PRESENTATION TO THE PORTFOLIO COMMITTEE ON SCIENCE AND TECHNOLOGY19 APRIL 2012

THE INNOVATION CHALLENGE

Invention

Context

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Innovation +

Market

The innovation chasm

4

THE IDEAS, RESEARCH AND DEVELOPMENT

COMMERCIAL INDUSTRIES AND MANUFACTURING

VALLEY OF DEATH

THE TIA MANDATE“BRIDGING THE INNOVATION CHASM”

The TIA Act [No 26 of 2008]

“The object of the Agency is to support the State

in stimulating and intensifying technological

6

in stimulating and intensifying technological

innovation in order to improve economic

growth and the quality of life of all South

Africans by [supporting*] the development and

exploitation of technological innovations”

TIA

Bridging the innovation chasm

7

COMMERCIAL INDUSTRIALISTRIES

AND MANUFACTURING

THE IDEAS, RESEARCH AND DEVELOPMENT

Our Vision & Mission

Our Vision

To be a world class innovation agency that supports andenables technological innovation to achieve socio-economic

Vision and Mission

enables technological innovation to achieve socio-economicbenefits for South Africa.

Our Mission

To support technology innovators to unlock South Africa’sglobal competitiveness and deliver socio-economic value.

Private Equity

IP V

alue

Proposed TIA Support

Low Risk/

High Return

High Risk/

Uncertain Return

TIA geared towards addressing “market failure ”and building bridges and institutional linkages along the innovation value chain :

Partnerships

9

PPP’s

Basic Research Applied Research Tech Development Manufacturing

IP V

alue

Proposed TIA Support Partnerships(e.g. IDC, NEF)Partnerships

(e.g. NRF)

The TIA will focus its financial and non-financial offerings along the innovation chasm, and will operate with the required flexibility across t he innovation value chain through mobilising

and leveraging national, regional and international partnerships

Investment Risk

Mini-grants

Matching grants/ loans

Accumulative Investment

Fin

anci

al P

rodu

cts

Offerings across the value chain

10

Basic research

Applied research &

developmentCommercialization Production

Equity Financing

Market Analysis

IP Rights

Technology Platforms

Tech Transfer Brokering

Business Support Internationalization

Entrepreneurial Networks

Non

-fin

anci

alS

ervi

ces

Fin

anci

al P

rodu

cts

Technology Stations

Basic researchProof ofconcept

technical development /commercial

planning

Product &business

development

Businessstart-up(scienceBased )

Businessgrowth

IdeaGeneration

& Development

Phase 1

Phase 2Phase 3

Phase 4

ExpansionEarlyexpansionStart-up

Seed

Funding Value Chain

Universities

Science Councils

DST, DoE & NRF

TIA Support IDCOther

Industry

KEY INFLUENCES

Who is a TIA customer ?

Where do you find them?

• Technology Innovators

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• HEI

• Science Councils

• State Owned Entities

• Private Companies

• Community

The TIA Stakeholders

INNOVATOR INVESTOR

TIA

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CITIZEN

TIA

TIA is at the confluence of the needs and aspiratio ns of these stakeholders.

Stakeholder needs (1)

The Innovator - Higher Education Institutions; Science

Councils; State Owned Entities & Private companies

• Commercial & technical expertise

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• Responsiveness and reliability

• Customer centric products & services

• Supporting infrastructure

• Access to technology innovation eco-system

• Sound advice

INNOVATOR

Stakeholder needs (2)

Investor - DST, Government Departments and Agencies;

Provincial and Local Government & Industry

• Technical acumen

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• Commercial acumen

• Sound governance

• Risk mitigation

• Return on investment

• Rigorous ongoing monitoring & evaluation

INVESTOR

Stakeholder needs (3)

• Technology solutions to humanity’s problems

• Security

Communities

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• Education

• Employment opportunities

• Systems level planning

• Improved quality of life

CITIZENS

ALIGNING TIA TO THE STAKEHOLDER’S NEEDS

TIA Strategic objectives (1)The Balanced Scorecard Approach

Financial

1. To support the development and demonstration of

technology based products, processes and services

2. To support the commercialisation of technology

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Stakeholder

3. To develop an enabling environment for technology

innovation and commercialisation in South Africa.

