table - national advisory council on innovation 1.5: ... trends in proportion of learners passing...

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OF CONTENTS LIST OF TABLES II LIST OF FIGURES III LIST OF ACRONYMS IV FOREWORD V CONCEPTUAL FRAMEWORK VI KEY HIGHLIGHTS VII 1. FUTURE R&D AND INNOVATION CAPACITY 01 1.1 International Trends in Mathematics and Science Achievement 01 1.2 NSC Pass Rate for Mathematics and Physical Science 03 1.3 SET Enrolments at Higher Education Institutions (Universities) 06

2. SET HUMAN CAPITAL 10 2.1 SET Graduations 10 2.2 Researchers 14

3. CURRENT R&D AND INNOVATION CAPACITY 20 3.1 Research and Development Expenditure 20 3.2ScientificPublications 26

4. TECHNICAL PROGRESS (IMPROVEMENT AND INNOVATION) 30 4.1 Information and Communication Technology Access 30 4.2 Patents 32 4.3 Industrial Designs 35 4.4 Trademarks 40 4.5 Technology Receipts 43

5. IMPORTED KNOW-HOW 45 5.1 Technology Payments 45 5.2InflowofForeignDirectInvestment 46 5.3 Imports of Merchandise Goods 47

6. BUSINESS PERFORMANCE AND KEY INDUSTRIAL SECTORS 49 6.1InnovationPerformanceatFirmLevel 49 6.2TotalFactorProductivityGrowthintheManufacturingSector 50 6.3 Export of Goods and Services 50 6.4JSEMarketPerformancebyIndustry 57

7. WEALTH CREATION 59 7.1GDPContributionbySector 59 7.2 Balance of Payments 61 7.3CapitaltoLabourRatio 62 7.4 GDP per Capita 64

8. QUALITY OF LIFE 67 8.1 Health 67 8.2 Education 69 8.3 Water and Sanitation 70 8.4 Environment 71

APPENDIX A: INDUSTRIAL DESIGNS AND TRADEMARKS CLASSIFICATION 73

South African Science Technology and Innovation IndicatorsII

LIST OF TABLES

TABLE 0.1: PERFORMANCE OF SOUTH AFRICA`S NSI BETWEEN 1996 AND 2015 VIITABLE 0.2: NSI BENCHMARKING, SOUTH AFRICA`S PERFORMANCE ON KEY STI INDICATORS AS PERCENTAGE OF SELECTED REGIONS/ ECONOMIES (2011 – 2015 OR A RECENT PERIOD) VIIITABLE 1.1: SUMMARY OF SOUTH AFRICAN PERFORMANCE ON TIMSS 01TABLE 1.2: SUMMARY OF SOUTH AFRICAN PERFORMANCE ON TIMSS BY PROVINCE 02TABLE 1.3: HIGHER EDUCATION SET ENROLMENTS 07TABLE 1.4: PERCENTAGE PROPORTION OF PUBLIC UNIVERSITIES’ SET ENROLMENT BY RACE AND GENDER 07TABLE 1.5: SOUTH AFRICAN PUBLIC UNIVERSITIES’ SET ENROLMENTS BY NATIONALITY 09TABLE 2.1: PUBLIC UNIVERSITIES SET GRADUATION 10TABLE 2.2: PERCENTAGE PROPORTION OF PUBLIC UNIVERSITIES’ SET GRADUATIONS BY RACE AND GENDER 11TABLE 2.3: PERCENTAGE DISTRIBUTION OF SET DOCTORAL DEGREES AWARDED BY SOUTH AFRICAN UNIVERSITIES BY RACE13TABLE 2.4: SOUTH AFRICAN R&D RESEARCHERS (FTE) 14TABLE 2.5: BENCHMARKING OF SOUTH AFRICAN R&D RESEARCHERS (FTE) 16TABLE 2.6: NUMBER OF RESEARCHERS IN HEADCOUNTS BY POPULATION GROUP AND GENDER PER SECTOR, 2014/15 16TABLE 2.7: PROPORTION OF HIGHER EDUCATION ACADEMIC STAFF WITH DOCTORATE QUALIFICATION (FTE) 17TABLE 2.8: NATIONAL RESEARCH FOUNDATION RATED RESEARCHERS 18TABLE 3.1: PROPORTION OF R&D EXPENDITURE BY SECTOR 20TABLE 3.2: R&D EXPENDITURE (PER SNA) AS COMPONENT OF FIXED CAPITAL FORMATION 21TABLE 3.3: BENCHMARKING OF SOUTH AFRICAN R&D EXPENDITURE 23TABLE 3.4: BUSINESS R&D EXPENDITURE IN DIFFERENT ECONOMIC SECTORS 24TABLE 3.5: PROPORTION OF R&D EXPENDITURE BY RESEARCH FIELD 25TABLE 3.6: SOUTH AFRICAN SCIENTIFIC PUBLICATIONS 26TABLE 3.7: PERCENTAGE PROPORTION OF SOUTH AFRICAN SCIENTIFIC PUBLICATIONS IN VARIOUS FIELDS 27TABLE 4.1: INFORMATION TECHNOLOGY DIFFUSION IN SOUTH AFRICA 30TABLE 4.2: COUNTRY PERCENTAGE SHARE OF PATENTS GRANTED BY TECHNOLOGY 32TABLE 4.3: PERCENTAGE OF RESIDENTS AND NON-RESIDENTS SOUTH AFRICAN PATENTS GRANTED 33TABLE 4.4: SOUTH AFRICAN PATENTS GRANTED BY VARIOUS PATENT OFFICES 34TABLE 4.5: SOUTH AFRICA’S PERCENTAGE WORLD SHARE OF PATENTS GRANTED BY TOP 20 PATENT OFFICES 35TABLE 4.6: COUNTRY PERCENTAGE SHARE OF INDUSTRIAL DESIGNS REGISTERED BY CLASSIFICATION 36TABLE 4.7: PERCENTAGE OF RESIDENTS AND NON-RESIDENTS SOUTH AFRICAN INDUSTRIAL DESIGNS REGI STERED 37TABLE 4.8: SOUTH AFRICAN INDUSTRIAL DESIGNS REGISTERED BY VARIOUS OFFICES 38TABLE 4.9: SOUTH AFRICA’S PERCENTAGE WORLD SHARE OF INDUSTRIAL DESIGNS REGISTERED BY TOP IP OFFICES 39TABLE 4.10: COUNTRY PERCENTAGE SHARE OF TRADEMARKS REGISTERED BY NICE CLASSIFICATION 40TABLE 4.11: PERCENTAGE OF RESIDENTS AND NON-RESIDENTS SOUTH AFRICAN TRADEMARKS REGISTERED 41TABLE 4.12: SOUTH AFRICAN TRADEMARKS REGISTERED BY VARIOUS OFFICES 42TABLE 4.13: SOUTH AFRICA’S PERCENTAGE WORLD SHARE OF TRADEMARKS REGISTERED BY TOP 20 OFFICES 43TABLE 4.14: TRENDS IN TECHNOLOGY RECEIPTS 44TABLE 4.15: BENCHMARKING OF SOUTH AFRICAN TECHNOLOGY RECEIPTS 44TABLE 5.1: TRENDS IN TECHNOLOGY PAYMENTS 45TABLE 5.2: BENCHMARKING OF SOUTH AFRICAN TECHNOLOGY PAYMENTS 45TABLE 5.3: INDICATORS FOR INFLOW OF FOREIGN DIRECT INVESTMENT 46TABLE 5.4: BENCHMARKING OF SOUTH AFRICAN INFLOW OF FOREIGN DIRECT INVESTMENT 47TABLE 5.5: PROPORTION OF MERCHANDISE IMPORTS BY BROAD ECONOMIC CATEGORIES 47TABLE 6.1: EXPORT PERFORMANCE ON VARIOUS SOUTH AFRICAN MERCHANDISE BY TECHNOLOGICAL INTENSITY 51TABLE 6.2: BENCHMARKING OF SOUTH AFRICAN HIGH TECHNOLOGY MERCHANDISE EXPORTS 53TABLE 6.3: HIGH TECHNOLOGY MERCHANDISE EXPORTS TO VARIOUS ECONOMIES AS A PERCENTAGE OF TOTAL MERCHANDISE EXPORTS 54TABLE 6.4: SERVICE EXPORT PERFORMANCE BY VARIOUS CATEGORIES 55TABLE 6.5: BENCHMARKING OF TELECOMMUNICATIONS. COMPUTER AND INFORMATION SERVICES EXPORT 57TABLE 6.6: JSE MARKET CAPITALISATION BY SECTOR 58

III

TABLE 7.1: VALUE-ADDED AS PERCENTAGE OF GDP IN VARIOUS SECTORS 59TABLE 7.2: BENCHMARKING OF SOUTH AFRICAN GDP 60TABLE 7.3: BALANCE OF PAYMENT ON CURRENT ACCOUNT 61TABLE 7.4: BENCHMARKING OF SOUTH AFRICAN CURRENT ACCOUNT BALANCE AS PERCENTAGE OF GDP 62TABLE 7.5: COUNTRIES WITH THE HIGHEST UNEMPLOYMENT RATE 64TABLE 7.6: GDP PER CAPITA IN REAL AND NOMINAL VALUES 65TABLE 7.7: BENCHMARKING OF SOUTH AFRICAN GDP PER CAPITA (CURRENT USD) 66TABLE 8.1: KEY HEALTH INDICATORS 67TABLE 8.2: KEY EDUCATION INDICATORS 69TABLE 8.3: WATER AND SANITATION INDICATORS 71TABLE 8.4: KEY ENVIRONMENT INDICATORS 71TABLE 8.5: BENCHMARKING OF SOUTH AFRICAN CO EMISSIONS 72TABLE A1: INDUSTRIAL DESIGNS INTERNATIONAL CLASSIFICATION UNDER LOCARNO AGREEMENT 73TABLE A2: TRADEMARKS INTERNATIONAL CLASSIFICATION UNDER NICE AGREEMENT 74

LIST OF FIGURESFIGURE 0.1: LOGICAL INDICATOR FRAMEWORK VIFIGURE 1.1: SUMMARY OF SOUTH AFRICAN TIMSS SCORES PER SCHOOL TYPE 02FIGURE 1.2: CHANGE IN PROVINCIAL GRADE NINE TIMSS SCORES, 2003 TO 2015 03FIGURE 1.3: TRENDS IN PROPORTION OF LEARNERS PASSING NSC MATHEMATICS 04FIGURE 1.4: TRENDS IN PROPORTION OF LEARNERS PASSING NSC PHYSICAL SCIENCE 05FIGURE 1.5: PROPORTION OF LEARNERS PASSING NSC MATHEMATICS BY GENDER 05FIGURE 1.6: DISTRIBUTION OF LEARNERS PASSING NSC PHYSICAL SCIENCE BY GENDER 06FIGURE 1.7: TREND IN PROPORTION OF SET ENROLMENTS AT PUBLIC UNIVERSITIES BY RACE 08FIGURE 1.8: PROPORTION OF HIGHER EDUCATION PHD ENROLMENTS BY FIELD 08FIGURE 2.1: TREND IN PROPORTION OF SET GRADUATIONS AT PUBLIC UNIVERSITIES BY RACE 11FIGURE 2.2: PROPORTION OF DOCTORAL DEGREES AWARDED BY SOUTH AFRICAN UNIVERSITIES BY FIELD OF STUDY 12FIGURE 2.3: DOCTORAL DEGREES AWARDED BY SOUTH AFRICAN UNIVERSITIES BY GENDER 13FIGURE 2.4: TREND IN THE NUMBER OF DOCTORAL DEGREES AWARDED 14FIGURE 2.5: TREND IN THE NUMBER RESEARCHERS INVOLVED WITH R&D 15FIGURE 2.6: TREND IN THE NUMBER OF NRF RATED RESEARCHERS 19FIGURE 3.1: TREND IN R&D EXPENDITURE BY SECTOR 21FIGURE 3.2: TREND IN SYSTEMS OF NATIONAL ACCOUNTS R&D EXPENDITURE 22FIGURE 3.3: CHANGE IN BUSINESS SECTOR R&D INTENSITY BY INDUSTRY 24FIGURE 3.4: TREND IN PROPORTION OF R&D EXPENDITURE BY RESEARCH FIELD 25FIGURE 3.5: TRENDS IN SOUTH AFRICAN SCIENTIFIC PUBLICATIONS AND CITATIONS 26FIGURE 3.6: TRENDS IN PROPORTION OF SOUTH AFRICAN SCIENTIFIC PUBLICATIONS BY RESEARCH FIELD 27FIGURE 3.7: NUMBER OF SCIENTIFIC PUBLICATIONS BY UNIVERSITY TYPE 28FIGURE 3.8: PROPORTION OF SCIENTIFIC PUBLICATIONS BY UNIVERSITY TYPE 29FIGURE 4.1: BENCHMARKING OF TRENDS IN MOBILE CELLULAR SUBSCRIPTIONS 31FIGURE 4.2: BENCHMARKING OF TRENDS IN MOBILE CELLULAR SUBSCRIPTIONS (FIVE YEAR PERIODS) 31FIGURE 4.3: TREND IN RESIDENTS AND NON-RESIDENTS SOUTH AFRICAN PATENTS GRANTED 33FIGURE 4.4: TREND IN RESIDENTS AND NON-RESIDENTS SOUTH AFRICAN INDUSTRIAL DESIGNS REGISTERED 37FIGURE 4.5: TREND IN RESIDENTS AND NON-RESIDENTS SOUTH AFRICAN TRADEMARKS REGISTERED 42FIGURE 5.1: TREND IN INFLOW OF FOREIGN DIRECT INVESTMENT TO SOUTH AFRICA 46FIGURE 5.2: PROPORTION OF MERCHANDISE IMPORTS BY BROAD END USE CLASSIFICATION 48FIGURE 6.1: INNOVATION AND RETURN ON INVESTMENT 49FIGURE 6.2: MANUFACTURING TOTAL FACTOR PRODUCTIVITY GROWTH AND ITS DRIVERS 50FIGURE 6.3: COUNTRY SHARE OF MERCHANDISE EXPORTS BY TECHNOLOGY INTENSIVENESS 52FIGURE 6.4: COUNTRY SHARE OF SERVICE EXPORTS BY CATEGORY 56FIGURE 6.5: PROPORTION OF JSE MARKET CAPITALISATION BY SECTOR 58FIGURE 7.1: TREND IN SECTOR VALUE-ADDED AS PERCETAGE OF GDP 60FIGURE 7.2: TREND IN SOUTH AFRICAN GDP AS PROPORTION OF SELECTED REGIONS 61FIGURE 7.3: TREND IN SOUTH AFRICAN BALANCE OF PAYMENT ON CURRENT ACCOUNT 62FIGURE 7.4: EMPLOYMENT, GDP GROWTH AND CAPITAL TO LABOUR RATIO 63FIGURE 7.5: TREND IN SOUTH AFRICAN LABOUR FORCE PARTICIPATION RATE 63FIGURE 7.6: TREND IN SOUTH AFRICAN GDP PER CAPITA 65FIGURE 8.1: TREND IN SOUTH AFRICAN LIFE EXPECTANCY AT BIRTH 68FIGURE 8.2: TREND IN SOUTH AFRICAN HIV/AIDS PREVALENCE RATE 68FIGURE 8.3: TREND IN SOUTH AFRICAN LITERACY RATE 69FIGURE 8.4: PERCENTAGE DISTRIBUTION OF EDUCATIONAL ATTAINMENT FOR PERSONS AGED 20 YEARS AND OLDER 70FIGURE 8.5: BENCHMARKING OF SOUTH AFRICAN CO EMISSIONS 72

