||South Africa: Technology Innovation Agency CEO Outlines Lab-to-Market Priorities for 2013
||Thursday, November 14, 2013
Electronic and Mobile Government, Institution and HR Management
||Nov 14, 2013
Moving new technologies and innovations from laboratories to industrial production is difficult everywhere, and the gap between the laboratory and the factory is often called the innovation chasm. “Our job is definitely to bridge that innovation chasm – to move people’s ideas from labs to industries,” explains TIA CEO Simphiwe Duma. “That is how you remain globally competitive.” During the 2011/12 financial year, the TIA invested R274-million in projects and “leveraged” another R424-million from various partners. In addition, it has cooperated with the Industrial Development Corporation to coinvest in projects that are worth more than R200-million.
“We’re a new agency – everything we’re doing is new,” he highlights. “As an agency, we’re looking at complete value propositions – IP (intellectual property), skills, infrastructures to support technologies, the environment and the commercial base.” The agency’s plans for this calendar year (the TIA actually works according to government’s financial years, starting on April 1 and ending on March 31), in addition to continuing projects already under way, include the launching of three major new programmes. These will be the electric vehicle programme, the Centre for Technology Innovation in Mining and Minerals and the Venture Capital Fund.
When it was set up, the TIA assimilated seven pre-existing entities which had separately and independently sought to stimulate innovation in different sectors. As part of the merger, the TIA had to accept all the assets and liabilities of its predecessor bodies. One of the projects it inherited was the Joule electric car. Although a technical success, the Joule was a commercial failure. The problem was that the car had been developed in isolation and fundamental issues had been ignored. Perhaps most importantly, there was no recharging infrastructure in South Africa to support the car and consequently no one was interested in buying it.
“We’ve learnt our lesson,” assures Duma. “Before March 31, the biggest project we’ll undertake is the launch of the electric vehicle programme. This will look at everything required for an electric vehicle industry in South Africa – the recharging infrastructure, battery technology, information technology systems, interfaces with the electricity network, and so on.” Other matters that will be examined will include the use of renewable energy to supply local vehicle recharging stations, and the various electric vehicles that are already available or that could be developed in the near future.
The programme will require the TIA to work with all the relevant original-equipment manufacturers and universities and to assist in the development of the necessary skills.
“We already have some agreements in place and others we are working on,” he reports. “We want to make sure that we don’t leave anybody behind.”
The plan is that the anchor university for the programme will be the Nelson Mandela Metropolitan University, in Port Elizabeth, in the Eastern Cape province, and that the programme will be launched by the end of February. “One of the reasons we’re targetting the Nelson Mandela Bay [metrocity] is that they are starting to develop a rapid bus system,” he states. “We want to engage with them about their public transport needs.”
All the agencies and institutions involved in the electric vehicle programme will also seek to develop a vision – currently known as Vision 2025 – for the development of a “vibrant” electric vehicle infrastructure in South Africa. This would answer questions such as – what would be required to be done between now and 2025 to create this infrastructure?
“Hopefully, we will also have a business case by then. If it doesn’t make commercial sense, it won’t go far,” he points out. “We have to do it from a technology innovation point of view, and avoid fragmentation of effort. That’s why we’re trying to get everybody involved. Anyone with a suitable [electrical] storage system should come to us.” The programme will involve “live experiments” with vehicles and infrastructure, and it is hoped that by 2025 there should be electric vehicles operating regularly around the country, if not yet in widespread use.
South Africa also has a national hydrogen and fuel cell technologies research, development and innovation strategy, known as HySA, which also falls under the DST. It is a 15-year programme approved in 2007 and officially launched in September 2008. The underlying concept is that a greenhouse-gas emissions-free hydrogen economy will develop around the world, which will increase the demand for platinum-group metals (PGMs – even if the loading of PGMs in individual systems continues to decline). One of the areas HySA is working in is the development of hydrogen- fuel-cell-powered vehicles.
Duma does not see the electric vehicle programme as in any way duplicating any aspect of the HySA programme.
“HySA is not supportive just of vehicles – it is supportive of many other things, such as [telecommunications] base stations and back-up power to large buildings. Fuel cells are a difficult technology. They may work for vehicles, they may not. (The same applies to batteries.) There are also the modalities of the ease of their use. Fuel cell technology is slightly expensive right now. If you apply it to a vehicle, you need to do a cost-benefit analysis. But hydrogen fuel cells also have lots of other opportunities.” Moreover, it would not be wise for the country to put all its vehicle technology eggs in one basket.