2. To support the commercialisation of technology

innovations.

TIA Strategic objectives (2 )The Balanced Scorecard Approach

Internal Business Processes

4. To develop an enabling environment within TIA to

successfully execute its strategy.

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Learning and Growth

5. To facilitate the development of technology innovation skills to

support technology innovation and commercialisation.

6. To become a schedule 3B entity in terms of the Public

Finance Management Act.

ALIGNING TIA TO THE GOVERNMENT’S OUTCOMES AND DST POLICY MANDATES

Link to government outcomes

Government Outcomes Description TIA’s role

Outcome 2 A long and healthy life for all

South Africans

Stimulation of PPP’s in drug

development of priority diseases

and investments in projects

aimed at improved healthcare

Outcome 4 Decent employment through

inclusive economic growth

Investments in projects in

economic sectors identified in

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inclusive economic growth economic sectors identified in

NGP (Agric value chain, Mining

value chain, Manufacturing,

Tourism and High-level Services)

Outcome 5 A skilled and capable workforce Though TIA’s ISD initiatives aimed

at developing skills for innovation

Outcome 7 A vibrant, equitable and

sustainable rural communities

and food security

Investment in projects aimed at

improved cattle farming, crop

production, agric exports,

knowledge transfer

Link to DST’s Ten -Year Innovation Plan

•Tia will facilitate Health Sector collaborations with HEI’s and SC’s

•TIA hosting South African HIV/AIDS Platform (SHARP); South African TB Research Initiative and SA Malaria Initiatives

•BioPharming Platform; Biosafety Platform and the Omics platforms

•New Animal Health Cluster

Strengthening the Bio-economy

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•Among the sectors that TIA intends to focus on is Energy.

• The main focus being clean and renewable energyEnergy Security

•TIA will assess projects that are supportive of the Climate Change programme.

•New Electric Vehicle Platform

Climate change

THE TIA SECTORS

Choice of TIA Sectors

ECONOMICDrivers - Productivity and

competitivenessHurdles encountered - Technology development, investment and HCD

SOCIALDrivers - Knowledge base

Hurdles encountered - poor quality public education

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ENVIRONMENTALDrivers - Resource optimisation

Hurdles encountered - Technology development

Technology Innovation

TIA Sectors (1)

• TIA evaluates technology applications from all

sectors indiscriminately

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• The following sectors have been identified for

emphasis from an inherited portfolio and South

Africa’s economic influence/ priorities

TIA Sectors (2)In

dust

ry/E

cono

mic

Sec

tors

Cross-Cutting Technology Sectors

Agr

o S

ecto

r

Hea

lth S

ecto

r

Ene

rgy

Sec

tor

Min

ing

Sec

tor

Industrial Biotech

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ICT

Advanced Manufacturing

Indu

stry

/Eco

nom

ic S

ecto

rs

Agr

o S

ecto

r

Hea

lth S

ecto

r

Ene

rgy

Sec

tor

Min

ing

Sec

tor

OFFERINGS THROUGHOUT THE VALUE CHAIN

TIA offerings

1. Funding

2. Business Support & Strategic Partnerships

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3. Technology Development Infrastructure

4. Innovation Skills Development

Funding

Royalty -grants

Technology & Development

Youth Technology Innovation

Industry Matching

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30

Royalty -grantsLoans, EquityIdea

Development Venture Capital

CUSTOMER CENTRIC SOLUTIONSALONG THE INNOVATION VALUE CHAIN

The five funding instruments of TIA

Technology infrastructure

Technology Platforms

Technology Stations

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Industry Clusters

Technology StationsTechnology infrastructure location

Sectors and infrastructure clusters

Biotechnology

Sectors

Industrial

Sectors

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He

alt

h

Ag

ricu

ltu

re

Ind

ust

ria

lB

iote

ch

En

erg

y

Min

ing

Ad

van

ced

M

an

ufa

ctu

rin

g

ICT

Electronics Design & Mnf (Incl. ICT)