South African Science Technology and Innovation IndicatorsIV

AIDS AcquiredImmuneDeficiencySyndrome

BoP Balance of Payment

CO CarbonDioxide

FDI ForeignDirectInvestment

FTE Full-TimeEquivalent

GDP Gross Domestic Product

GERD Gross Expenditure on Research and Development

HEI Higher Education Institutions

HIV HumanImmunodeficiencyVirus

HSRC Human Sciences Research Council

ICT Information and Communication Technology

IP Intellectual Property

IT Information Technology

JSE JohannesburgStockExchange

MNC Multinational Corporation

NACI National Advisory Council on Innovation

NDP National Development Plan

NRDS National Research and Development Strategy

NRF NationalResearchFoundation

NSC NationalSeniorCertificate

NSI National System of Innovation

OECD Organisation for Economic Corporation and Development

PDI Previously Disadvantaged Individual

PhD Doctor of Philosophy

R&D Research and Development

ROI Return on Investment

SA South Africa

SADC Southern African Development Community

SET Science, Engineering and Technology

SNA System of National Accounts

SSA Sub-SaharanAfrica

STI Science, Technology and Innovation

TFP TotalFactorProductivity

TIMSS Trends in International Mathematics and Science Study

UNCTAD United Nations Conference on Trade and Development

US United States of America

LIST OF ACRONYMS

V

FOREWORD

OnbehalfoftheNationalAdvisoryCouncilonInnovation(NACI)Iamdelightedtopresenttheannualreportonthe2016SouthAfricanScience,TechnologyandInnovation(STI)Indicators.Thispublicationispartofourcontributiontobuildingthemonitoring,evaluationandlearningcapabilitynecessaryforassessingthestateoftheNationalSystem of Innovation (NSI).

The2016STIindicatorsreportisbasedontheanalysisofNSIperformanceduringtheperiodbetween1996and2016.Coincidentally,governmentisleadingaprocessofreviewingthecurrent1996WhitePaperonScienceandTechnologyanddevelopingthenewWhitePaperonSTI.Therefore,the2016STIindicatorsreportcanprovidenecessary input into the current policy development process.

The2016STIindicatorsreportidentifiesareasofprogressbutalsopointstothelackofprogressincertainareasof theNSI. First, theNSIhumancapitalpipelineremainsconstrained.Thepercentageofmatric learnerswhopassedmathematicsandphysicalsciencewithatleast50%remainslow.Theproportionofmatricfemalelearnerspassingmathematicsandphysicswithatleast60%hasbeendecliningfrom2008to2016.Unsurprisinglythen,theundergraduatepercentageofSETenrolmenthasremainedstagnantbetween2005(29.4%)and2015(29.7%).Notwithstanding,atthepostgraduatelevel,theproportionofscienceengineeringandtechnology(SET)enrolmentaspercentageoftotalstudentenrolmentshasincreasedbetween2005and2015.

Second,therehasbeennotableprogressintheexpansionandtransformationofresearchcapacity.Thepercentageoffemaleresearchers(fulltimeequivalent)increasedfrom2001/02(38.4%)to2014/15(44.1%).Theproportionoffemaleacademicstaffwithdoctoraldegreesincreasedbetween2005(30.4%)and2014(39.1%)andtheproportionofblack(African,ColouredandIndian)femaleacademicstaffwithdoctoratesalsoincreasedalbeitslightly.

Third,theinternationalbenchmarkingofmobilecellularsubscriptionsindicatesthatSouthAfricaisdoingwellindiffusingICTaccessthroughmobilecellulardevicesper100people.ThisisanimportantstepifSouthAfricaseizetheopportunitiesandbenefitsofdigitisationandthefourthindustrialrevolutionornewproductionrevolution.

Fourth, theR&D intensityorbusinessexpenditureonR&D in theagricultural sector increased from0.29% in2003/04to0.66%in2014/15.ThisiswelcomedgiventhedecliningR&Dintensityinmanufacturingandotherkeyindustrial sectors on the one hand; and the importance of strengthening research and innovation related to food security on the other hand.

Fifth, there has been notable progress in knowledge generation. South Africa’s world share of publicationsincreasedfrom0.39%in1996to0.69%in2015.

OnbehalfoftheNACICouncilandSecretariatwesincerelyhopethatallNSIstakeholders(includingpolicymakers,theprivatesectorandnongovernmentorganisations),willfindthisSTIindicatorsreportinformativeanduseful.WeespeciallyhopethatthedatawillserveasasourceofacknowledgementfortheworkdoneintheareaswhereSouthAfricahasshownprogressandwherewehavenot,itwillinspireusalltofocusoureffortstoaddressingthechallenges.

Prof. Cheryl de la ReyNACI Chairperson

South African Science Technology and Innovation IndicatorsVI

CONCEPTUAL FRAMEWORK

TheconceptualframeworkfortheSouthAfricanSTIIndicatorsreportisthelogicalindicatorframeworkproposedbythe2002NationalResearchandDevelopmentStrategy(NRDS).

Thisframework(Figure 0.1)isusefulasQualityofLifeandWealthCreation,enabledbyBusinessPerformancethroughinnovation,aretheultimategoalsoftheNSI.TechnologicalInnovationisatthecoreofthisframework;and it isnotonlyenabledby localscienceand technologyactivities (e.g.Science,EngineeringandTechnologyHumanCapitalpipelineandResearchSystemCapacity);butitisalsosupportedbyImportedKnow-How.

Figure 0.1: Logical Indicator FrameworkSource: Department of Science and Technology “2002 National R&D Strategy”

Quality of Life

SET Human Capital Quality of Life

Imported KnowHow

Future R&DCapacity

Current R&DCapacity

Technical Progress(Improvement and

Innovation)

Wealth Creation

VII

KEY HIGHLIGHTS

The performance of the innovation system for the country during the period 1996 to 2015 is summarised in Table 0.1. Asshown,therearevisibleimprovementsoverallwithregardtofutureandcurrentscience,engineeringandtechnology(SET)capacity.AsimilartrendisobservedforcurrentR&Dandinnovationcapacityalthoughthereisstagnationwithregardtothecountry’sshareofpublicationsinthe‘engineeringandtechnology’researchfield.Thenumberofinternetusersper100peopleisincreasing,althoughthisislaggingbehindthenumberofmobilecellularsubscriptionsper100people(142during2011–2015).

Table 0.1:Performance of South Africa’s NSI between 1996 and 2015

South African Science Technology and Innovation IndicatorsVIII

Thedeclininginflowofforeigndirect investment(FDI)aspercentageofgrossdomesticproduct(GDP)resultedinalowSouthAfricanFDIinflowcomparedwithotherselectedregions/economiesduring2011–2015(Table 0.2).Althoughthecountry’shightechnologyexportsasapercentageoftheworldhightechnologyexportsshowsstagnation,asaproportionofSADC,Sub-SaharanAfricaandtherestofAfrica,itwasverylarge(at77.07%,56.91%and33.41%respectivelyduring2011–2015).

Overall,relativetotherestoftheworld,SouthAfricaisnotdoingwellintermsofqualityoflifeindicators:carbondioxide emissions are relatively high and so is the HIV prevalence rate. Technology payments are relatively high butconverselytechnologyreceiptsarelowasashareoftheworld.

The South African innovation system remains the strongest on the African continent although other countries are deservedlystartingtocatch-upinsomekeyareassuchasinflowofFDI.

Table 0.2: NSI Benchmarking, South Africa`s Performance on Key STI Indicators as Percentage of SelectedRegions/ Economies (2011 – 2015 or a recent period)

DC = Developing Countries UMIC = Upper Middle Income Economies

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1. FUTURE R&D AND INNOVATION CAPACITY

Thecountry’sfuturecompetitivenessintermsofresearchandinnovationdependslargelyonahealthySEThumancapital pipeline. Each developmental stage is dependent on the preceding one, hence holistic and integrated SET human capital development is important. This section discusses the results of the recently released International TrendsinMathematicsandScienceAchievement(TIMSS),nationalseniorcertificate(NSC)passrateformathematicsandphysicalscience,aswellasSETenrolmentsatlocalpublichighereducationalinstitutions. 1.1 International Trends in Mathematics and Science Achievement

TIMSS isanassessmentof themathematicsandscienceknowledgeof learners ingrade fourandgradeeightwhoareselected fromdifferentcountriesaround theworld.SouthAfricaparticipatesatgradesfiveandninerespectively;andithasparticipatedforthefirsttimeatgradefiveinrespectofmathematics(TIMSS-Numeracy)specifically.TIMSSusesfive‘internationalbenchmarks’toscalethescores,namely:Advanced(above625points),High(550to625points), Intermediate (475to550points),Low(400to475)andNotAchieved(lessthan400).Thosescoringbelow400wouldnothavedemonstratedtheminimumcompetencyinthesubject.

Table 1.1 summarises the performance of South Africa for TIMSS 2015 as compared with the TIMSS 2011performance.

Table 1.1: Summary of South African Performance on TIMSS

Source: Human Sciences Research Council

For mathematics at grade five level, about 61% of learners did not achieve theminimum competency. Thesituationatgradeninelevelissimilarwithonly34%oflearnersachievingabovetheminimumcompetencylevelinmathematicsand32%inscience.Thisisanimprovementfrom2011when27%oflearnerswhoparticipatedachievedtheminimumcompetencyinmathematics.Forscienceitwas25%.

Forscienceatgradenine,68%of learnersdidnotachievethe400acceptablebenchmark.Thisrepresentsanimprovement from75% in2011but,aswithmathematics,doesnotrepresentascorehighenoughtoenabledramaticimprovementsinthecountry’sSTIinthefuture.Forbothmathematicsandscienceonly10%orlessoflearnersachievedtheIntermediatelevelbenchmark(475–550score)exceptforgradefivemathematicswhere12%attainedthislevel.TheHumanSciencesResearchCouncil(HSRC)summarisedtheSouthAfricanperformanceonTIMSSasanimprovementfrom‘verylow’(from1995to2003)to‘low’(in2015).

Figure 1.1 shows TIMSS scores for public schools (fee paying and no-fee paying) aswell as for independentschools.Itisclearthatwhiletherehasbeenasolidimprovementin2015,thelearnersfromno-feepayingpublicschoolsonaveragearenotachievingtheTIMSSinternationalbenchmarkeitherformathematics(gradefiveandnine)orscience.AccordingtotheHSRC,learnerperformanceisinfluencedbyconditionsathome,incommunitiesand at school.