‘Ecosystem’ for Mining
“The Centre for Technology Innovation in Mining and Minerals is a new innovation by us,” he affirms. “It will look at technological innovation in mining. We’re looking at this because mining is a critical sector for the country. We want to remain globally competitive and stimulate activities in the sector. Mining used to have large, cheap, labour forces, the lowest-cost electricity prices in the world and energy-guzzling habits. You could be inefficient and still make a profit. Today, labour is not cheap, energy is not cheap. How do you remain globally competitive?” The centre is also scheduled to be launched before the end of the first quarter of this calendar year. “We expect some contributions from industry to strengthen it.”
Again, the TIA’s approach is to bring together as many researchers, institutions and mining companies as possible, in order to accelerate any technological innovations that could be used by the mining industry. “With the centre, we’re saying, ‘Let’s optimise our resources and ensure mining innovation is not all fragmented’,” he urges. A further objective of the centre will be to encourage the retention of researchers in the mining sector. Institutions are losing mining engineers and other specialists at an alarming rate, often due to them obtaining better renumeration elsewhere. “We want to retain this expertise and develop new IP.”
The TIA is already in talks with the Council for Scientific and Industrial Research (CSIR), which has a Mining Innovation unit, and minerals and metallurgical processing and engineering research and development (R&D) agency Mintek, as well as other agencies. “We’re talking to everybody. We’ve been talking to industry and universities. This has been cooking for some time. All will be part of this as all of them have specific areas in which they work,” he states. “Some details still have to be worked out. But the creation of a framework is something we’re moving forward on.”
As with the electric vehicle programme, the TIA is seeking to review all the resources the country has in the mining sector. The agency is taking a systems level perspective, looking at everything from the development of IP to the industrial production of a new technology. “We’ll be looking at the whole value chain, including energy systems for mining and safety regulations and tolerances, as well as the environment,” elucidates Duma. “The mining industry has changed out of all recognition. You can’t just pollute willy-nilly anymore. Acid mine drainage (AMD) is not something that the industry will get away with in the future.”
Currently, there are a number of mining technology and innovation projects taking place in the country, including a significant number of small projects. The TIA wants to bring all these together, including the small ones, through coordination provided by the new centre. “In essence, let’s create an ‘eco- system’ that works well for us. Australia already has such a thing,” he sums up. “But it is also important to have an ecosystem that supports the use of ecofriendly renewable energy and that needs to deal with AMD and other environmental issues.”
Running the Risk
South Africa does not have a venture capital sector in the way the US has, in which private-sector investors are willing to run high risks to fund the development of new products and technologies long before they are in a position to generate an income, let alone profits. “The South African private sector is very cautious. Risk aversion is too high to fund technology innovation,” he points out. “And technology innovation is very risky. The current benchmark is that, out of every ten projects, nine will fail. US venture capitalists are willing to take those risks, for the one that succeeds will generally outweigh the nine that fail. But the South African private sector is not willing to take these risks. That’s why we have the TIA.”
What is called venture capital in South Africa remains risk averse by US standards, and generally wants to see an income flow before it will invest in an innovation. But without post-R&D funding an innovator cannot get to that point. “People need second and third round funding, just when they’re taking off. We’ve identified that gap, and we will fill it,” asserts Duma. “We will launch our Venture Capital Fund early this year. We have budgeted R100-million for it. Hopefully, we’ll get other partners in and increase the amount.”
In the US, venture capitalists are very much hands-on with their investments. They invest not only in the new product or technology, but help turn an R&D operation into a proper business, providing expertise that the innovator lacks. They can help organise, structure and staff the new business. They do this to maximise the chance the new product or technology will be a commercial (as well as technical) success. The TIA plans to facilitate the same thing for local innovators and their start-up companies.
Meanwhile, the TIA is undergoing the process for ISO 9001 certification, which, it is hoped, will be awarded this year. In the 2011/12 financial year, it increased its number of provincial offices from four to six by adding the Free State and Limpopo to Gauteng, KwaZulu-Natal, the Eastern Cape and the Western Cape. It is expected that these six offices will be able to serve all nine provinces.
Countrywide, the TIA funds 13 technology stations and 15 technology platforms. These are largely located at the country’s universities of technology and serve to provide small and medium-sized enterprise (SME) innovators with sophisticated equipment and technical skills. To date, more than 1 700 SMEs have been helped with the development of new products.
In addition, the TIA operates the only institutes for advanced tooling in the country. Known as tooling stations for short, there are three of these – at the Tshwane University of Technology, the University of Stellenbosch and the Walter Sisulu University of Technology.
During the 2011/12 financial year, these supported 99 SMEs in the design and small-scale manufacture of new products.
“In essence, in the end, we don’t compete with anybody,” concludes Duma. “We work with everybody. We plug gaps.”