Foundries Technology, Light metals & Tooling (4)

Innoveton/Down Stream Chemicals

Agro Food and Processing (2)

Chemistry & Cosmetics (2)

General Engineering, Composites and Reinforced Plastics (2)

Product Design & Development (2)

Database of Technology Infrastructure, Services and Expertswww.heda.co.za/satnsearchengine/formsa/

PRODUCTPRODUCTDEVELOPMENTDEVELOPMENT

TECHNOLOGY & TOOLINGTECHNOLOGY & TOOLINGDEVELOPMENTDEVELOPMENT

MANUFACTUREMANUFACTURE QUALITYQUALITYCONTROLCONTROL

‘Time’‘Time’ andand ‘cost ’‘cost ’ toto commerc ia l isecommerc ia l iseR E D U C E DR E D U C E D

Impact on TIA and Funded Projects

CONCEPTCONCEPT ANALYSISANALYSIS VERIFICATIONVERIFICATION DESIGNDESIGN ANALYSISANALYSIS NC PROGRAMNC PROGRAM MACHININGMACHINING MEASURINGMEASURING

‘Exceptional Skills ‘Exceptional Skills Development & SET Capacity Development & SET Capacity Building for a locally based Knowledge Building for a locally based Knowledge EconomyEconomy

andandExploitation Exploitation of inbound Technology’of inbound Technology’

The Free State station at CUTBed for bedridden patients to reduce bed sores

35

Car for the disabled

• The client is a disabled entrepreneur/ innovator who is supported by TIA/TSP in the design and development of a Car for the disabled

• The Technology Station at CUT in Bloemfontein conducted a Product Design and Technology Development with objective to reduce the current Design and Technology Development with objective to reduce the current cost of making disabled individuals mobile without assistance

• Graduates from university are exposed to design & fabrication technologies. The local manufacture of car will results in job creation/employments

No. graduates involved: 25

Automatic Pill Press Machine

• Scientific SUPER-KILL is a local enterprise in the pest control and scientific health care sector that was supported by CUT technology station to automate their products range manufacturing process for Rat poison pill

• The Technology Station offered: • The Technology Station offered: Applied Engineering, Design and Development and Engineering Project management.

• Benefits to enterprise: • improved unit cost of production• and increased volumes• To be competitive in pricing for

international markets

Platform OBJECTIVES

Bioprocessing Provides infrastructure to enterprises requiring downstream

production of various bioproducts

Institute of

Diagnostic

Research (IDR)

Develops components for cost-effective, rapid diagnostic kits

National A modern and high throughput sequencing facility

Platform activities (1)

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National

Genomics

Platform (NGP)

A modern and high throughput sequencing facility

Metagenomics Discovers and develops products and processes from South Africa’s

extreme biomes for industrial applications.

Metabolomics Employs metabolite analyses to develop solutions for the diagnosis of

infectious diseases and inherited disorders.

Bioinformatics Supports the data management and analysis for the ‘omics’ platforms

CPGR Provides genomics and proteomics research service for academic and

industry clients

Platform OBJECTIVES

Drug Delivery Systems Designs and develops intelligent systems to improve the delivery

and efficacy of new and existing drugs

Drug Discovery Establish the capability to develop and optimize new drug

candidates for clinical tests

Platform activities (2)

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Vaccine Delivery

System

Develop a system to improve safety and efficacy of animal

vaccines.

Protein Expression

System

Develop a yeast-based expression system to produce therapeutic

peptides

Biosafety Facilitates access to strategic information about biosafety risk

assessment in biotech development

Bioprospecting Identifies anti-HIV activity from plant extracts based on

indigenous knowledge in Limpopo

Business support

• Financial Management

• Contract Negotiation

• Marketing

• Business Plan Development

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• Business Plan Development

• Governance

• Networking

• Internationalisation

• IP Management

Innovation Skills Development

• Enabling education through accessible technology

• Fast tracking skills development through

technology innovation in a value based manner

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• Programmes aimed at addressing skills shortage in

manufacturing & other industrial processes.