South African Science Technology and Innovation Indicators2

Figure 1.1: Summary of South African TIMSS Scores per School TypeSource: Human Sciences Research Council

The provincial TIMSS performance (Table 1.2)confirmstheinfluenceofsocio-economicconditionsonlearners’performance.ForTIMSS-Numeracy(gradefive),WesternCapelearnersonaverageachievedarelativelyhighscore(441),followedbyGauteng(420).Forgradenine,thescoresforGautengarerelativelyhighforbothmathematicsandsciencefollowedbytheWesternCape.

Table 1.2: Summary of South African Performance on TIMSS by Province

Source: Human Sciences Research Council

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AsshowninFigure 1.2, from 2003 to 2015, the provinces that had the largest improvement in TIMSS average scoresforgradeninesciencewereLimpopo(increaseof123points),followedbyEasternCape(106),Gauteng(104)andKwaZulu-Natal (98). Inmathematics, Limpopoalsohad the largest improvement (117) followedbyGauteng(105),EasternCape(96)andKwaZulu-Natal(91).

Figure 1.2: Change in Provincial Grade Nine TIMSS Scores, 2003 to 2015 Source: Human Sciences Research Council

1.2 NSC Pass Rate for Mathematics and Physical Science

ThepercentageoflearnerspassingNSCmathematicswithatleast40%fromamongstthosewhowrotetheexamdecreasedfrom25.9%in2008to21.4%in2012butthistrendwasthenreversedin2013reachingahighof28.0% (Figure 1.3).

Thispercentagedeclinedagainto19.6%in2014andto18.5%in2015.Itisencouragingtonotethattherehasbeenaslightimprovementin2016fortheproportionoflearnerspassingmathematicswithmorethan40%,50%and60%.

Thepercentageoflearnerspassingmathematicswithatleast50%isstillverylow(12.8%)andthisperformancereflectsasimilarpatterntothatofTIMSS2015.


Figure 1.3: Trends in Proportion of Learners Passing NSC MathematicsSource: Department of Basic Education

TheperformanceofNSCpasses inphysical science shows trends that aredifferent to thoseofmathematicsbetween2008and2015.

Thepercentageoflearnerspassingphysicalsciencewithatleast40%,50%or60%increasedconsistentlybetween2009and2013.Followingadeclineinperformancein2014(aphenomenonalsoobservedformathematics),theproportionoflearnerspassingphysicalsciencewithatleast40%,50%or60%hasbeenontheincreaseoverthepast three years.

DespitethisslightdifferenceinNSClearnerperformancetrendsforbothmathematicsandscience,thepercentageoflearnerspassingthesesubjectswithatleast50%remainslow.Thisisanareaofconcernthatrequiresfurtherimprovement according to the National Development Plan (NDP) and Schooling 2025 Action Plan.

TheNDPemphasisestheneedtoensurethatatleast90%oflearners’masterminimumcompetenciesinlanguageandnumeracywith50%passmark,andthisshouldstartfromlowergrades.

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Figure 1.4: Trends in Proportion of Learners Passing NSC Physical Science Source: Department of Basic Education

Intermsofgender,theproportionoffemalelearnerspassingmathematicsNSCwithatleast60%hasfallento43.0%in2016.Thedecliningtrendhascontinuedsince2012(Figure 1.5).

Figure 1.5: Proportion of Learners Passing NSC Mathematics by GenderSource: Department of Basic Education


Similarly, there is a lowproportionof femalespassingphysical sciencewith at least 60% (44.4% in 2016).Onthepositivesidethisproportionwasslightlyhigher,at48.7%,forphysicalsciencepassmarksof40%ormore.Furthermore,theproportionoffemalelearnerspassingNSCphysicalsciencewithatleast40%,50%or60%hasbeenontheincreasesince2014.

Figure 1.6: Distribution of Learners Passing NSC Physical Science by GenderSource: Department of Basic Education

1.3 SET Enrolments at Higher Education Institutions (Universities)

As Table 1.3shows,overthepastdecadethepercentageofSETenrolmentsatSouthAfricanhighereducationinstitutions(HEIs)hasbeenstagnant,risingonlyfrom28.7%in2005to29.9%in2015.This isexpectedastheproportionofstudentspassingNSCMathematicswithatleast50%hasdeclinedfrom2008to2016.StagnationinSETenrolmentisalsotakingplacewithregardtototalhighereducationenrolmentswhichseemtobeexperiencingcapacity challenges. The undergraduate percentage SET enrolment percentage is also stagnant with only amarginalincrease,from29.4%in2005to29.7%in2015.

Atthepostgraduatelevel,asignificantincreaseinSETenrolmentsasapercentageoftotalenrolmentshastakenplacerisingfrom25.6%in2005to28.7%in2010and31.3%in2015.ThepercentageproportionoffemaleSETenrolments isgraduallyonthe increase,risingfrom43.5% in2005to46.2% in2015.Similarly, theproportionof SET enrolments for previously disadvantaged individuals (PDIs) is on the increase, reaching 79.1% in 2015comparedwith7.3%adecadeearlier.Thissuggeststhattheretheisgradualtransformationtakingplacewithinthesector,althoughthepaceatwhichthisisoccurringisslowgiventheriseintheshareofthepopulationtakenupbyPDIsoverthisperiod.

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Source: Department of Higher Education and Training

ThedisaggregationofSETenrolmentbyPDIsisshowninTable 1.4 and Figure 1.7. Africanstudents’proportionofSETenrolmentsisontheincreasewhereastherehasbeenadeclineforColoureds,IndianandWhitestudents.

Table 1.4: Percentage Proportion of Public Universities’ SET Enrolment by Race and Gender

Table 1.3: Higher Education SET Enrolments


According to the StatisticianGeneral , althougha largenumberof the studentswhowere enrolled at highereducationinstitutionswereblack‚proportionatelythisgroupwasunder-representedby1:5incomparisonwiththe Indian andWhite students’ enrolment if population figures are taken into account. This presents a hugechallengeneedingtobecorrectedifameaningfulreductionininequalitybyracegroupistobediminished.

Intermsofdisaggregationbygender,WhiteandAfricanfemalestudentsarestilllaggingbehindintermsoftheirproportionof totalAfricanandWhiteSETenrolments (43.4and46.4%respectively in2015)even if therehasindeedbeensomeimprovementoverthepastdecade.ColouredfemalestudentshaveahigherproportionofSETenrolmentsthantheirmalecounterparts(51.5%).Indianfemalestudents’SETenrolmentproportionwas48.9%in 2015.


IntermsofSETenrolmentsbynationality,therehasbeenalargeincreaseintheproportionofSETenrolmentsas a percentage of total public universities’ enrolments in respect of other African nationals fromoutside oftheSouthernAfricanDevelopmentCommunity(SADC),from40.9%in2005to50.0%in2015(Table 1.5). This illustrates the growing importance of South Africa`s higher education institutions in helping to develop SETacademicexpertisewithintheAfricancontinent.

Figure 1.7: Trend in Proportion of SET Enrolments at Public Universities by Race

Figure 1.8: Proportion of Higher Education PhD Enrolments by FieldSource: Department of Higher Education and Training

As shown in Figure 1.8, the percentage of SET enrolments at doctoral qualification level as a percentage ofall doctoral enrolments is veryhigh (48.8% in 2015) although this hasbeenon a gradual decline since 2012.EnrolmentsfordoctoraldegreesintheHumanitiesarealsoonthedecline.In2015theywere29.1%ofalldoctoralenrolments, down from 39.5% in 2005. On the increase were business and commerce doctoral enrolmentsfollowedbyenrolmentsintheeducationstudyfields.

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Table 1.5: South African Public Universities’ SET Enrolments by Nationality



2. SET HUMAN CAPITAL

SEThumancapitalcapacityiscriticaltospearheadtheresearchandinnovationagendaofthecountryinanefforttostimulateindustrialcompetitivenessandeconomicgrowththroughtheseandthewellbeingofcitizensofthecountry.ThissectionanalysesSETgraduationsandresearchers’data. 2.1 SET GraduationsThelowrateofgraduationsatSouthAfricanuniversitiesisalsoevidentinthelowrateofSETgraduations.TheratioofSETgraduatestothatofoverallSETenrolmentsin2015wasjust1:5,althoughthankfullythisrepresentsaslightimprovementfromtheratioof1:6in2005.ThepercentageofSETgraduationswasslightlyhigherthanthatofSETenrolments,withavalueof30.7%in2015comparedwith28.9%adecadeearlierand27.6%in2010 (Table 2.1).

Thepercentageproportionofpostgraduate SETgraduations in 2015washowever slightly lower than thatofundergraduates(29.3%comparedwith30.3%respectively).ThisisslightlydifferentfromSETenrolmentsinwhichtheproportionofpostgraduateSETenrolmentshasbeenhigherthanthatofundergraduates.ItsuggestsgreaterdifficultyincompletingpostgraduateSETqualificationsthaninotherdisciplines.Inturn,thiscouldbeafunctionof relative failure in the attainment of decent mathematical and science results at school level. In terms of gender equity,thepercentageoffemaleSETgraduationshascreptupwardsfrom48.9%in2005,to50.2%in2014andto50.6%in2015.

Table 2.1: Public Universities SET Graduation


Intermsoftransformation,thepercentageofSETgraduationsforPDIshassteadilyincreasedfrom61.2%in2005,to69.2%in2010and74.0%in2015.IdeallythiswouldbehighlightingthegeneralimprovementintherelativequalityofPDIstudentsenteringthehighereducationenvironmentratherthanasadeliberateattemptbysuchinstitutions to push through transformation at the expense of quality.

As Table 2.2 and Figure 2.1show,thepercentageofAfricanstudentSETgraduationsatpublicuniversitieshasbeenontheincreasewhereasthatofColoured,IndianandWhitestudentsisondecline.ThispatternissimilartothatofSETenrolmentsandisprobablydrivenbyanexpandinghighereducationsystemwithimprovedaccesson the part of African students.

In terms of gender, the percentage of female SET graduations is higher for Coloured, Indian and African students (56.0%, 53.2%and51.5% respectively) than it is forWhites. ThepercentageSETgraduationsof femaleWhitestudents relative to theirWhitemale counterparts is still laggingbehind (46.6% in2015). This is anarea thatrequires further exploration to understand the dynamics taking place. In other race groups gender representation ishigherforfemalestudentswhoaccountforahigherproportionoftheoverallpopulation.

SET Graduations

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Table 2.2: Percentage Proportion of Public Universities’ SET Graduations by Race and Gender

Figure 2.1: Trend in Proportion of SET Graduations at Public Universities by Race

Fordoctoralqualifications,thepercentageofdegreesawardedinSETfieldsofstudyasaproportionoftotaldoctoraldegreesawarded(Figure 2.2) ismuchlowerthanthepercentageofoveralldoctoralenrolmentsaccountedforbySETdoctoralenrolments(Figure 1.8).AgainthisspeakstoproportionatelygreaterdifficultyincompletingSETqualificationsonceenrolledcomparedwiththecaseforotherdisciplines.In2015,only30.3%ofdoctoraldegreeswereawardedinSETfields.



Figure 2.2: Proportion of Doctoral Degrees Awarded by South African Universities by Field of StudySource: Department of Higher Education and Training

There isa relativelyhighproportionofdoctoraldegreesawarded ineducationaswellas in thebusinessandcommercefieldsofstudy(19.1%and22.4%respectivelyin2015).TheNDPadvocatesforalargershareofSETdoctoralgraduatesinorderforSouthAfricatobealeadinginnovator.AnoverallNDPtargetfordoctoralgraduatesis100doctoralgraduatespermillioninhabitantsperyearby2030.Thistranslatestoanimmediatetargetof5,000doctoralgraduatesperyear,themajorityofthesebeingonSETfields.

AhigherproportionofSETdoctoraldegreesareawardedtomalestudentsthantheirfemalecounterparts,atrendthatgoesasfarbackas2005(Figure 2.3).In2015,717SETdoctoraldegreeswereawardedtomalegraduateswithonly546awardedtofemalegraduates.

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Figure 2.3: Doctoral Degrees Awarded by South African Universities by GenderSource: Department of Higher Education and Training

Higher education institutions are continuing a positive trend of transformation at SET doctoral degree level (Table 2.3 and Figure 2.4). In2015 thenumberofAfricangraduates receivingdoctoralqualifications remainedhigheventhoughitwasslightlylower,at46.6%ofalldoctoralqualifications,downfrom47.8%in2014.Thefigurewassubstantiallyhigherthanitwasadecadeago.However,withAfricanscomprisingover80%oftheSouthAfricanpopulation;thisnumberisstillverylow.

Table 2.3: Percentage Distribution of SET Doctoral Degrees Awarded by South African Universities by Race



Figure 2.4: Trend in the Number of Doctoral Degrees Awarded

2.2 ResearchersResearchers are an important asset for any research and innovation effort aimedat bringingnew ideas andimprovingtheexistingknowledgedomains.AsTable 2.4 and Figure 2.5show,thenumberofresearcherspermillionpeoplewasonagradualincreaseupuntil2007/08whichmarkedthestartoftheglobaleconomicrecession.

