Presentation to NCPC and Manufacturing Indaba
KZN
22 July 2015
Jayesh J Ravjee
Introduction
The TLIU was established to assist the South African manufacturing sector to enhance
their capability to participate in the infrastructure rebuild programme.
Expected Goals
• Innovation
• Technology Transfer
• Product Development
• Human Capital Development
Import Substitution
• Export capability development
• Facilitating R&D
• Facilitating access to markets
History of “Incubation” in SA
• SBDC Hives
• ESCs
• LBSCs
• LIPs
• ‘Incubators’
• 1st Manufacturing Incubator 1994 CSIR
• Godisa Programme(2002)- Godisa Trust to STP (2006)
• Seda = Namac, Ntsika, Godisa, NTTC, TWIB, TAC
• ISP, Jobs Fund, Seda
• Are we now creating High Technology Localisation and Knowledge-intensive Incubators?
Primary Goal of Business “Incubation”
What’s all this HIVES, ESC’s etc How Can We use
this in Localisation moving from Tier 3 to 1 to OEM?
The primary goal of business incubation is to facilitate
economic development by improving the
entrepreneurial base (of a local area, town, province,
country…) through the provision of infrastructure and a
variety of business support services
Effective Models for technology / skills transfer…….? Can it be applied to Localisation ? We now have several “hybrids”.
Model B - Innovation Support CentreTests, Optimises and Commercialises New Technologies
South Africa- NO Longer, European BICs, USA, Hong Kong, Czech Republic, Poland,
Model C - Technology Demonstration CentreSector Focus - Demonstration / Upgrade of Technologies - Value Added
South Africa, Zimbabwe, Kenya, Ghana, Jordan, Viet Nam, Hong Kong
Model A - Technology IncubatorsProtected Environment to Support Technology “Start Ups”
South Africa, Hong Kong, UK, USA, Hungary, Russia, Portugal, Jordan, Ghana
Problem tree for TLIU
Low entry rates ofSMMEs into
manufacturingsector
Poor access tofacilities for
testing &promotion of
ideas
High failure ratesof start-up SMMEs
Poor technologysupport to Companiess
Outdatedtechnologiesemployed by
Companies
Low rates of
economic
growth
Weak
competitiveness
on global
markets
Insufficient
levels of value
added in
industry
Low levels of
productivity
Insufficient rate
of technological
innovation
High unemployment& poverty particularly amongst
previously disadvantagedgroups
Problems to be addressed
by TLIU
Problems to be addressed
by outcome of activities
Problems to be addressed by
longer term impact of programme
Exogenous Factors?
Market Dynamism
Comp/coop/cluster
Outward orientation
Trade regimes
State procurement
Distribution
Designation
Business Culture
Societal activities
Regional Culture
Assoc./Chambers
Mobility/flexibility
Self-reliance/network
Firm-Level Strategies
Sector –Level Strategies
Continuous Localisation
Human Resource
Strong universities
Strong Technikons
R&D capability
Entrep. dev./tech. mgmt.
Expat nationals
Health
Finance Dynamism
Bank system
Credit/criteria
Risk capital
State support
Alliances
Direct Support
Universities
HEIs
Counseling
Training
Information
Business incubators
Tech parks
Macro Dynamism
Enabling policy
Growth/stability
Taxation
Labor/comp. laws
Innovation strategy
Policy & Localisation Business System
INPUTS
17/7/03 8
Context: economic growth, equality and SMMEs
Issues:
• Large number of SMMEs
o Notably survivalist /informal PDI firms.
o Employment creation
o Designation/Localisation
• From resource- towards knowledge- based economy:
o Need to strengthen value added and boost export ledgrowth.
• Black economic empowerment:
o Exclusion from 'levers' of economic growth and fair share in wealth.
9
Context: the national system of innovation
Issues
• Very low research intensity - public and private sectors;
• Weak commercialisation (low patenting rates, etc.)
• Limited SET skills base – ageing and not reflectingpopulation ethnic mix;
• Dominance of a few (larger) firms and sectors in terms of available Government funding for innovation;
• Limited existing mechanisms for fostering technology transfer.
Instruments to be used
Direct Support Systems
Indirect Support Systems
Technology Innovation Incubators
Green Fund
MCEPScience
Councils
SEFATechnology
Commercialisation Fund
Technology Transfer Grants
11
Business Incubation
Finance
Inputs
Entry
criteria
Strategic dimension
Stakeholder
objectives
Management
skills
Opportunities
Process Outputs
Pre-
incubation
Exit
criteriaIncubation
Post-
incubation
Target
market TrainingBusiness
advice
Financial
support
Technology
supportGraduation
Effectiveness
Sustainability
Efficiency
Operational dimension
Relevance
Impacts
Incubation processes & services
12
Establishment of a new “Localisation” Incubator
Good practice
Considerations for designing/defining a new Centre
Incubator
type
Services to
be delivered
Target
beneficiaries
Partnership
agreements
Physical
location
Legal status
Defining
factors
Actions to be
implemented
Incubator type - e.g. general-purpose, sector-based, etc.
