Download The role of science in the industrialization of the SADC region

The role of innovation in the industrialization
of the SADC region
Dr Thulani Dlamini
VP: Strategic R&T
Sasol
Historical Perspective on Industrialization
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Key Drivers
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Increase in local demand for goods and
services
Changes in income levels, quality of life
and education etc.
Availability of skilled labor
Maintaining momentum
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Creation of new trade networks
Availability of relevant resources including
capital
Culture of innovation and entrepreneurship
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SADC vision for Industrialization
2015 SADC produced a report “SADC industrialization strategy and roadmap – 2015 2063”
● Regional integration as a driver for industrialization and economic growth
● Competitiveness at industrial, country and region level,
● Economic and technological transformation
● Accumulation and dissemination of knowledge,
● Development modern infrastructure and human capital
Strategy viewed as a modernization strategy of the region
Science and technology are important enablers of the strategy
Higher levels of growth and deeper structural transformation required, due to poor
initial development conditions
Maintaining momentum
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Global Competitiveness of SADC countries
SADC GDP at $580 bn, with a growth of 5.14% (2011)
GDP per capita of the region at $2157, compared to India and Brazil at $1719 and $8587
respectively.
Services accounts for 51% of GDP, Industry at 32% and Agriculture at 17%
Except for South Africa and Mauritius economies of most SADC countries are factor
driven and depend on quality of: (WEF, GCI 2012 – 2013)
● Institutions
● Infrastructure
● Macro economic environment
● Health and primary education
Shift to efficiency driven and later innovation driven economies necessary for global
competitiveness.
Maintaining momentum
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SADC Industrialization an imperative
Average human development index for the region is 0.5 indicative of
● Low Life expectancy
● Low years of schooling
● Low income levels
57.4 % of the population lives on ≤ $1.25/d (2009)
● Anyone living on ≤ $ 2 / d considered poor
Gini co-efficient for most SADC countries above 0.5
Exports dominated by resources – coal, ferrous metals, copper, manganese, platinum,
gold, diamonds etc.
Intra SADC trade only 10% of total exports from the region, although SADC population
over 270m.
75% of workers in ‘vulnerable employment’ – poor working conditions, low productivity
and inadequate earnings
SADC industrialization needs to move from academic discussion to real implementation
Maintaining momentum
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Barriers to industrialization
Low productivity levels
● Declaration of productivity in 1999.
Infrastructure deficit
● Regional Infrastructure Development Master Plan
(RIDMP)
Scarcity of skills – especially advanced
skills
High cost of doing business
Availability and cost of capital
Energy deficit
Access to state of the art technologies
Water scarcity
Maintaining momentum
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Industrialization: Role of government
South Korean example:
● Build capability – mainly human capacity development at all levels and infrastructure
● Accelerated introduction of foreign technologies; local development and export
● Implement legislation that supports science and technology
Introduce and implement policies and strategies that support
industrialization
● Provide a secure foundation for scientific and technological growth
● Prioritize the development of industrial technology
● Create a favorable climate for science and technology through legislation
Maintaining momentum
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Using foreign technology to drive innovation: Sasol
Anglovaal acquires
rights to use FT in
SA
Sasol 2 and 3 based
on locally developed
technologies
First product
produced using fully
imported technology
<1937
1950
1955
1979
International
acquisition to grow
chemicals business
1980s
1990s
2001
Sasol is privatized
and listed in the JSE
Sasol Incorporated
as a state owned
entity
Maintaining momentum
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2003
Gas from
Mozambique
2nd GTL plant in
Nigeria
2004
2007
2014
Listing in the NSE
Launch of local and
international
chemicals business
from FT
1st GTL plant in
Qatar
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Challenges to be addressed by state interventions vis a
vis SET & Industrialization:
Develop strong policy foundations that will address public perception and
interest in SET
Develop strong institutional organizations as well as research & development
systems to attract and retain the right talent for SET and drive for excellence
Address the limited scientific manpower with skewed distribution – limits
possibility for multidisciplinary R&T
Move beyond heavy reliance on imported technologies – limited ability for
localization
Deal with lack of research equipment and information resources
Develop the ability to fully /properly assess economic impact of R&D leading to
an optimal innovation portfolio
Improve co-operation between “producers” and “consumers” of technology.
Maintaining momentum
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Human Capital Development : A key enabler
Increased spending in education at all levels – what are current spending levels
for SADC
Refocus education systems to create a balance between technical and
vocational training
Tertiary education to produce the correct number and quality graduates in
STEM education
Closer working relationship between HEIs and industry to produce graduates
that are relevant to the economy
Create regional quality standards to facilitate movement / application of human
capital in the region
Maintaining momentum
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Possible Growth Pillars for the SADC economy
Domestic demand increase
Export maximization
Agriculture economy
Service industry development
Natural resource utilization
Domestic, regional and global value chain participation
Maintaining momentum
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Opportunities to create a comparative advantage for the
region
Create symbiotic relationships between feeder and leader industries
Introduce technology that is appropriate for the level of development
Diversify and broaden the industrial base
Address the industrial and technological gap, through targeted catch up mechanisms
Develop viable regional value chains to access global markets
Focus on youth and women
Shift from factor accumulation growth – employing more labour and capital to total factor
productivity – efficiency of deployed resources
Maintaining momentum
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Public / Private Sector Engagement – the missing Link!
Private sector must be involved in the development and implementation of
industrialization strategies
Create platforms for regional dialogues between state, private sector and
society on industrialization
State policies to be informed by private sector requirements in order to
improve alignment and ease of doing business in the region and globally
SADC states to provide mechanisms and incentives for the training and
development of entrepreneurs and SMMEs
Maintaining momentum
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Conclusions
The development of human capital at all levels is an absolute necessity for any
industrialization endeavor.
Investment in infrastructure and state of the art technologies, relevant to the regions level
of development, must be prioritized.
A conducive SET policy environment must be created to support scientific excellence,
innovation and entrepreneurship.
Significant improvements in factor efficiency and regional integration are required to
achieve global competitiveness
A two pronged balanced approach must be considered for industrialization based on:
● Maximum value addition of local resources
● Importing foreign technologies to drive diversification, import substitution and export expansion
Maintaining momentum
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