Thisindicatorthenshowedagoodimprovementagainfrom2010/11onwards,althoughtherewasaslightdeclinefrom439 to437between2013/14and2014/15.Thenumberof researchersper thousandpeople employedalsodeclined,from1.6in2013/14to1.5in2014/15,whilethenumberofresearchersperthousandlabourforceremained constant at around1.0%. Thepercentageof female researchers increased significantly from34.7%in2001/02 to38.4% in2008/09and to44.1% in2014/15.This indicatessuccess in theprogrammeofgenderdiversificationandempowermentofwomeninthefieldsofSET.

Table 2.4: South African R&D Researchers (FTE)

Source: Department of Science and Technology

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Figure 2.5: Trend in the Number Researchers Involved with R&D

Table 2.5givesmoreperspectiveonthelevelofSouthAfricanresearchersthroughinternationalbenchmarking.By far themajorityofresearchers inR&DwithintheSADCregionareconcentrated inSouthAfrica (96.17% in2013).Thelevelhasremainedhighsince2001.AsaproportionofSSAandthewholeofAfrica,thepercentageofSouthAfricanresearcherswas28.5%and15.6%in2013respectively.

Ingeneral,theproportionofthecountry’sresearchersrelativetovariousregionshasbeenstable.ThisindicatesthatSouthAfrica’seffortstoimproveitsresearchhumancapitalcapacitycontinueatthesamepaceasthoseofregionaleconomies.SouthAfrica`sroleinresearchonthecontinentremainsprominent.However,theproportionoftheworld`sresearchersinSouthAfricaislowerthanthecountry`sshareofworldGDP,at0.3%comparedtotheworldGDPat0.4%.


Table 2.5: Benchmarking of South African R&D Researchers (FTE)

Source: Department of Science and Technology “2014/15 National Survey of Research and Development”

Source: computed by NACI from Unesco Institute for Statistics

As Table 2.6shows,thepercentageofresearchersemployedbyhighereducationinstitutionsandthebusinesssectorremainsmuchhigheramongstWhites(53.4%and69.5%respectively).Ontheotherhand,thegovernmentsectoremploysahigherproportionoffemaleresearchersfromalltheotherracegroupsalthoughthenumberofresearchersinthissectorasaproportionofallresearcherswasonly4.7%.

ItremainsofconcernthattherepresentationofresearchersdrawnfrompreviouslydisadvantagedracegroupsemployedinthebusinesssectorisverylowincomparisontorepresentationinthissectorbyWhites.Tosomeextent the same applies in respect of representation in higher education. There are clearly areas in need of focus toeffecttransformationintermsofincreasingtheproportionofblackgraduatesinSETareasofresearchratherthanin‘softer’disciplinesnotfocussedonSET. Table 2.6: Number of Researchers in Headcounts by Population Group and Gender per Sector, 2014/15

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Thehighereducationstaffprofile(Table 2.7)showsthatintermsofgender,themajorityofstaffwithdoctoralqualificationsaremale,althoughtherehasbeenasubstantialincreaseintheshareoffemalestaffwithdoctoratesoverthe lasttenyears. It isencouragingtonotethattherehasbeenanincrease intheproportionofAfrican,Colouredand Indianstaffwithdoctorates. Intermsofraceandgender, there isahigherproportionofWhitefemaleacademicstaffwithPhD’s (25.9% in2014) than is thecasewith femalestaffofotherracegroups.Themajorityofstaffwithdoctoratesarebetween40–59yearsofage.

Table 2.7: Proportion of Higher Education Academic Staff with Doctorate Qualification (FTE)

Source: DST “Research Information Management System (RIMS) Database”


Table 2.8showsthatalthoughWhitescontinuetodominatethelistoftheNationalResearchFoundation(NRF)rated researchers, there has been some improvement over the last twodecades.Unfortunately, the pace ofimprovementhasslowedslightlyasshownbyFigure 2.6.In1996,theratioofAfricanNRFratedresearcherstotheirWhitecounterpartswas1:28andthisratioimprovedto1:6in2012,butonlyslightlyfurtherto1:5in2015.ThisimprovementinNRFratingperracegroupisalsotakingplaceinrespectofColouredandIndianresearchers.

Amongfemaleresearchersbyracegroups, thenumberofWhite femaleNRFratedresearchers increasedthemostandthisgroupisnowbetterrepresentedin2015ascomparedto1996.ThepercentageofWhitefemaleNRFratedresearcherstothatoftotalWhiteNRFratedresearchersin2015,was34.2%.Thisconstitutedasizeableimprovement from 14.7% in 1996. As a proportion of total NRF rated researchers, White female NRF ratedresearchersincreasedfrom13.2%in1996to25.3%in2015.ThepercentageofAfrican,ColouredandIndianfemaleNRFratedresearcherstothatoftotalNRFratedresearchersincreasedfrom0.4%,0.2%and0.2%respectivelyin1996to2.7%,1.2%and2.1%respectivelyin2015.ThepercentageofAfricanmaleNRFratedresearcherstothatoftotalNRFratedresearchersincreasedfrom2.8%in1996to12.8%in2015;conversely,forWhitemaleresearchers,thispercentagedeclinedfrom76.7%in1996to48.6%in2015.TherehasthereforebeenconsiderablegendertransformationintheNRFratedresearchersoverthepasttwodecades.

According to theNRF, “theratingof individuals isbasedprimarilyon thequalityand impactof their researchoutputsoverthepasteightyears,takingintoconsiderationtheevaluationmadebylocalandinternationalpeers”.Therefore,toacceleratetheshareofNRFratingbyresearchersfromtheunderrepresentedgroups,appropriatemechanismsneedtobeputintoplacetoincreasethenumberandqualityofresearchersfromthesegroupsatthe qualifying institutions (South African higher education institutions, science councils, etc.).

Table 2.8: National Research Foundation Rated Researchers

Source: National Research Foundation

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Figure 2.6: Trend in the Number of NRF Rated Researchers


3. CURRENT R&D AND INNOVATION CAPACITY

Acountry’spropensity for researchand innovationenhances its capacityandability to learnandunderstandimportedtechnologiesandtocreatenewsolutionsthathavethepotentialtoimproveitssocioeconomiclandscape.ThissectionanalysesR&DexpenditureontheinputsideaswellaspublicationsdataaspartoftheR&Doutputs.

3.1 Research and Development Expenditure

R&DexpenditurehasrisensubstantiallyfromabaselineofR7.5billionin2001/02,priortothelaunchingoftheNationalResearchandDevelopmentStrategy(NRDS),toR29.3billionin2014/15(Table 3.1).Inreal2010–basedvalues,thisrepresentsanincreasefromR14.4billiontoR23.2billion.ThehighereducationsectorhasincreaseditsR&Dexpenditureatamuchhigherpacethanthebusinesssector.In2007/08itscontributiontogrossexpenditureonR&D(GERD)was19.4%whilethatofthebusinesssectorwas57.5%.By2014/15,thehighereducationsector’scontributionhad increasedto28.7%whilethatofthebusinesssectorhaddecreasedto45.4%.Thedecline inR&Dexpenditurebythebusinesssector,especiallysincetheglobalfinancialcrisisin2008,isanindicationofthemannerinwhichslowereconomicgrowthhasimpactedadverselyonthewillingnessandabilityofbusinesstospend on R&D.

Table 3.1: Proportion of R&D Expenditure by Sector

Source: Department of Science and Technology “National Survey of research and Development”

As the higher education sector by its nature performs mainly basic research, the relative increase of R&Dexpenditureinthissectorimpliesthattherewillbemoreorientationtowardsthistypeofresearchatanaggregatelevel for thecountry.Debatehasdeveloped inrecent timesas towhether thetypeofresearchconductedbyhighereducationinstitutionsissufficientlygearedtowardssatisfyingtheneedsofthebusinesssectorandtheeconomymoregenerally.R&Dexpenditureofthenot-for-profitsectorhadbeenstagnantataroundR200millionoverseveralyears,buttherehasbeenasuddenaccelerationinrecentyearswiththefigurereachingR800millionin 2014/15.

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Figure 3.1: Trend in R&D Expenditure by Sector

AnalternativewayofmeasuringR&Dexpenditure is basedonthesystemofnationalaccounts (SNA). In thisframework, R&D is treated as an investment to allow thenational accounts to bettermeasure the effects ofinnovationandintangibleassetsoneconomicgrowthandproductivity.OnlyR&Dexpenditurethatisintendedforcommercialpurposesisincludedinthisframework,hencetheexclusionofthehighereducationsector.

Asshownin Table 3.2 and Figure 3.2,theprivatebusinessenterprisesectoraccountsforthemajorproportionofR&Dexpenditure(69.3%during2011-2015)intheeconomyfollowedbythegeneralgovernmentsector(at23.9%)andpubliccorporations(at6.3%).TotalR&DexpenditurebasedontheSNAin2014was56.7%ofthevalueofgeneralexpenditureonR&DmeasuredinaccordancewiththeFrascatiManual.

Table 3.2: R&D Expenditure (per SNA) as Component of Fixed Capital Formation

Sources: South African Reserve Bank “Online Statistical Query”


ThetrendinR&Dexpenditurebyprivatebusinessesrelativetothepublicsectorintheapproximateratioof2:1isroughlyinlinewiththecorrespondingratioinrespectofoverallcapitalinvestment.ThissuggeststhatthedecisiontoembarkuponR&Disinfluencedbysimilarfactorstothosedeterminingcapitalinvestmentmoregenerally.

Figure 3.2: Trend in Systems of National Accounts R&D Expenditure

TheinternationalbenchmarkingofSouthAfricanR&Dexpenditure(Table 3.3)showsthatdespitethedisappointingshareofinvestmentinSouthAfricainR&D,thecountry’sR&DexpenditureisproportionatelyveryhighcomparedwithotherSADCcountries,accountingfor88.8%ofR&Dexpenditureintheregionin2013/14.ThisproportionisalsohighinrelationtothewholeofSSAandtherestofAfricaalthoughithasbeendeclininginbothinstancessince2008/09.Nonetheless,italsoillustratestheappallinglylowproclivitytoinvestinR&DintheAfricancontinentasawhole.Thisrendersthecontinenthighlydependentonknow-howfromothercontinents,leadingtoperceptionsofbeingcolonisedonceagain.

Unfortunately,SouthAfricaisfallingbehindtherestoftheworldovertimeinrespectoftheamountsspentonR&D.TherehasbeenadecreaseinSouthAfricanR&Dexpenditureasashareoftheworld’sR&Dexpenditure,from0.42%in2006/07to0.28%in2013/14.Thisdecliningproportionofthecountry’sshareofglobalR&Dexpenditureis also taking place in relation to the BRICS countries, upper middle income economies and G20 countries. As is thecasewithSSAandtherestofAfrica,mostofthedeclineintheproportionofSouthAfrica’sR&Dexpenditurehastakenplacesincetheglobalfinancialrecessionof2008/09.ThistrendisworryingasitisknownthatthosecountriesthatinvestheavilyinR&Dduringaperiodofsloweconomicgrowthemergeproportionatelystrongerduringthesubsequentupturnoftheeconomywhenitarrives.

TherelativeincreaseinSouthAfrica’sR&Dexpenditureintheearlypartofthelastdecadeandthefall-offinsuchexpenditureoverthesubsequentperiodalsotallieswithasimilartrendinrespectofitscapitalexpenditureasapercentageofGDPmoregenerally.Capitalexpenditurehasdeclinedfrom25%ofGDPadecadeagoto19%ofGDPcurrently,representingadistinctfailuretomeetacriticalgoaloftheNDPwhichisforthisratiotobeheldat25%ofGDPsoastoenhancethecountry`slongertermgrowthpotential.

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Table 3.3: Benchmarking of South African R&D ExpenditureSources: computed by NACI from Unesco Institute for Statistics

Table 3.4 and Figure 3.3showananalysisofR&Dintensityforvarious industries inthebusinesssector.R&Dexpenditureoftheagricultureindustryasapercentageofthegrossdomesticproduct(GDP)accountedforbyagriculturehasgrownsignificantlyfrom0.29%in2003/04to0.66%in2014/15.TheservicessectorhasalsoshownafairincreaseinR&Dintensityfrom0.26%in2003/04to0.36%in2014/15.Ontheotherhand,theindustrialandmanufacturingsectorsexperiencedsubstantialdecreasesinR&Dintensityoverthisperiod.Isitmerecoincidencethattheshareofmanufacturingwithintheeconomyhasdeclinedoverthisperiod,whereasthatoftheservicessector has risen progressively?

Thefactisthataverageannualgrowthinmanufacturinghasbeenvirtually0.2%perannumbetween2008and2016whereastheservicessectorhaveaveragedgrowthofmorethan2%perannum.Again,thisrunscountertotheNDP`sgoalofmakingthecountrymoreself-sufficientintermsofthesupplyofmanufacturedgoodsandlessreliant on imports.