INTERNAL DELIVERY MECHANISMS

Online

Application

Intelligent

Systems

Access

TIA delivery mechanisms

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43

Cross

Functional

Teams

Key

Skills

Strong

Regions

Collaborative

Approach

TIA Business Development (strong regions)

TIA National &

Investor

ClientProvincial Dev

Agencies

Municipalities

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TIA National &

RegionalFinance

Sectors

TSP

Platforms

etc

RegionalBDM’s

BDO’s

Municipalities

Private companies

SOEs

Others

Inventor ClientHEIs

Science Councils

Innovators

The capabilities that TIA will need in order to deliver on mandate

• Technology innovation expertise • Deal making / portfolio management• Leadership

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• Business development and support• Cross functional teamwork and collaboration • Expert services • Finance

THE MTEF ALLOCATION

MTEF Allocation (1)

Medium Term Expenditure Estimates

R’ thousand

Adjusted

Appropriation

2011/12

2012/2013 2013/2014 2014/2015

Operations 66 410 53 279 51 732 51 038

Human Resources 83 382 86 487 90 861 96 312

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Human Resources 83 382 86 487 90 861 96 312

Innovation Skills

Development8 014 9 104 9 564 10 118

Investments 259 319 295 118 313 930 336 647

Marketing and

Business

Development

12 353 6 656 7 348 7 707

Capital Expenditure 4 338 4 552 4 782 5 068

Total 433 816 455 196 478 217 506 910

MTEF Allocation (2)

12%

19%

1% 1%

As a percentage of allocation

Operations

Human Resources

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2%

65%

Skills Development for Innovation

Investments

Marketing and Business

Development

Capital Expenditure

Leveraged Funds

Number of co-funded projects in sectors Co-fundingAgriculture

2 Projects 4 557 090.005 100 000.00

Advanced Manufacturing2 Projects 11 000 000.00

2 688 076.00ICT

1 Project 500 000.00Health

2 Projects 20 000.005 008 200.00

Energy1 Project 93 000 000.00

TOTAL 121 873 366.00

THE NEW INITIATIVES

Youth Technology Innovation Fund

1. Criteria– South African Citizens of ages 18 – 30 years not already funded through the normal TIA

process.

2. Offerings– Voucher for use of SABS services for product certification up to R100 000.– Vouchers for Business Coaching services up to 160 hours .

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– Voucher for use of TIA’s technology platforms and stations up to R250 000 for rapidprototyping.

– Voucher for incubation services at a recognised TIA partner for up to 2 years.– Voucher for IP protection for no more than R150 000.– R60 000 per annum stipend for inventors for no more than 2 yrs and up to four people.

3. Administration

– To be administered by the GM: Special Projects.

TIA Index for Technology Innovation

1. Criteria•Higher Education Institutions•Individual Companies

2. Higher Education Institutions•Index measures how many technology innovation companies have been spun out.•Index measures how many technology innovation products and services have beenspun out

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spun out

3. Individual Companies•Index measures how many technology innovation companies have been spun out.•Index measures how many technology innovation products and services have beenspun out

4. Administration•To be administered by an Independent Panel set up by TIA with local andinternational experts.•The secretariat to be established within TIA and administered by Business PlanningManager in the CEO’s office

The Animal Health Bio -cluster Project in Tshwane

• Flagship project for catalysing economic development

through biotechnology

• Revitalise animal vaccine manufacturing in the region

• Accelerate the commercialisation of biotechnology

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• Accelerate the commercialisation of biotechnology

products and facilitate transfer to industry

• Diversify regional economy towards knowledge intensive

industries

• Leverage regional knowledge based in animal health

research and commercialisation

Tshwane Animal Health Bio -cluster

What is a bio -cluster?

Definition of a cluster:

“ Geographic concentration of different players such interconnected

companies, suppliers, institutions which compete and cooperate in

industry “

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Cluster development is complex and involves:

Government departments

Economic development agencies

Universities

Research centers

Companies

Financial institutions

Why is bio -clustering is important ?

