significantly below capacity, and equipment is ageing. In addition, South Africa has lost considerable capacity in this field and is currently heavily dependent on imported tooling, currently standing at about R2 billion per annum. It is estimated that for every R1 million invested in toolmaking equipment and technology, over R250 million of components could be produced, making the industry a high value added catalyst in the South African economy.

However, it is clear that the South African tooling industry is presently seriously in decline. The reasons for this, reported in the Fridge Study, are due to:

The erosion of the skills base

Competition from global competitors

The lack of investment in capital equipment and associated ICT systems in the tooling industry since 1983.

The Department of Science and Technology, by funding the IATs, will make a valuable contribution towards turning the tide in this critical industry through skills development, enhanced R&D capacity and SMME competitiveness. The DST envisages a perfect fit for these Institutions with the Technology Station Programme, also run by the Tshumisano Trust

Besides contributing to the development of a knowledge base in South Africa, it is hoped that the IATs will act as an agent for BEE and contribute towards the transformation of the tooling industry. Over three quarters of the staff employed at these IATs are black. Eleven of the Tooling engineers who are currently working for the IATs obtained their advanced skills training at the Indo-German Tool Room in Aurangabad, India via a Project funded collectively by the DST, Western Cape Provincial Government and MERSETA. This inter-governmental collaboration underscores the critical importance of this industry. These linkages will be maintained going forward, as the possibilities to establish similar institutes in other provinces are being explored.

In order to align the activities of the IATs with the industry, the input of the Tooling Association of South Africa (TASA) has been sought. I am very pleased to note that TASA members are present at this Agreements ceremony.

The initiative to establish the Institutes for Advanced Tooling presents an opportunity to DST to play a role in the development of a core industry, an industry that is paramount to the growth of the automotive industry, the second biggest employer in the country.

Ladies and gentlemen, the challenge now is to maintain a sharp focus on the implementation of the IAT model by delving deep into the finer details of what needs to be done to ensure that all the mechanisms are put in place as planned.

This is no small task in itself, and that is why in closing I would like to pay tribute to the team and all role players who thus far contributed and will continue to play a crucial role in the development of the IATs through all their hard work and dedication. In particular I would like to thank the Tshumisano Trust, the Tshwane University of Technology and the University of Stellenbosch, who will play the key implementing roles in the development of the IATs, for their initiative, contributions and continued commitment. From the DST, I would also like to thank Dr Nawaz Mahomed for his vision and his dedication to this initiative.

Please be assured that this venture enjoys the full and continued support of my Department.

I thank you.