Table 3.4: Business R&D Expenditure in Different Economic Sectors


Figure 3.3: Change in Business Sector R&D Intensity by Industry

IntermsoftheproportionofR&Dexpenditurebyresearchfields,theproportionofR&Dspentinboththenaturalsciencesaswellastheengineeringandtechnologyresearchfieldshasbeenonthedecline (Table 3.5 and Figure 3.4 respectively), from34.5%and32.3% respectively in2007, to29.1%and24.0% in2014.Presumably thesedeclinescorrelatesomewhatwiththeproportionatedeclineofR&Dspent intheindustrialandmanufacturingsectorwhich in turnhasbeenassociatedwitha relativedecline in its importanceand rolewithin theoveralleconomyoverthepastdecade.BothoftheseresearchfieldsremainthelargestintermsoftheirproportionatesharesofR&DexpenditureinSouthAfricabutthesharesofmedicalandhealthsciencesaswellassocialsciencesresearchfields’isincreasingrapidly.

TheproportionateshareofR&Dexpenditureinthemedicalandhealthsciencesresearchfieldsincreasedfrom10.1%oftotalR&Dexpenditurein2001/02to18.6%in2014/15whereasthatofsocialsciencesincreasedfrom9.6%in2003/04to17.0%in2014/15.TherehasalsobeenanimpressiveincreaseintherelativeshareofR&Dexpenditureinagriculturalsciences,butinthehumanitiesithasremainedsmallandrelativelyinsignificant.

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Figure 3.4: Trend in Proportion of R&D Expenditure by Research Field

Table 3.5: Proportion of R&D Expenditure by Research Field


3.2 ScientificPublications Scientificpublicationsconstituteresearchoutputssuchasjournalpapers,conferenceproceedingsandresearchnotes.OnlyindexedscientificpublicationsareincludedinpublicationsdatashowninTable 3.6.Thenumberofthecountry’spublicationsgrewsignificantlybetween2006and2010aswellasduring2011and2015.The2013to2015dataseemtobehigherthanthosepreviouslyreportedbyNACIduetothefactthattheInCitesversion2hasbeenharmonisedwiththeWebofSciencedatabase.BothSouthAfrica`sworldshareofscientificpublicationsand that of citations is on a rising trend (Figure 3.5). Theworldshareofpublicationsincreasedfrom0.39%in1996to0.69%in2015.Forcitations,theworldsharefortheseincreasedfrom0.31%in1996to0.91%in2014beforedroppingto0.89%in2015.

Table 3.6: South African Scientific Publications

Sources: Clarivate Analytics “InCites 2.0” and National Research Foundation

TherisingtrendoftheshareofpublicationsgloballytakenupbySouthAfricanpublicationsdataisimpressive,butitcallsintoquestionwhythissuccessfuloutputdoesnottranslateintoprogressinscientificinnovationsandconsequentlyfastergrowthintheoveralleconomy.Thereareclearlysomefaultlines,eitherintheformoftheappropriatenessoftheresearchfortheeconomy’sprogressor inthetransmissionofthissuccessfulresearchoutputintopracticalresultsintheworkplace.

Figure 3.5: Trends in South African Scientific Publications and Citations

ScientificPublications

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Table 3.7 and Figure 3.6 showthat the largestproportionof scientificpublications inSouthAfricaare in thenatural sciences researchfield (38.3% in 2015), followedbymedical andhealth sciences (23.4%), engineeringtechnology(15.0%)andsocialsciences(14.4%).Agriculturalsciencesresearchhasbeenshowingaprogressivedeclineoverseveraldecadesandshowedanegativetrendin2014and2015intermsofitsshareofthecountry’stotalscientificpublications.ThisisdespiteR&Dintensityintheagriculturalindustryofthebusinesssectorhavingrisen (Table 3.5).SocialScienceisshowingsignificantgrowthasafieldofresearch.Ithasshownanincreasefrom8.6%ofpublicationsduring1996-2000to14.8%during2011–2015.Intheoppositedirectionfromagriculture,publicationsinsocialscienceshaveincreasedtheirshareinlinewiththeproportionateincreaseinR&DexpenditureinthefieldreflectedinTable 3.5.

Table 3.7: Percentage Proportion of South African Scientific Publications in Various Fields

Source: Clarivate Analytics “InCites 2.0

Figure 3.6: Trends in Proportion of South African Scientific Publications by Research Field

Figure 3.7 and Figure 3.8showadistributionofscientificpublicationsfromuniversitiesbyuniversitytype,namely:traditional, comprehensive and universities of technology. Themajority of university publications come fromtraditionaluniversitiessuchastheUniversityofCapeTown,theUniversityoftheWitwatersrand,theUniversityofKwaZuluNatal,theUniversityofPretoriaandtheUniversityofStellenbosch.Althoughtheuniversitiesoftechnologyproducearelativelysmallnumberofpublications,theirpublicationoutputisimprovingatahighpace.Duringtheperiod1996–2000theycontributedonly1.49%oftotaluniversitypublicationsbutthiscontributionincreasedto4.59%during2011-2015.ThisincreaseisdrivenbyanumberoffactorssuchastheDHET’sresearchoutputincentivebut also thedownsizingof this sector,with somebeingabsorbedby thenowadays comprehensiveuniversities.


Themerger of higher education institutions negatively affected the research performance of comprehensiveuniversitiesduring2001–2005as thenumberandpercentageshareof scientificpublicationsbyuniversitiesdeclined during this period. Some scholars have undertaken studies to understand the impact of these university mergersand.Theirfindingsshowthatpowerstrugglesandtheirnegativeimpactonstaffmoralehaveaffectedtheperformanceoftheseinstitutionspostthemerger.Thesituationstabilisedovertheperiod2006–2010asthenumberofpublicationsfromcomprehensiveuniversitiesdoubledfrom2037during2001–2005to4232during2006–2010.

Theresearchoutputofcomprehensiveuniversitiesagaindoubledalongwiththatofuniversitiesoftechnologyfrom theperiod2006–2010 to2011–2015.Thisdramatic increase in scientificpublications from these twotypeofuniversitieshasshiftedthefocusfromtechnologydevelopmenttoknowledgegenerationasthenumberoflocalpatentsapplicationsbySouthAfricanshasdeclined.Thismightbetheunintendedconsequenceoftheresearch outputs incentive, an issue that needs further investigation.

Figure 3.7: Number of Scientific Publications by University Type

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Figure 3.8: Proportion of Scientific Publications by University Type


4. TECHNICAL PROGRESS (IMPROVEMENT AND INNOVATION)

Thissectionpresentstheindicatorsoftechnicalprogressandtechnologicalinnovationbyfocusingonkeyissuessuch as information and communication technology (ICT) access; patents granted; industrial designs registered; and trademarks registered. Technological innovation is a critical catalyst for competitiveness of key industrial sectorsasitencouragesefficiency,differentiationandmarketinginnovationsuchasproductcustomisation. 4.1 Information and Communication Technology Access

ICTaccessisveryimportantespeciallytakingintoaccounttheglobaltrendofdigitisationandthefourthindustrialrevolution. As Table 4.1shows, thecountryhasexperiencedahuge increase in thenumberofmobilephonesubscriptionsper100people.Ithasincreasedfrom9per100during1996–2000to142per100personsduring2011–2015.Incontrast,internetusageper100peopleisstillrelativelylow(51.9in2015)eventhoughtherewasa drastic increase in this indicator from an average of 11.7 to 44.6 internet users per 100 people from the period 2006–2010to2011-2015.Fixedbroadbandsubscriptionsper100peoplearemuchlower.Thisisinsyncwiththelowrateoffixedtelephonesubscriptionsper100people.

Table 4.1: Information Technology Diffusion in South Africa

Source: computed by NACI from The World Bank “World Development Indicators”

Internationalbenchmarkingofthenumberofmobilecellularsubscriptionsper100peopleshowsstronggrowthfor South Africa over a period of 20 years (Figure 4.1).Onecontemplatestheenormousopportunitieswhichexistinfasttrackingeducationandskillsdevelopmentbyexploitingthehighinclinationtowardsmobilecellularusageamong large relatively underdeveloped sectors of society.

Information and Communication Technology Access

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Figure 4.2: Benchmarking of Trends in Mobile Cellular Subscriptions (Five Year Periods)Source: computed by NACI from The World Bank “World Development Indicators”

Figure 4.1: Benchmarking of Trends in Mobile Cellular SubscriptionsSource: computed by NACI from The World Bank “World Development Indicators”

Comparedwithotherregionsoftheworldthecountryhadalargenumberofmobilecellularsubscriptionsper100peopleasfarbackastheperiod1996–2000.DuringthatperiodSouthAfricaboastedninemobilecellularsubscriptionsper100peoplecomparedtojustthreeper100foruppermiddleincomecountries,oneper100forAfrica,twoper100forBRICScountriesandsixper100fortherestoftheworld(Figure 4.2). This trend of higher cellularsubscriptionsrelativetoothercountriesandregionsoftheworldcontinuedintothe2011–2015.


4.2 Patents

As Table 4.2shows,despiteSouthAfricahavingoneofthehighestratiosofcellularmobilesubscriptionsper100people,ithadalowlevelofinternetusage.

Table 4.2: Country Percentage Share of Patents Granted by Technology

Source: WIPO “IP Statistics Data Center”

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Therelativelylowusageofinternetcoincideswithalowshareofthecountry’spatentsbeinggrantedinrespectofICTrelatedtechnologiessuchascomputertechnology(3.3%in2015),ITmethods(2.1%),semiconductors(2.1%),digitalcommunication(1.3%),control(0.6%)andtelecommunications(0.6%).Thelargestcountryshareofpatentsgranted during 2011 – 2015was in respect ofmaterials andmetallurgy (10.7%), followed by basicmaterialschemistry(8.8%),chemicalengineering(8.5%)andcivilengineering(8.5%).

Asshown inTable 4.3 and Figure 4.3 historicallymostpatentsoriginating fromSouthAfricaweregrantedtoresidents.Theproportionwas53.9%during1996–2000,68.9%during2001–2005and65.7%in2006–2010.However,thistrendwasreversedsharplyduring2011–2015asmoreSouthAfricanpatentsregisteredduringthisperiodwerefornon-residents(59.2%).Thissignifiesalargeroleplayedbymultinationalcorporations(MNCs)fortechnologicaldevelopmentinSouthAfrica.Itbegsthequestionastohowthecountrycancapitalizeonthischaracteristic to speed up technological development in the country.

Table 4.3: Percentage of Residents and Non-Residents South African Patents Granted

Figure 4.3: Trend in Residents and Non-Residents South African Patents Granted

Table 4.4showsthevariousdestinationsofSouthAfricanpatentsovera20yearperiodinwhichthenumberof the country’s patents grantedover theperiod 2011 – 2015was actually a little different fromwhat it hadbeenin1996–2000.Instead,therewasanoticeableincreaseinthenumberofsuchpatentsbeinggrantedincountriessuchastheUnitedStatesofAmerica(US),theEuropeanPatentOffice,China,Japan,Canada,Russia,etc.Incontrast,therewasahugedeclineinpatentsgrantedlocallybetweentheperiod2006–2010and2011–2015,from 4 304 to 2 624 respectively.




ThedeclineinlocalpatentsgrantedwaspossiblydrivenbytheDepartmentofHigherEducationandTraining’sscientificpublicationsincentiveaslocalresearchersshifttheirfocusfrompatentstopublications.AccordingtotheCompaniesandIntellectualPropertyCommission(CIPC)“moresubstantiallegislativechangesandtheintroductionofsubstantiveexaminationarerequired”toimprovepatentapplications.CIPCisincreasingitscapacitytopreparetobecomethepatentsexaminationauthority.Asthediagnosisforthedeclineinlocalpatentsmightbewrong,onceCIPCbecomesafullexaminationauthority,thenumberofpatentsbyresidentscoulddeclinefurthersinceinvalidpatentfilingsarelikelytobeeliminated.ItisworthwhilenotingthatrecentlySouthAfricawasamongthetop20countriesintermsofpatentsgrantedtovariouscountriesworldwide(Table 4.5). Among these top patent grantingcountries,thehighestshareofthecountry’spatentsgrantedwaslocally(10.16%during2011–2015)followedbyAustralia(0.33%),NewZealand(0.33%)andIndia(0.27%).

Table 4.4: South African Patents Granted by Various Patent Offices

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Table 4.5: South Africa’s Percentage World Share of Patents Granted by Top 20 Patent Offices


TheSouthAfrican statusofbeing in the top20patent granting countriesworldwide ismore likelydue to itspreviousstatusasanon-examiningauthority.Therehasbeenagradualdeclineintheworldshareofthecountry’spatentsgrantedattheUSPatentOffice,from0.10%in1996to0.06%in2015.Thatsaid,inabsolutenumbersthehighestnumberofSouthAfricanpatentsgrantedoutsideofthecountryhavebeenintheUS.

4.3 Industrial Designs

AsshowninTable 4.6,during2012–2015,thelargestcountryshareinindustrialdesignsregisteredbyclasswasinrespectofpackagesandcontainersforthetransportorhandlingofgoods(13.2%).Thiswasfollowedbymeansoftransportorhoisting(12.7%),toolsandhardware(8.9%),medicalandlaboratoryequipment(7.6%),aswellasrecording,communicationorinformationretrievalequipment(7.5%).Thecountry’sshareofindustrialdesignsinpackagesandcontainersdeclineddrasticallyfrom20.2WW%in2013to5.7%in2015.


