Universities of Technology as Conduits for

Innovation and Regional Economic Development

in South Africa

SATN Conference 2009

15 - 17th July 2009

CPUT, Bellville Campus, Cape Town

Presentation OutlinePresentation Outline

Introductory RemarksIntroductory Remarks

South Africa’s ChallengesSouth Africa’s Challenges

Tshumisano Trust: Tshumisano Trust: Enabling Enabling Innovations & Knowledge Transfer Innovations & Knowledge Transfer from UoT’s to the Productive Sectorfrom UoT’s to the Productive Sector

Exemplary Strategies for Regional Exemplary Strategies for Regional Economic development - Economic development - RALISRALIS

ConclusionsConclusions

Key Elements for Sustained Economic Growth

Human Capital

Information and Communication Technology (ICT)

Innovation - Diffusion & Exploiting of Science and Technology outputs

Vibrant Entrepreneurial Culture (namely High Growth, Innovative SME’s)

Source: 2001 Organization for Economic Co-operation and Development (OECD) Ministerial Report, The New Economy: Beyond the Hype. OECD, Paris.

Why Small & Medium Enterprises

(SME’s)??

SME’s are central to Economic Growth and

Employment Creation in OECD and BRIC

Countries

Benefit of Economics of Scope rather than

Economics of Scale – nimbleness and

shielded from Exogenous shocks

More likely to offer steadier and flexible

levels of Employment even during an

economic downturn

South Africa’s Growth Challenges

Innovative&

Entrepreneurial firms

Factor/Efficiency-driven Economy Innovation-driven Economy

Regional Economic

Development – The Evolving role

of Higher Academic Institutions

In the past, Universities focused on their core mandates: Teaching and Research

Changing government priorities as well as Budget cuts led to a Universities plays a more active role in society globally referred to as Third Mission:

Participation in industrial development and competitiveness on a regional/local level (LRIS) via a networked approach

Specific focus on Small and Medium Enterprises (SME’s) which are seen as engines for economic growth and job creation

Productive Sector

Education

Advice,Consulting

Interns

Postgraduate students solve

problems & write thesis about it

Updated know-how on currentchallenges >> updated curriculum

Technical services (testing / metrology, prototyping)

Contract research

Academic secondment to industry

Universities

South African Government

Response

“TSHUMISANO”

Tshumisano Trust is an Agency

of the

National Department of Science and Technology

to Strengthen Technology Transfer and

Diffusion Initiatives at Universities of

Technology to Support SME's

“TSHUMISANO”

Technology Stations Programme

This is achieved by Establishing Technology

Stations (Technology Transfer Centers) at

Universities Nationwide

The Technology Stations Programme,

is designed to strengthen and accelerate the

interactions between Universities and SME's.

The Technology Stations funded under this

Programme will play a major role in identifying the

specific needs of SME's and will provide the

adequate technology solutions based on the

Universities' of Technology full potential

to improve the competitiveness of their SME

clientele in selected sectors.

ENVISAGED OUTCOMES

Within the supported SME’s:

Improved competitiveness through world class

products, production technologies or services.

Increasing capacity for continuing technology

assimilation and innovation.

Within the participating Universities:

Improved and enriched R&D as well as teaching and learning activities leading to:

Better understanding of SME needs

TECHNOLOGY STATIONS TECHNOLOGY STATIONS

Location & ScopeLocation & Scope

Agro Processing and Chemical Cluster

• To Support the Chemicals and the Agro-Processing Industry.

• Formulations, Pharmaceutical and the Natural/Indigenous Products, Detergent & Paint .

• Testing and analysis in manufacturing low-end products.

Primary Manufacturing Cluster

• The secondary manufacturing cluster focuses on advanced manufacturing and value adding services within three critical industrialized sectors

• Specialises focus is in product development and prototyping

• Application of Smart materials, textiles and reverse engineering

Secondary Manufacturing Cluster

• This is a support cluster with service of system automation and processing of materials.

• Material compositions and casting (foundry) solutions.