• Firms tend to cluster around research centres, knowledge

intensive industry e.g. France Genopole, Cambridge Bio-

cluster (UK), Boston Route 128 bio clusters (USA), Turku

Biocluster (Finland)

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• Firms also need access to specialised facilities e.g. testing

labs, fermentation, cGMP& cGLP facilties etc.

• Clustering promotes innovation and networking

• Cluster approach promotes triple helix concept (industry -

academic –government co-operation)

Animal Health Industry

Prevention •Vaccines•Nutraceuticals •Probiotics •Medicinal feed additives

Animal Health

•Therapeutic Proteins•Biopharmaceuticals •Bioengineering •Medical devices •Tissue and cell engineering•Anti-infectives and parasiticides

Treatment Diagnosis

•Molecular Diagnostics•Monoclonal Antibodies

Why Tshwane Metropolitan Area?

• One of the leading animal health research environment in South Africa (UPTA, ARC, TUT and ACGT) –produces 80% of research publications in South Africa (from NACI Reports)

• Onderstepoort corridor tradition area of strength in animal health and biosciences -OBP, ARC-OVI, UPTA Veterinary Sciences

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• Presence of 15 local companies e.g. Avimune, Afrivert, Virbac, Onderstepoort Biological Products and multinationals in the province (Bayer, Merial, Pfizer, Novartis)

• Vaccine manufacturing infrastructure at OBP and ARC (FMD), animal testing facilities, Biosafety facility (level 3), OIE reference laboratory status

• It has been shown that trying to seed a cluster from scratch is generally not successful- Tshwane has some of the infrastructure and assets that are required

Concept of Tshwane Animal HealthCare Biocluster-Actors and linkages

Large (Pfizer, Bayer, Merial)

Local firms (OBP, Avimune,

Afrivet, etc)

Suppliers

(manufacturing, marketing

and distribution )

Knowledge Use

Intermediary Organisations

Provincial and Local •Gauteng Department of Agriculture •Gauteng Department of Economic Affairs

National Depts. •DST, DAFF,DTI

TIA

UPTA, Vet Dept.

ARC-OVI

ARC-API

ACGT

(scientific infrastructure,

research programmes, skills

and expertise)

Knowledge Generation

Organisations Economic Affairs •Tshwane Metro.•Local Economic Development Agencies

Industry Association•African Horse Sickness Trust •South African Animal Health Association•Meat Industry Association

TIA(Funding, commercialisation ,

facilitation & coordination )

… a system of innovation approach

What are the expected outcomes?

• Development and commercialisation of new

products for animal disease control

• Creation of viable start ups to commercialise new

products

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products

• Uptake of products by existing companies

• Address diseases that are unique to South Africa

and SADC region

• Create an world class cluster in animal health and

contribution to regional economic growth

What is TIA’s role ?

• Host/lead organisation for the cluster

development process

• Get industry participation and involvement

• Ensure that innovation supports and builds on

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• Ensure that innovation supports and builds on

existing strengths

• Leverage funds from stakeholders

• Facilitate collaboration and networking

THE ART NGUNI CATTLE PROJECTSCIENTIFIC OUTPUT COMING ALIVE

The ART Nguni Cattle project launch(1st February 2012)

64

Vuvha , Kefiloe and Bongi

65

The Electric Vehicle Platform

Why the Electric Vehicle Platform?