Table 4.6: Country Percentage Share of Industrial Designs Registered by Classification


37

In a pattern similar to that of patents granted, non-residents’ trademarks registered from South Africa haveincreasedsignificantly,from45.6%during1996–2000,to52.1%during2006–2010andto69.5%during2011–2015 (Table 4.7 and Figure 4.4).ThisagainshowsthesignificanceoftheimpactofMNCsalthoughitisshowninlatersectionsthattherehasbeenadeclineofforeigndirectinvestment(FDI)inflowintothecountry,reflectingsomewhatcontradictorypatternsbetweenthetwotrends.ItisalmostasifMNC`shavebecomereluctanttoinvestoverallinSouthAfrica,butinsteadhavefounditmoreprofitabletoregisterpatents,trademarksandindustrialdesigns in the country.

Table 4.7: Percentage of Residents and Non-Residents South African Industrial Designs Regi stered


Figure 4.4: Trend in Residents and Non-Residents South African Industrial Designs Registered


AlthoughtherehasbeenadeclineinthenumberofSouthAfricanindustrialdesignsregisteredlocally,from3199during2006–2010to2323during2011–2015,thecountry’sshareofindustrialdesignsregisteredattheCIPCin2015wasveryhigh,at74.6%(371outof497)(Table4.8).

Thecountry’sshareofindustrialdesignsregisteredinSouthAfricain1996was84.7%(316outof373).Althoughnotsosignificant, thenumberofSouthAfrican industrialdesignsregistered intheUShasremainedrelativelyhigh,at108during2011–2015.OnesuspectsthatthiscouldbeafunctionalsoofthehighnumberofskilledSouth Africans residing in the US.

Table 4.8: South African Industrial Designs Registered by Various Offices


Table 4.9showsthatduring2011–2015thehighestworldshareofSouthAfricanindustrialdesignsinleadingcountries for industrial designs registrationwas at the EuropeanUnion Intellectual PropertyOffice (0.143%),followedbytheUS(0.092%),Canada(0.081%),Mexico(0.068%),India(0.058%)andIndonesia(0.058%).

39


Table 4.9: South Africa’s Percentage World Share of Industrial Designs Registered by Top IP Offices


AmongBRICSmembercountries,SouthAfricahadthelargestworldshareofindustrialdesignsregisteredduring2011–2015inIndia(0.058%followedbyBrazil(0.042%),China(0.003%)andRussia(0.002%).Theabovefiguressuggest that use of the English language may play an important role in the registration of industrial designs in other countries.

SouthAfricahada relativelyhighworld shareof industrialdesigns registered in theUnitedKingdom in1996(0.145%).However,thishassincedeclinedsignificantlyduetotheEuropeanUnionIntellectualPropertyOfficethatmanages European Union trademarks and designs.

4.4 Trademarks

Almost70%ofSouthAfrica’seconomyislocatedinservice-basedindustriesinwhichnon-technologicalinnovationis amajor factor of competitiveness andproductivity growth.Marketing innovation is the implementation ofa new marketing method involving significant changes in product design or packaging, product placement,product promotion or pricing. According to the Organisation of Economic Cooperation and Development (OECD), trademarkisasign(aword,alogooraphrase)thatenablespeopletodistinguishbetweenthegoodsorservicesof one party from those of another. Trademarks are therefore a proxy indicator for marketing innovation.

Table 4.10 shows the country’s shareof trademarks registeredby theNiceClassificationwhich isdetailed inAppendix A, Table A2.Underthisclassification,therearetwotypesoftrademarks,thoseofgoods(class01–34)andthoseofservices(class35–45).During2011–2015,thelargestcountryshareoftrademarksregisteredwasinrespectofadvertising;businessmanagement,businessadministrationandofficefunctions(12.9%),followedbyalcoholicbeveragesincludingbeers(9.2%).Theshareofalcoholicbeveragetrademarksregisteredhasshownasharpdeclinefromthe19.9%sharewhichprevailedduring2001–2005.Goodsrelatedtrademarkshadacountryshareof54.2%during2011–2015,withashareof45.8%forservicesrelatedtrademarksregistered.

Table 4.10: Country Percentage Share of Trademarks Registered by Nice Classification

41


Contrarytothelargeshareofnon-residents’patentsandindustrialdesigns,therehasbeenalargepercentageshareof residents’ trademarksbeing registered in various countriesamounting to72.8%during2011–2015(Table 4.11 and Figure 4.5).

Table 4.11: Percentage of Residents and Non-Residents South African Trademarks Registered



Figure 4.5: Trend in Residents and Non-Residents South African Trademarks Registered

Table 4.12: South African Trademarks Registered by Various Offices


43

Mostofthecountry’strademarksareregisteredlocally93%(or80724outof86603)during2011–2015(Table 4.12),which isan increasefrom84%during1996-2000.The largestproportionate locationforSouthAfrica’strademarkselsewhereisinChina,followedbytheEuropeanUnion,theUS,Australia,Uganda,theUnitedKingdom,BrazilandIndia.

Amongthetop20intellectualpropertyregistrationoffices(Table 4.13),during2011–2015,theworldshareofSouthAfrica’strademarksregisteredwaslargestinAustralia(0.18%)followedbytheEuropeanUnionIntellectualPropertyOffice(0.16%),theUnitedKingdom(0.11%),HongKong(0.11%),Canada(0.10%)andMalaysia(0.08%).

Table 4.13: South Africa’s Percentage World Share of Trademarks Registered by Top 20 Offices


4.5 Technology Receipts

Selected indicators for receiptson charges for theuseof intellectualproperty showan improvement for thecountryfromtheperiod2006–2010totheperiod2011–2015(Table 4.14). Technology receipts as a percentage ofGDPincreasedfrom0.20%to0.31%respectivelyforthetwoperiodswhiletechnologyreceiptsin2010pricesincreased in real terms from R3 405 million to R4 808 million.


TheinternationalbenchmarkingofSouthAfricantechnologyreceipts(Table 4.15)showsaverylowworldsharevalueforthecountry(0.04%during2006–2010and2011–2015).IncomparisontootherSTIindicators,theshareofSouthAfricantechnologyreceipts ishighrelativetootherBRICScountriesevenif therewasadeclinefrom5.84%during2006–2010to4.80during2011–2015.Onthepositiveside,therewasalargeincreaseinSouthAfrican technology receipts in relation to SSA, SADC and the rest of Africa.

Table 4.15: Benchmarking of South African Technology Receipts

Source: The World Bank “World Development Indicators”

Table 4.14: Trends in Technology Receipts

Source: South African Reserve Bank “Online Statistical Query”

45

5. IMPORTED KNOW-HOW

An open innovation model has gained prominence especially in the area of strategic global innovationcollaborations.Theuseofimportedknowledgeexploitsthedifferenceinproducts,processandindustrylifecyclesbetween various countries.Unfortunately for anuptakeof locallyproduced technologies, there is aneed forapropermatchbetween currentmarketneedsand technological capacity. Importedknow-howfills this gap.Technologypayments,inflowsofforeigndirectinvestment(FDI)andimportsofmerchandisegoodsarediscussedin this section.

5.1 Technology Payments

Payment for the charges on the use of intellectual property includes items such as patents, trademarks, copyrights, industrial processes and designs that include trade secrets and franchises. As Table 5.1 shows,SouthAfricantechnologypaymentshaveincreasedfromR61.6billionduring2006–2010toR91.2billionduring2011–2015.Inrealtermstechnologypaymentsincreasedby8.4%betweenthesetwoperiods.Percapitatechnologypaymentsin nominal value terms also increased from R144.1 in 2005 to R397.4 in 2015. The country has one of the highest technologypaymentsperGDP, at 7%ofGDP in 2015. Similarly, technologypayments as a proportionof thecountry’scurrentaccountdeficitin2015wereabout12.5%,amarginalimprovementfrom2005(13.3%)althoughoverthepastthreeyearsthisfigurehasbeenonanupwardtrend.

Table 5.1: Trends in Technology Payments


SouthAfricantechnologypaymentsdeclinedfrom2006-2010to2011-2015inrelationtotherestoftheworldincluding Africa, G20 countries, BRICS countries, SSA and SADC (Table 5.2). That said, South African technology paymentsincreasedfrom2014to2015specificallyinrelationtoallthesecountrygroups.

Table 5.2: Benchmarking of South African Technology Payments



Table 5.3: Indicators for Inflow of Foreign Direct Investment

Source: United Nations Conference on Trade and Development “UNCTADstat”

Figure 5.1: Trend in Inflow of Foreign Direct Investment to South Africa

Table 5.4clearlyshowsareductionofFDIintothecountry,especiallyduring2014and2015.ThedeclineofinflowsofFDIseemstohavebeenveryhighforSouthAfricainthecurrentdecade,withthecountrylosingitsattractionsasanFDIdestinationeveninrelationtocomparatorcountriesinBRICS,aswellasinrelationtodevelopingeconomiesand upper middle income economies. According to the United Nations Conference on Trade and Development (UNCTAD),thelargedeclineinFDItoAfricancountriesisduetotherecentendofthecommodity“super-cycle”,whichhasseriouslyaffectedtheflowofFDItoresource-richcountries.InSouthAfrica,theslowdowninFDIhasarguablyalsobeennegativelyaffectedbyincreasedpoliticaluncertaintyanduncertaintyabouteconomicpolicy.

5.2 InflowofForeignDirectInvestment

An alternative mode of technology localisation is through foreign direct investment. In this type of arrangement, a local company has access to advanced technologies of the parent company and in some instances the parent company sets up R&D facilities for customisation of its technologies to the local market. As Table 5.3 and Figure 5.1show,SouthAfricanFDI inflow increasedfromthe1996–2000periodto2006–2010andstartedtodecreaseinrealreturnsduringthe2011–2015period.FDIaspercentageofGDPhasalsobeenonadecliningtrend.ItisnocoincidencethatoverallGDPgrowthalsodeclinedoverthisperiod,justasFDIhadincreasedtogetherwithGDPgrowththroughthefirstdecadeofthe21stcentury.

InflowofForeignDirectInvestment

47

Table 5.4: Benchmarking of South African Inflow of Foreign Direct Investment


5.3 Imports of Merchandise Goods

Asshownby Table 5.5, inaccordwiththedeclineinFDIintothecountry,therehasbeenadeclineinimportsofcapitalgoods(25.76%in2015versus34.12%in1996)andindustrialsupplies(28.78%in2015versus33.20%in1996).Importsofmerchandisesuchastransportequipment,foodandbeveragesandconsumergoodsrosebetweenthe1996–2000and2011–2015periods.Althoughtheimportoffuelsandlubricantsrosebetween1996–2000and2006–2010,therewasadeclineduring2011–2015period.Thisdeclinewastosomeextentassociatedwiththerecentfallincrudeoilprices.

Table 5.5: Proportion of Merchandise Imports by Broad Economic Categories

Source: Department of Trade and Industry “


Analysis by system of national accounts (SNA) broad end use classification (Figure 5.2) shows a decline inintermediate and capital goods imports although in this case the proportion of capital goods increased slightly duringthe2011–2015period.

Theshareofimportsofconsumergoodswasonanupwardtrendbetween2001–2005and20112015,from7.52%to10.03%,followingacorrespondingdeclineintheproportionofconsumptiongoodsimportedduringtheprecedingdecade,from12.38%during1996–2000to11.66%duringthe2001–2005period.Thedeclineinimportsofinvestmentgoodsrelativetoconsumptiongoodsisdisturbingasitsuggestsanerosionoftheeconomy’scapitalandproductivebasetoaccommodateinnovativeprocessesandthroughthisadeclineintheabilitytogeneratehighereconomicgrowthgenerallyinthelongerterm.

Figure 5.2: Proportion of Merchandise Imports by Broad End Use ClassificationSource: Department of Trade and Industry

49

6. BUSINESS PERFORMANCE AND KEY INDUSTRIAL SECTORS

Improved competitivenessof key industrial sectorshasadirectpositive impactoneconomic growthand jobcreation and leads to an improvement in the standard of living. Technological improvement is key to increasing the competitiveness of various key industrial sectors, especially those that have the potential to accelerate economicgrowthandgroworretainjobs.ThissectiondiscussesthefindingsoftheAccentureInnovationIndex,andalsodealswithtotalfactorproductivitygrowth,theexportofgoodsandservices,hightechnologyexportsandJohannesburgStockExchange(JSE)performancebyindustry.

6.1 Innovation Performance at Firm Level

TheAccentureInnovationIndexwasdesignedasanationalbenchmarkforinnovation,providingbusinessesandpolicymakerswithanauthoratativeandobjectivesnapshotofthestateofinnovationinSouthAfrica.TheindexisderivedbymeasuringinnovationandsystemsofinnovationinorganisationsofallsizesintheSouthAfricanpublicand private sectors.