18

IAT_ ProjectIAT_ ProjectManagement UnitManagement Unit(Advisory Board)(Advisory Board)

Tshumisano Tshumisano TrustTrust

CEOCEO

National Tooling National Tooling CoordinatorCoordinator

IAT_WCIAT_WC

StellenboschStellenboschUniversityUniversity

IAT_ECIAT_EC

Walter Sisulu Walter Sisulu UniversityUniversity

IAT_GPIAT_GP

TshwaneTshwaneUniversity University

of of TechnologyTechnology

StructureStructure

Summary of Activities Summary of Activities

FY2008/9FY2008/9

Are We doing Enough as

Compared to Our

Competitors?

Zhongguancun Science Park

Started 1988:

Employees over: 1 million people. Incubate over 20 000 High Technology SME’s

Well know graduate: Lenovo

Addressing Regional

Economic Challenges - The

RALIS Initiative in the South

African Clothing & Textile

Industry

The Role of the Local

University of Technology:

CPUT as a Case Study

Clothing and Textile Technology Station

(Technology Transfer Center)

Situated at the Cape Peninsula University of Technology in Western Cape

The Technology Transfer Center was established in 2001 with funding from the National Department of Science and Technology

TSP was established by through an implementation agency called the Tshumisano Trust

It provides innovative solutions and skills development to SME’s in this industry to ensure they are globally competitive in terms of product and process innovation

The sector is concentrated in Kwazulu-Natal and Western Cape Provinces

It employs over 150,000 people in South Africa

There are approx 2,000 active clothing, textile, footwear and leather companies of which 80% are clothing and textile industries

86% of these companies are classified as SME’s (employing less that 500 employees)

This industry generated sales of R34 billion to total manufacturing output – however only 20% of it is exported

Challenges to the

Clothing & Textile Industry in

SA

Cheaper imports from low cost countries

Proliferation of illegal imports and dumping of clothing and textile products

Low output per employee in SA firms

Low level of Technology investment and upgrades by SME’s

Emergence of world class manufacturing practices in competitor countries

Threat posed by Global Value Chain phenomenon

Role-players in the Clothing and Textiles Industry in Western Cape

Access to GovernmentalSkills Levy

Clothing and Textile Firms(SME’s)

CPUT TSCTProduct/Process

Improvement & Testing

CLOTEXAccess to mentorship, training and

Information on trade contracts

UNIVERSITIES OF TECHNOLOGY

Access to Industry relatedTraining and Experts

CTFL-SETAFunding

of Training

TEXFEDTrade matters and

Legislative changes

Rapid Appraisal of Local Innovation System

(RALIS): The Case of the Clothing & Textile Industry

A methodology that could yield, within a short period of time,

• a diagnosis of the main features of a local innovation system

• main mechanisms and bottlenecks in innovation, technology upgrades and knowledge transfer in a specific industry

• a number of proposals for practical activities to strengthen the local innovation system and thus improve competitiveness especially amongst SME’s.

It is a rapid, practical, bottom-up participatory, network stimulating and innovation – oriented approach to value chain development and Local and Regional Development

Process of Initiating and Executing the Clothing and

Textile RALIS

The RALIS process started with a major stakeholder meeting, represented by all 4 pillars in 2004

Bottlenecks within the Clothing and Textile value chain with specific focus on SME’s in the sector was highlighted

The participatory diagnostic engaged 90 leaders and senior managers across the whole sector value chain

Innovation systems and processes along the value chain was diagnosed, identifying opportunities to improve the competitiveness of the sector – by means of innovation and technology

A limited number of practical proposals, championed by recognized key actors in the industry was then agreed upon – categorized as quick wins, medium and long term activities

Outcomes of the Clothing and Textile RALIS

15 quick win, medium and long term proposals to address key issues such as marketing, productivity, quality and service levels was the result

In 2008 an assessment of the outcome and impact of the RALIS was conducted

Out of the 15 initiatives identified, 80% was realized

The RALIS led to a plethora of collaborative activities among key industry stakeholders – not willing to work together prior to the exercise i.e. encourage clustering

It established basic methodologies which now enable stakeholders and companies to work together more effectively

Conclusions & Policy Recommendations

UoT’s can and do play as critical role in regional economy in terms of:

Innovation upgrade

Skills Development

They can act as “magnets” to attract troubled companies in key regional industries to share best practices & learning through clustering activities

Going forward, there is a need to expand the work of Government entities such as Tshumisano to enhance the role of UoT’s in local, regional & national economic activities

THANK YOU!!THANK YOU!!