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Annual Report 2000/2001 - Introduction

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Introduction

Looking back over the past year there have been notable successes within the very diverse DACST portfolio. These range from the recognition of cultural industries in job creation to large-scale leveraging of international resources in equipment-intensive research programmes. The key challenges for the portfolio as whole have been (i)the development of a cooperative approach to corporate governance (how to play as a team within the performing arts sector or the research sector) and (ii) how to contribute towards and be leveraged by wider government-led programmes in a coordinated manner (fitting into the so-called cluster system).

In the technology sector there are key indicators which we will need to address in the medium term as a country. Some of these are
  • The relatively large annual technology balance of payments deficit (R1,5 billion);
  • The low number of researchers as a percentage of the workforce (0,07%) in comparison with international norms (Spain = 0,3%, Australia = 0,7%);
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  • The relatively low percentage of GDP spent on research and development (0,7%, OECD average = 2,15%);
  • The extremely low rate of formation of biotechnology companies.


In the area of arts and culture, there are some central issues where government needs to provide leadership:
  • The search for a new national artistic identity in the context of relatively static resources;
  • The creation of a robust intellectual property framework for artists;
  • The translation of theory into action in terms of the contribution of the cultural industries to job creation.


Regarding language the main issue is how to give practical expression to the constitutional requirement for linguistic parity and diversity within an era of globalization and fiscal constraints.

Corporate Governance
The past year has seen significant changes in how DACST views itself. We are a Department which spends approximately 90% of our roughly R1 billion budget on external rather than internal programmes. The institutions that lie within DACST's ambit and that receive subsidies from this 90% range from organizations performing scientific research, to the Pan South African Language Board, to museums and performing arts bodies. To create coherence in an extremely diverse portfolio we have begun to develop a common fabric of institutional governance.

The tendency in the past was to draw a line between the Department and its associated institutions. What went on beyond this line was none of our business, as long as the very broad policy framework was in place. Recent difficulties (for example at the State Theatre) and triumphs (for example the establishment of the SA Large Telescope) have brought home the advantages of working in an integrated way and the disadvantages of not doing so. The creation of the posts of Chief Financial Officer (at the level of Deputy Director-General) and of Director: Arts Institutional Governance underscores our commitment towards responsible governance within a policy framework and subject to the Public Finance Management Act.

A recent study commissioned by us to determine progress in transformation across our portfolio indicates that since 1994 the average percentage of blacks in senior management positions in science councils has risen from under 4% to 28%. The performing arts institutions are more or less in line with this figure, but the various heritage institutions (with the exception of the Robben Island Museum) do less well. It is imperative that a ring-fenced transformation budget be allocated to deal with this issue in a coordinated way. Within DACST itself the percentage of black managers is over 70%, which underscores the need for government to play a leading role in the parastatal sector too.

DACST within the cluster system of government
During the 2000/2001 financial year the business of government became increasingly organized into clusters of departments cooperating to achieve aggregate objectives. From the perspective of the Department of Arts, Culture, Science and Technology, the key clusters are (i) the Economic, (ii) the Social and (iii) the International Relations, Peace and Security clusters. Towards the end of 1999 customer-focused business units dedicated to these three clusters were conceptualized. The appointment of key managers to operationalize these units took place during the financial year being reported on. It is still too early to pronounce on the success of this management framework. Nevertheless, it will be used as the basis for describing a range of thrusts (by no means exhaustive), selected to illustrate the work of the Department.

Economic Cluster
The 2000/2001 financial year saw the recognition of both the cultural and the scientific legs of the Department from the perspective of economic strategy. At the January 2001 Cabinet Lekgotla it was affirmed that cultural industries such as crafts, music and film would in future be embedded in economic programmes from the twin perspectives of growth and job creation. It has become increasingly apparent that the cultural industries can play as important a role in catch-up economies as more traditional industries such as mining and agriculture. Countries as diverse as Sweden and Mexico provide sustained evidence of this. Also at the January Lekgotla it was affirmed that research and development (R&D), together with infrastructure and human resources, was the key cross-cutting ingredient in economic growth. It is an obvious but infrequently articulated fact that rapidly developing sectors of the economy are more heavily dependent on research than highly evolved and mature sectors. During the past five years we have witnessed the phenomenal impact of information technology and more recently of biotechnology on the global economy. Clearly the implication is that indigenous R&D in these sectors must be escalated to meet these challenges.

Some of the key programmes that illustrate the work underpinning our contribution to this cluster over the past year have been:
  • Sustaining the national research and development base
The strong leveraging effect of research and development on economies has been advocated anecdotally for decades. Recently more rigorous arguments based on shadow price calculations on many economies have emerged. The South African Government's R&D investment portfolio is concentrated in the eight science councils and other instruments such as the Innovation Fund. This portfolio needs continuous monitoring and optimization in terms of local needs and international trends. To assist in this process, appropriate reviews and investigations (e.g. Foresight) in collaboration with the National Advisory Council on Innovation, line departments and research institutions have been carried out. Evidence is that the current annual state investment of approximately R2,5 billion will need to be at least doubled over the next decade (as will the roughly equal private sector figure). Our current national investment of 0,7% of GDP is about a third of the OECD average and (significantly) an even smaller fraction of the equivalent figure for newly industrialized countries such as South Korea and Finland.
  • Technology transfer and diffusion
Proper utilization of the best available technology is potentially the most important contributor to lowering input costs to the economy. Creating mechanisms through which knowledge and technology can be transferred to businesses (especially SMMEs) are therefore needed. A programme has been set up involving the establishment of technology stations, technology incubators, technology demonstration centres and innovation support centres that create an environment for the production of knowledge in the context of its application in industry.
  • Promotion of cultural industries
In the music and craft sector, a range of initiatives have been undertaken with the aim to significantly increase craft and music exports to foreign markets. One such project was initiated early in 2001 in collaboration with the organizers of Celebrate South Africa at the High Commission in London. The impact of developing the craft component of the event created linkages between UK-based craft buyers and South African crafters. Projects such as South African Music Week and South African Design Week generated increased awareness of the importance of these industries and created a platform for projectbased industry/government partnerships. In Film, the National Film and Video Foundation has begun to mediate the involvement of the local film industry, government and international players in co-production agreements. DACST continued to interact with provincial partners and Spacial Development Initiatives (SDI) managers to enhance the potential of cultural tourism to create employment for cultural producers in the three targeted SDI areas, to develop a consistent, revenue-generating link between local artists and the tourism sector.

 
     

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