Figure 6.1: Innovation and Return on InvestmentSource: Accenture South Africa “2016 Accenture Innovation Index”

Thisindexshowsthatwithinthesampleof90companiesanalysed,onlyapproximately37%oftheorganisationsinSouthAfricacanbethoughtofasinnovativeandofthose,only8%areinnovationvaluechampionsasmeasuredby their high innovation index scores and higher returns on investment (ROI) from innovation (Figure 6.1). Themajority of organisations analysed (57%) has sub-standard innovations and thesewere characterised bylowinnovationindexscoresandalowROIfrominnovation.Incidentally,thetestsampleisrelativelysmallandthereforethereisareluctancetotreatsuchfindingsastotallydeterministic.


Mean scores of TFP growth components, over the period 1994-2013

sech=scaleefficiencychange;pech=pureefficiencychange;techch=technicalchange

Figure 6.2: Manufacturing Total Factor Productivity Growth and its Drivers Source: Tsebe M. and Biniza S. (2015)

6.3 Export of Goods and Services

Thenatureofacountry’sexportsdependslargelythesophisticationlevelsofitsbusinesssector.Hightechnologyexportsareoftenassociatedwithaknowledge-basedeconomy.Thecountry’sshareofhightechnologyexportsisverylow.In2015,itwas4.01%oftotalexports.Thisfigurehadbeenonashallowdeclinebetweenthe1996–2000periodand2011–2015 (Table 6.1),butencouraginglyoverthelastthreeyears(2013to2015)specifically,thecountry’sshareofhightechnologyexportsaspercentageofallthemerchandiseexportsincreased.

6.2 Total Factor Productivity Growth in the Manufacturing Sector

Total factor productivity (TFP) measures the residual growth in total output of a firm, industry or nationaleconomythatcannotbeexplainedbytheaccumulationoftraditional inputssuchaslabourandcapitalalone.TheestimatedTFPcanfurtherbedecomposedintocomponentssuchastechnologicalchange,pureefficiencyandscaleefficiency.Figure 6.2 showsthemeanscoresofTFPgrowthcomponentsforthemanufacturingsectorforthetwodecadeperiod1994-2013.Overall,technicalchangeaccountedformostofTFPgrowthinsevenofthe10manufacturingsubsectors.Thisgrowthhasbeenhighforcapital-intensivesub-sectorsandtherehasbeenadeclineinTFPgrowthinlabour-intensivesub-sectorssuchastextiles,clothingandleatheraswellasfurniture.

Total Factor Productivity Growth in the Manufacturing Sector

51

Table 6.1: Export Performance on Various South African Merchandise by Technological Intensity


As Figure 6.3 shows, during the 1996 – 2000period, the highest country share ofmerchandise exportswasthatofresource-basedmanufacturers(27.83%),followedbyprimaryproducers(24.84%)andmediumtechnologymanufacturers(23.52%).Thecountryshareofexportsfromresource-basedmanufacturersgrewto29.27%during2011–2015from26.59%during2006–2010.Thisfollowedaslightdeclinefrom1996–2000levels.However,between2013and2015specifically,thecountryshareofexportsfromresource-basedmanufacturersdeclinedquitesharplyinlinewiththefallofcommoditypricesmoregenerally.

Thecountryshareofexportsfromlowtechnologymanufacturers isonthedeclineandit isalsothesameforSouthAfrica’sworldshareofexportsinthiscategory.Thecountry’shighestworldshareofexportsin2015wasinrespectoftheprimaryproductscategory(0.77%),followedbyresource-basedmanufacturers(0.73%)andmediumtechnologymanufacturers(0.43%).


Figure 6.3: Country Share of Merchandise Exports by Technology Intensiveness

AsshownbyTable 6.2, althoughthecountryshareoftheworld`shightechnologyexportsislow,SouthAfrica’spercentageshareofhightechnologyexportsishigh(72.02%.51.46%and29.38%respectivelyin2015)inrelationto SADC, SSA and Africa. The situation is similar in relation to BRICS countries, developing economies and upper middleincomecountries.Againthisisindicativeofagradualdeclineinthecountry’scompetitivenessrelativetoits peers.

Thecountry’sshareofhightechnologyexportsasapercentageofG20countriesandtherestoftheworldisverylow(0.11%and0.08%respectivelyin2015).

1996 -2000

1996 -2000

3.75

9.33

29.04

3.681.01

28.19

26.65

11.43

24.84

27.8310.73

29.44

10.730.97

27.39

3.537.86

24.91

29.277.03

26.59

8.45

23.52

2001-2005

2001-2005

30.95

Primary Products

Resource-BasedManufactures

LowTechnologyManufactures

Medium TechnologyManufacturers

High TechnologyManufacturers

UndassifiedProducts

53

Table 6.2: Benchmarking of South African High Technology Merchandise Exports


As Table 6.3 shows, in terms of high technologymerchandise exports as a percentage of totalmerchandiseexports,mosthightechnologyexportsgotoregionsoftheworldwhichhavenotindustrialisedsignificantlybySSA(7.63%in2015),SADC(7.62%),Africa(7.54%),leastdevelopedcountries(7.50%),SouthAmericaandCentralAmerica(6.18%),developingeconomies(5.18%),uppermiddleincomecountries(4.85%)andOceania(4.55%).

TheproportionofhightechnologyexportstoBRICScountrieshasfallendrastically, from5.19%during2001–2005toonly0.55%during2011–2015.ThisshowsthegrowingdominanceofChinaasacompetitiveproducerofhightechnologygoodswhichkilledoffmuchoftheneedforSouthAfricanexports.Overall,SouthAfricanhightechnology exports as a percentage of total merchandise exports to various regions and economies is declining.

Overthelastthreeyearstherehasbeenanimprovement,notablyinrespectoftheproportionofhightechnologymerchandiseexportstoSouthAmericaandCentralAmerica,withanincreasefrom2.57%in2013and3.15%in2014to6.18%in2015.


Table 6.3: High Technology Merchandise Exports to Various Economies as a Percentage of Total Merchandise Exports


Intermsofservicesexportsbycategory,asTable 6.4 shows,SouthAfrica’slargestshareofservicesexportsin2015wasinrespectoftravel(54.86%),followedbytransport(16.41%).Havingriseninlinewiththebuild-uptotheFIFAWorldCup,travelserviceexportsdeclinedfromacountryshareof58.41%during2006–2010to55.38%during2011–2015(Figure 6.4).

55

Table 6.4: Service Export Performance by Various Categories



Servicesexportsinrespectofchargesfortheuseofintellectualpropertyasapercentageofthecountry’sservicesexportsincreasedfrom0.56%during2006–2010to0.72%during2011–2015.

Intermsoftheirworldshare,servicesexportsforchargesfortheuseofintellectualpropertyremainverylowandstagnantat0.04%.Governmentserviceshadthehighestpercentageworldshareofservicesexportsin2015(0.97%),followedbytravelservices(0.67%).

Figure 6.4: Country Share of Service Exports by Category

Telecommunications,computerandinformation(TCI)servicesexportsareakeyindicatorwithwhichtomonitortheimpactoftherecentonsetofthefourthindustrialrevolution.SouthAfricaisalsoahosttotheSquareKilometreArray,aninternationalprojectthatisaimedatbuildingalargemultiradiotelescopewithatotalcollectingareaofaboutonesquarekilometre.Capacitybuilding in theareaofbigdata is therefore important.AsTable 6.5 shows,thecountry’sexportsofTCIservicesasapercentageofSADCexportsremainsveryhigh(60.82%in2015).However, it isonlyabout10% relative to the restofAfrica. TCI servicesexports relative toBRICS,developingeconomies,middleincomecountries,G20countriesandtherestoftheworldunfortunatelyhavebeenonthedecline during the last three years.

2006-2010

2011-2015

2.510.85

9.210.56

2.665.51

0.2

18.38

58.41

18.06

55.38

1.595.24

3.450.72 11.82

0.892.41

Goods-Relatedservices

Transport

Travel

Construction

Insurance and PensionServices

FinancialServices

TelecommunicationsComputer and InformationServices

Charges for the use ofIntellectual Property (n.e.s.)

OtherbusinessServices

Personal, Cultural, andRecreational Services

Government and Servicesn.e.s.

57

Table 6.5: Benchmarking of Telecommunications. Computer and Information Services Export


6.4 JSE Market Performance by Industry

Totheextentthattheperformanceofequitymarketsinspecificsectorsmightbeseentobeareflectionoftheunderlyingmacroeconomicprogressinthosesectors,itmaybeofinteresttoreflectontheJSEperformanceofsuch sectors and especially the relative role of technologically driven industries. The market capitalisation of the financialsectorontheJSEincreasedsignificantlyfromR755billionin2006toR1.6trillionin2016 (Table 6.6). As aresult,thissectorisnowthebiggestontheJSEintermsofmarketcapitalization,withashareof25.5%in2016,from21.3%in2006(Figure 6.4).

JSE Market Performance by Industry


ThemarketcapitalisationofthehealthcareindustryhasalsogrownsignificantlyoverthedecadealthoughasapercentageshareofJSEmarketcapitalisationitwasonly3.8%in2016,havinggrownfromalowbaseof1.2%in2006.TechnologyandtelecommunicationsindustriesshownosignsofgrowthontheJSE.Thisisaworryingfactorintermsofthepotentialforlocalinnovations,whilsttherelativemarketcapitalisationoftheoilandgasindustryhasshrunkdrasticallyinrecentyears.Thisislinkedtothedeclineinoilpricesbetween2013and2015.TherecentfallinmetalpricesalsocontributedtoadeclineinashareofJSEmarketcapitalisationforbasicmaterialsfrom37.5%in2006to22.4%in2016.

Figure 6.5: Proportion of JSE Market Capitalisation by Sector

20162006

37.5

22.4

15.8

5.20.53.8 5.3

25.5

21.6

5.70.5

2

7.0

13.6

8.64.6

21.3

Basic materials

Consumer goods

Consumer services

Financials

Health care

Industrials

Oil and gas

Technology

Telecommunications

Source: Johannesburg Stock Exchange

Table 6.6: JSE Market Capitalisation by Sector

59

7. WEALTH CREATION

Economicgrowthisakeydriverinachievingseveraldevelopmenttargetsforthecountry.TheSchumpeterianeconomic model places innovation and entrepreneurship as the primary drivers for competitiveness and rapid economicgrowth.TheareasthatarediscussedinthissectionreflectthecontributionofvariouseconomicsectorstotheGDP,togetherwiththebalanceofpayments,shareofwealthbetweencapitalandlabour,aswellasincomeper capita.

7.1 GDP Contribution by Sector

As Table 7.1shows,in1996thelargestsectoralcontributiontoGDPcamefromcommunity,socialandpersonalservices(17.6%)followedbyfinance,realestateandbusinessservices(14.6%),manufacturing(14.3%)andthenminingandquarrying(13.1%).

Table 7.1: Value-Added as Percentage of GDP in Various Sectors


Sincethen,thefinancialsectoranditsassociatedindustrieshavegrowninprominenceovertwodecades.Duringtheperiod2011–2015thissectoraccountedfor19.5%ofGDP,upfrom15.2%during1996–2000(Figure 7.1). Incontrast,theManufacturingsector’sshareofGDPdeclinedinlinewithglobaltrends,from14.3%during1996–2000to12.8%during2011-2015.Automationandtheglobaleconomicrecessionarethemainfactorscontributingtothisdecline.MiningisoneofthesectorsthatdeclineddrasticallyintermsofitssizewithintheSouthAfricaneconomy.Mostofthisdeclinetookplacebetweenthe2001–2005and2006–2010periods,fallingfrom11.0%to8.8%oftheGDP.Asmostgoldminesaregettingdeeperandunsafe,improvedminingmethodsareurgentlyrequired toextract SouthAfrica’s enormousmineraldeposits.Hugeelectricity, steel andwage cost increaseshavealsoraisedthecostsofmining.Costshavealsorisenabruptly in linewithefforts to improvesafetyandproductivity,focusingonspecialityareasofminingautomationandlatelyminingrobotics.


Figure 7.1: Trend in Sector Value-Added as Percentage of GDP

Internationalbenchmarking(Table 7.2 and Figure 7.2)indicatesthatthecountry’sGDPisdecliningrelativetoitsAfricancounterparts,includingSADCandSSA.ThisdecliningshareofSouthAfrica’sGDPisafunctionofthehighereconomicgrowthratesinthoseregionswhichhavebeendrivenbyrisinglevelsofforeigndirectinvestmentandindustrialisationincontrastwithSouthAfrica`sdecliningshareofforeigninvestment.SouthAfricalostitsstatustemporarilyasthelargesteconomyinAfricatoNigeriafollowingtherebasingofNigeria’sGDPin2013.In2016SouthAfricaregaineditsspotasthelargestAfricaneconomyfollowinghugedepreciationofthecurrenciesofNigeriaandEgyptandasevererecessioninNigeriafollowingthecollapseofoilpricesbetween2014and2016.