There are five (5) critical areas that offer ideal opportunities for technology development to support the EV industry:

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I. Charging infrastructure

II. Cars themselves

III. Battery management systems

IV. Battery technologies

V. Human capacity development

The EV value chain

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The TIA Role

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SA SYSTEMS INTERVENTION

Using TIA position in support of the technology innovation in the

ecosystems

• Easing access to IDC• Easing access to SABS

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• Easing access to SABS• Easing access to the MCC• Easing other relevant Institutions

The TIA Executive Structure

TIA Board

Chief Executive Officer

Group Executive :

Biotechnology Sectors

Group Executive :

Industrial Sectors

Group Executive :

Corporate AffairsGeneral Counsel

Chief Financial Officer Chief Operating Officer

TIA’s KPIs2012/13

Strategic objective 1

Performance Indicator Annual Target

1. To stimulate the development and demonstration o f technology based products, processes and services

1.1 Number of high impact investments 1

1.2 Number of technology based products/ processes developed through 25

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investments1.3 Number of technology based products/processes developed or

improved through Technology Stations450

1.4 Number of products/processes developed or improved through Technology Platforms

5

1.5 Number of new green technologies supported 1

Strategic objective 2

Performance Indicator Annual Target

2. To support the commercialisation of technology i nnovations2.1 Number of investments commercialised 10

2.2 Number of technology based companies established 2

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2.2 Number of technology based companies established 2

2.3 Percentage of co-investment attracted 10%

2.4 Percentage of investments attracting second round fundingfrom external sources

5%

Strategic objective 3

Performance Indicator Annual Target

3. To develop an enabling environment for technolog y innovation and commercialisation in South Africa

3.1 Number of new TIA regional offices established 1

3.2 Number of new industry clusters established 1

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3.2 Number of new industry clusters established 1

3.3 Number of new technology stations or new technologyplatforms established

1

Strategic objective 4 (1)

Performance Indicator Annual Target

4. To develop an enabling internal environment with in TIA to successfully execute its strategy

4.1 To put in place an IT architecturethat enables investment & portfolio management

Identified tool aligned with approved processes

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management

4.2 Efficient investment monitoring & evaluation system

Online system database for all approved applications with clear pipeline measures approved per project on the system

4.3 Compliance with all relevant legislation

Approved IT policies pertaining to IT Security, Operations and service continuity

Awareness campaigns TIA wide for adoption

Unqualified audit opinion

Strategic objective 4 (2)

Performance Indicator Annual Target4. To develop an enabling internal environment with in TIA to successfully

execute its strategy

4.4 Alignment of TIA’s critical positions with organisational design & relevant

Development of core skills through training

Staff turnover below the national benchmark

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design & relevant competencies , including retention of skills

Staff turnover below the national benchmark

Staff turnover of core skills below 10%

4.5 Development of a desired organisational culture

5% improvement on previous yearBased on culture survey results

Average performance management rating of 100%

Average leadership rating of 5 across all competencies

Strategic objective 5

Performance Indicator Annual Target

5. To facilitate the development of innovation skil ls to support technology innovation and commercialisation

5.1 Number of learners / educators on webinar 900/100

5.2 Number of candidates trained through mobile technology 50000

Number of interns trained through TSP programme/platforms

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5.3 Number of interns trained through TSP programme/platforms 130

5.4 Number of FET interns trained to develop industry skills 40

5.5 Number of NRF interns trained 26

5.6 Number of unemployed graduates trained 60

5.7 Number of candidates trained through CNC machining skills programme

200

5.8 Number of candidates trained in Design & Simulation 200

5.9 Number of candidates trained in Rapid Prototyping 200

Strategic objective 5 (continued)

Performance Indicator Annual Target

5. To facilitate the development of innovation skil ls to support technology innovation and commercialisation

5.10 Number of schools participating in Technology Innovation 25

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5.10 Number of schools participating in Technology Innovation Week

25

5.11 Number of schools adopted by Tech stations /platforms 13

5.12 Number of Business Plans resulting from exploitation of off-shelf IP

50

5.13 Number of solutions implemented from the Idea Development Programme

5

5.14 Number of candidates trained through Swiss Bio Entrepreneur / Innovation Management Programme

70

5.15 Number of Candidates trained through Chuma Management Development Programme

10

Strategic objective 6

Performance Indicator Annual Target

6. To become a schedule 3B entity in terms of the P ublic Finance Management Act

6.1 Amount of funds raised by TIA as a percentage of MTEF allocation

10% of current MTEF

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6.2 Number of Initial Public Offerings of TIA investments

0 this year

Thank You.....