Legal status – appropriate type of legal entity
Physical location – where it is most convenient to locate the incubator, taking into account regional economic context, needs of entrepreneurs, existing SMME support services
Partnership agreements – with local role players with which incubator will interact to deliver its services
Target beneficiaries – identification of who is mainly to benefit from the incubator services
Services – definition of services and the key qualifications of the incubator, taking into account entrepreneur needs, existing support services and partnerships
Actions – programmes & projects to be designed and/or managed by the incubator to achieve the strategic goals
Jon Burns
TLIU Model - The Localisation Support Mechanism
People
with Ideas
People
with
Designs
People
with Inventions
Analysis
Testing
Prototyping
Utility ReviewIntense Support
Optimising
Market testing
Commercialising
Packaging
PricingDistribution
Enhanced/New
Products
Enhanced/
New Businesses
JOBSWEALTH
TLIU catalyse and facilitate the development of “blue prints” into commercial products. The focus is on the technology localisation.
WHY LOCALISATION
• They are aimed at promoting development throughout the RSAand are found in the three spheres of government and some area partnership with the private sector
• They are Catalytic in nature with ripple effect and havepotential to take the RSA to a higher trajectory of economicgrowth and development
• They have a major infrastructure component in the projectcontent.
• They support radical spatial, social and economic transformation
• They are based on multi-year inter-governmental and inter-departmental collaboration and cooperation and in partnershipwith the private sector
• They promote and support economic development and jobcreation and will lead to improved service delivery, entrenchingof good governance, deepening of democracy andstrengthening partnerships
• They are clustered in three sectors: Economic Cluster, SocialCluster and Governance and Planning Cluster.
14
Broader Role of TLIU
CURRENT CURRENT
FUTURE
FUTURE
SOCs SOCs
Some Gauteng-based Infrastructure
Development
GAUTENG TRANSFORMATIONS
17
4 TRANSFORMATI
ONS
Radical Economic Transformation
Decisive Spatial Transformation
Accelerating Social
Transformation
Transformation of the State and
Governance
• Intervention in key sectors of the economy and unlock growth & employment
• Empower blacks, women & youth• Revitalise township economies
• Develop the GCR Master Plan made up of transport plan and
• Integrated human settlements & new cities
• Modernise education• Improve public health and rollout NHI• Tackle poverty and social dev challenges• Improve safety
• Build a developmental state through better organisation and professionalisation
• Promote activist, purpose-driven government
• Promote active citizenry and community mobilisation
GAUTENG MODERNISATIONS
18
4
MODERNISATIONS
Public Service
Economy
Planning of Human
Settlements
Public Transport
• Build green & smart public service• Build connected government, vertically
& horizontally • Government to people/ People to
government
• Deployment of research, innovation science & green and blue technology
• Promote green and high density settlements
• Breaking down apartheid spatial plans and build post-apartheid cities
• Planned urbanisation & urban development• Radically improve better planning, public
transport and urban decay• Single ticketing system & integrated road
network
GAUTENG RE-INDUSTRIALISATIONS
19
2
RE-INDUSTRIALISATIO
NS
Take a lead in Africa’s new industrial
revolution
Re-industrialize Gauteng & SA
• Ekurhuleni: Revitalisation of manufacturing, beneficiation, BPO (heavy industry, steel, & engineering)
• Automotive industry in Tshwane including cultural and economic tourism
• West Rand: Green economy, agro-processing, revitalisation of mining land
• Johannesburg: Financial services hub and BRICS regional bank
• Sedibeng: New Metro, River City, ecotourism, steel industry
• Review trade relations with SADC region and the continent
• Implementation of Game Changers to reposition the GCR as a leader in industrial revolution
© CSIR 2006
www.csir.co.zaSlide 20
Daimler Chrysler Sisal Project
Impact - Current Projects
Company Assisted: SWASAP• Through the TAP implemented at SWASAP the
company achieved an EN13261 accreditation
from the Duetsche Bahn
• Only axle manufacturer in South Africa
• The company can now supply axle to Europe
and North America
• SWASAP have been awarded contracts from
Bombardier to supply axles to projects in
Riyadh, Queensland and London.
• The export orders to these 3 projects
exceeds a total R 50,000,000.
• SWASAP will be a preferred supplier of axles
to be used on the 1064 locomotive build
project as well as the PRASA rolling stock
project
Impact - Current Projects
Company Assisted: Adventure Power• This company is the only local
manufacturer of medium sized wind
turbines.
• The local content of the wind turbine
manufactured is estimated at 70%.
• The TLIU assisted Adventure Power with
technology interventions that allowed the
company to comply with international
standards for wind turbine manufacturers as
defined by Germanischer Lloyd.
• Through the technology implemented that
company can now produce one 16 m wind
turbine blade per day as opposed to a lead
time of a month previously.
• The company has sold and installed a total of
six 300kW wind turbines.
• This has resulted in the creation of an
additional 21 jobs at the company.
• Currently the company is working on
export orders to the Phillipines
Partnerships/ Collaboration
• Transnet Engineering
• Eskom Supplier Development
• Eastern Cape Development Corporation
• SKA
• OEMs (Bombardier, ABB, Alstom, AREVA, etc)
• National Foundry Technology Network
• Academic Institutions
• SEDA
• Productivity SA
• Gibella
• KEMA
• Technology Stations
• GIZ – Skills for Green Jobs
• DST Regional Innovation Forum Portal
Lessons Learnt
• Utilization of home grown talent and expertise• One size does NOT fit all• The primary objectives must be the sole focus of localisation• Support and commitment of Management and all stakeholders• Well resourced support team• Localisation is a business• Proper monitoring and evaluation systems• Marketing of successes• “SIMPLE” processes• Networking• WIN-WIN-WIN
Rather try and fail then fail to try!
Questions
Thank You
Together Lets Do More by Supporting Localisation
Jayesh Ravjee