WiththerapidgrowthinChina’sGDPbetween1996and2015(annualgrowthratesofmorethan10%until2010),aswellasimpressiveGDPgrowthratesinIndiaofbetween6%and8%inthepastfiveyears,SouthAfrica’sshareofBRICSGDPdeclineddramaticallyfrom5.3%during1996–2000,tojust2.3%during2011–2015. Table 7.2: Benchmarking of South African GDP

Source: World Development Indicators

61

InrelationtotheG20andtherestoftheworld,SouthAfrica’sGDPhasbeenstagnant,hoveringbetween0.5%and0.6%ofWorldGDPbetween1996and2015.

Figure 7.2: Trend in South African GDP as Proportion of Selected Regions

7.2 Balance of Payments

The balance of payments is a record of all transactionsmade between one particular country and all othercountriesduringaspecifiedtimeperiod.Thesetransactionsincludetheflowofgoods,servicesandfundsacrossnationalboundaries.SouthAfricahasexperiencedadeteriorationinitscurrentaccountbalanceoverthelast20years,bothinnominalandrealterms(Table 7.3 and Figure 7.3).ThecurrentaccountdeficitincreasedfromlessthanonepercentofGDPduring1996–2000,to4.6%during2011–2015.Onthepositiveside,the2013to2015datashowsomenarrowingofthecurrentaccountdeficit.

Table 7.3: Balance of Payment on Current Account



Figure 7.3: Trend in South African Balance of Payment on Current Account

InternationalbenchmarkinginTable 7.4 showsasimilartrendofanincreasingcurrentaccountdeficitforSADC,SSAandAfricaasawhole.ThisriseinthecurrentaccountdeficitforAfricaacceleratedin2015to7.8%ofGDPfrom3.9%ofGDPin2014.DecliningcommoditypricesandassociatedexportvaluesofAfricanmineralexportswerethemainreason.Incontrast,thecurrentaccountdeficitofBRICScountriesdecreasedbetweentheperiods2006–2010and2011-2015from3.5%to0.9%ofGDP.

Table 7.4: Benchmarking of South African Current Account Balance as Percentage of GDP


7.3 Capital to Labour Ratio

Thecapitaltolabourratioisanimportantindicatorofincomesharingbetweentheownersofcapitalandprovidersof labour.This indicator is important forSouthAfricadueto thehigh inequalityprevalentwithin thecountry.Figure 7.4showsadecliningcapitaltolabourratiofrom1996to2004followedbyanincreasefrom2005to2015.Figure 7.4 alsoshowsaninverserelationshipbetweenthecapitaltolabourratioandtheGDPgrowthrate.Thiscastsdoubton thepremise that increasedcapital intensitynecessarilycontributes towards improvedgrowth.Instead,itappearsasifdecliningproductivity,industrialrelationtensionsandpooroveralleconomicgrowthdrivebusinessestoadoptmorecapitalintensiveprocesses.

63

Whentheeconomygrows,thereappearstobeanincreaseintheaggregatedemandforlabourinrelationtocapital,henceadecreaseinthecapitaltolabourratioduringsuchperiods.Inprinciple,unemploymentshouldalsodecreasealthoughtheoppositetookplaceinSouthAfricaovertheperiod1996to2004.Thiswasassociatedwithalargedecreaseinthelabourforceabsorptionrate (Figure 7.5) atthetime.AssanctionswereliftedandSouthAfricaentered themainstreamofglobal trade for thefirst time inmanydecades, thecountry reducedtariffsonimportsthusopeningtheeconomytotherestoftheworld.Thisforcedintoeffectscertainnormsandstandardswhichledtocapitalintensityattheexpenseofthemasses.

Figure 7.4: Employment, GDP Growth and Capital to Labour RatioSource: South African Reserve Bank “Online Statistical Query”; unemployment data from World Development Indicators

Figure 7.5: Trend in South African LabourForce Participation RateSource: World Development Indicators


Whiletherehasbeenanincreaseonaverageinthecapitaltolabourratio,theunemploymentratehasbeenrisingconsistentlyandthisisthebiggestchallengetotheeconomyasshowninTable 7.5. Out of 174 countries, South Africanunemploymentwastheseventhhighestin2014.SouthAfricahasthebiggestpopulationofthetop10countriescharacterisedbythehighestunemploymentrates.

Table 7.5: Countries with the Highest Unemployment Rate


7.4 GDP per Capita

GDPisthemostcommonlyusedmeasureofthesizeofacountry’seconomyandGDPpercapita is themostcommonlyusedindicatorofthestandardoflivingforthecountry’saveragecitizen.Sinceitisascale-adjustedindicator, itallowsfora faircomparisonbetweencountrieswithdifferentpopulations.SouthAfrica’sGDPpercapita increasedby300% innominal termsbetween theperiods1996 – 2000and2011-2015 (Table 7.6 and Figure 7.6). However,inrealterms,i.e.adjustedforinflation,itincreasedbyamuchmoremodest27%fromR44177 to R55 541.

65

Table 7.6: GDP per Capita in Real and Nominal Values


Figure 7.6: Trend in South African GDP per Capita

InternationalbenchmarkingofSouthAfricanGDPpercapita(Table 7.7)showsthatcomparedtoSADC,SSAandtheAfricancontinentoverall,thecountryhasabetterstandardoflivingandithasmaintainedthisstatusoverthelast20years.Unfortunately,overthelastthreeyearsspecifically,theGDPpercapitaofSouthAfricaandtheseAfricanregionshasbeendecliningduetotheslowdomesticeconomicgrowthenvironmentcausedinpartbysoftcommodityprices.In1996,thecountry’sGDPpercapitawasmuchlargerthantheaverageoftheBRICScountriesbutthisgaphasnarrowedduetorapideconomicgrowthinChinaandIndiaandatonepointBrazilaswell.ThevalueofSouthAfricanGDPpercapitahasconsistentlybeenlowerthantheworld’saverageandthatoftheG20countriesoverthelasttwodecades.


Table 7.7: Benchmarking of South African GDP per Capita (current USD)


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8. QUALITY OF LIFE

Thesuccessofanationisnotonlymeasuredbytheperformanceofitseconomy.Theimprovementinwell-beingandqualityof lifeof itscitizensisalsoimportant.Thereisalsoaviewthatanimprovedqualityof life impactspositively on STI capacity. This section focuses on the key quality of life indicators in the areas of health, education, waterandsanitationaswellastheenvironment.

8.1 Health

As Table 8.1 and Figure 8.1show,althoughthecountry’slifeexpectancyatbirthin2015(62.1years)waslowerthantheworldaverage(71.4years),therehasbeenasharpimprovementfrom55.2yearsin2002.Overthisperiod,theimprovementwashigherforfemales(8.1years)thanformales(5.7years).Thiscanbelargelyattributedtothesuccessfulrolloutoffreeanti-retroviraldrugstocombatAIDSfromabout2005onwards.

Table 8.1: Key Health Indicators

Source: Statistics South Africa “Mid-Year Population Estimates”


Figure 8.1: Trend in South African Life Expectancy at Birth

Despite an improvement in life expectancy, HIV/ AIDS prevalence remains high in the country, rising consistently from10.3%in2002to12.5%in2015.Inabsolutenumbers,itisthehighestintheWorld.AsFigure 8.2shows,adultfemalesarethegroupmostseverelyinfectedwithHIV/AIDS,withaprevalenceof22.2%ofthepopulationin 2015, up from22.0% in 2014 and 19.6% in 2002. As reportedpreviously, theHIV/ AIDSprevalence rate isdecreasingamongtheyouthwhichisapositivestarttowardsachievinganHIV-freenation.

Figure 8.2: Trend in South African HIV/AIDS Prevalence Rate

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It is important tonote that SouthAfricahas reduced itsHIV-infection rate from8% in2008 to1.5% in2015.The increase in HIV/ AIDS prevalence rate is therefore more related to the improved survival rate due to the antiretroviraldrugprogrammethantoadeclineinnewHIVinfections.Thisisagoodexampleoftechnologicalinterventionimprovingthequalityoflife.TheSouthAfricangovernmentisworkingonaplantoproducetheseantiretroviraldrugs itselfby2019throughastate-ownedpharmaceuticalcompany,Ketlaphela,asubsidiaryofPelchem.

8.2 Education

Itisaknownfactthateducationisanessentialelementcontributingtowardsagoodqualityoflife.Variousdatahaveshownthatahigherlevelofeducationisnecessarytoeliminateunemploymentandtoradicallytransformthewellbeingofthosefromdisadvantagedbackgrounds.Theliteracyrateisoneoftheproxyindicatorstypicallyused to measure an improvement in the standard of living. Prior to 2009 , Statistics South Africa (StatsSA) used an individual’s functional literacy such aswhether theyhad completed grade seven todetermine the rate ofimprovementinqualityofeducation.From2009onwards,aspecificquestionaboutliteracyratewasaddedtothe General Household Surveys. As Table 8.2 and Figure 8.3 show,theadultliteracyratehasimproveddrasticallyfrom1996(82.4%)toabout94.6%in2015.

Table 8.2: Key Education Indicators


Figure 8.3: Trend in South African Literacy Rate


Theyouthliteracyratehasalsoincreased,fromahighbaseof93.9%in1996,to97.6%in2007and99.0%in2015.Thereisaminordifferencein literacyratesoffemaleandmaleyouths,withfemaleyouthliteracyratesbeingconsistently higher.

As Figure 8.4 shows,ahighliteracyrateisassociatedwithalargeincreaseofthepopulationattainingatleastsomesecondaryschoolqualification,beitNSC/grade12orpostschooleducation.Thebiggestincreaseintheproportionofeducationalachievementforpersonsagedatleast20yearshasbeenattheNSC/grade12level,risingfrom21.9%in2002to28.0%in2015.Thepercentageofthepopulation(20yearsormore)withtertiaryeducation(14%in2015)isnearlythesameasthatofBrazil.

Figure 8.4: Percentage Distribution of Educational Attainment for Persons Aged 20 Years and OlderSource: StatsSA “2015 General Household Survey”

8.3 Water and Sanitation Themodeandnatureofwaterbeingaccessedbycommunitiescontributessignificantlytothelivingstandardsofthosecommunities.Bothwaterandsanitationareessentialbasichumanneedsandthereisadependencybetweentheseandotherwellbeingdimensionssuchashealth.A lackofaccesstocleanwatermightresult invariouswaterbornediseases.

As Table 8.3shows,thecountryhasincreasedthepercentageofitspopulationwithaccesstoimprovedwatersourcesto93.2%in2015from87.4%in2002.Thesameimprovementhasbeenachievedinrespectofaccesstoimprovedsanitationfacilitiesalthoughthelevelisstillverylow,at66.4%in2015.Thereisstillalottobedonetofacilitatethenationalroll-outofdecentsanitationfacilities,hencethereisascopeforSTItobringinnovativeandappropriatesolutionssuchaslowcostsanitationfacilities.

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Table 8.3: Water and Sanitation Indicators


8.4 Environment

Theenvironmentalfootprintofahumancivilisation,ifnotmonitoredproperlycanhaveanadverseeffectonthelong-termsustainabilityofpredictablequalitylivelihoods.Thismayevenresultinissuessuchasglobalclimatechange.Droughtsandfloodingare themostwell-knownnaturalphenomenathatoccurasaresultofclimatechange.Duetotheabundanceofcoalandindustrialisationwithinthecountry,SouthAfricaisoneofthehighestcarbondioxide(CO2) emitters and it has recently experienced one of the most severe droughts in its history. There havealsobeenisolatedcasesoffloodsrecently.

As Table 8.4 and Figure 8.5 show,CO2 emissions (in metric tons per capita) decreased from 8.94 from the period 1996–2000to8.69during2001–2005butincreasedsharplyagainto9.69intheperiod2006–2010.The2006–2010 level is close to the 1996 CO2 emission of 9.14 metric tons per capita. On the positive side, from 2011 to 2013, the CO2levelhasbeendecreasing.TheNDPacknowledgestheneedforclimatechangemitigationandadaptationpolicies,whichincludethereductioningreenhousegasemissions.

Table 8.4: Key Environment Indicators

Source: The World Bank “World Development Indicators


Table 8.5 benchmarksthelevelofSouthAfricanCarbonDioxideCO2 emission against various regions. In 1996 theproportionofthecountry’sCO2 emissionsinrelationtothoseofallofSADC,was92.82%.Thishasgraduallydecreasedto86.38%in2013asotherSADCcountriesarebecomingmoreindustrialisedandasSouthAfricastartstoreduceitsownCO2 emissions.AsimilarpatternisalsomanifestingitselfinrelationtoSSAandAfricaasawhole.Furthermore,thecountry’sCO2 emission is also declining in relation to BRICS, G20 countries and the rest of the world.

Table 8.5: Benchmarking of South African CO2 emissions


Figure 8.5: Trend in South African Carbon Dioxide Emission

CO2

CO2

CO2

CO2

CO2

CO2

CO2

CO2

CO2

CO2

CO2

CO2

9,69

8,69

8,94

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APPENDIX A: INDUSTRIAL DESIGNS AND TRADEMARKS CLASSIFICATION

Table A1: Industrial Designs International Classification under Locarno Agreement

Source: World Intellectual Property Office


Table A2: Trademarks International Classification under Nice Agreement

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