LOOKING ABROAD: Naledi Pandor, the science and technology minister, said one option to boost R&D was to adopt the Chilean approach. Picture: GCIS
Science and Technology Minister Naledi Pandor. Picture: GCIS

THE state has no intention of revising its target of spending 1.5% of GDP on research and development (R&D) by 2019, despite the fact that SA seems no closer to the goal than it was five years ago.

The target is contained in the medium-term strategic framework for 2014-19, and Science and Technology Minister Naledi Pandor is adamant SA will stick to this goal.

The state measures R&D expenditure as a percentage of GDP because it sees it as a contributor to innovation-led growth and competitiveness.

It is tracked by many governments across the world and helps policy makers gauge programmes intended to foster investment in research and development.

"When the target … was adopted, policy makers were aware that it will require a lot of effort to achieve. The latest data coming from the 2013-14 R&D survey helps us to gauge and adjust our assumptions about the level of effort and timelines required.

"The reality is that South Africa requires a greater level of R&D in order to sustain its leadership in specific technological domains and establish new strengths," Pandor told Business Day.

The latest government-commissioned survey, published last week, shows R&D expenditure as a percentage of GDP remained flat at 0.73% between 2011-12 and 2013-14. The survey was conducted by the Human Sciences Research Council’s Centre for Science, Technology and Innovation Indicators.

SA ranks poorly on the international stage and in comparison to its Brics (Brazil, Russia, India and China) counterparts. The global average for spending on R&D in 2010 was 1.77% of GDP.

In 2012, China’s figure was 1.98%, Brazil’s 1.16%, India’s 0.87% and Russia’s stood at 1.12%.

The council’s survey included revised figures for previous surveys dating back to 2004-05, resulting in slightly lower numbers all round: this means that the gap between R&D expenditure as a percentage of GDP and the 1.5% target is wider than previously thought. The technical adjustments include the rebasing of the GDP announced by Statistics SA in November 2014.

Pandor said a range of factors including general economic activity and the confidence of business to invest in new activities affected the trend in R&D expenditure as a percentage of GDP.

When the survey was released last week, Prof David Walwyn of the Graduate School of Technology Management at the University of Pretoria suggested it might be time to revise the target and consider goals for specific sectors.

"We are in a difficult, fiscally constrained environment. It makes sense to recalibrate the target to 1% in the short term," he said. The survey shows that the country’s expenditure on R&D since 2010 has barely kept pace with inflation: in constant 2010 rand values, it rose from R20.3bn in 2010-11 to R20.8bn in 2011-12.

In 2012-13, it was R21.2bn and R21.5bn in 2013-14.

Pandor said discussions with the business sector and "other actors that influence R&D investment decisions" were helping the government to identify steps it could take to enhance the environment for increasing R&D.

The department administers an R&D tax-incentive programme, but it has been criticised for being difficult to access.