Incentives - Innovation and Technology

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• 1. Technology and Human Resources for Industry Programme (THRIP)

  The Technology and Human Resources for Industry Programme (THRIP) is a partnership programme which challenges companies to match government funding for innovative research and development in South Africa.

  Managed by the National Research Foundation (NRF) on behalf of the Department of Trade and Industry (the dti), THRIP gives local industry the means to obtain specific responses to its technology needs, by unleashing the potential of our students, researchers, and science and technology experts.

  THRIP’s objectives and priorities ensure that projects not only result in competitive, world-class technologies, but that they also support the growth and transformation of the rainbow nation.

  THRIP focuses on projects that specifically promote and facilitate scientific research, technology development and technology diffusion, or any combination of these.

  All projects funded by THRIP must include human resource development, but the choice of technological focus is left to the industrial participants and their partners.

  The industry and the dti share the costs – and therefore the risk – of developing commercial technology on a R2 to R1 basis (industry: the dti). the dti’s support may be doubled if a project supports certain THRIP priorities.

• 2. Support Programme for Industrial Innovation (SPII)

  Support Programme for Industrial Innovation (SPII). This is a dti innovation support programme that is administered by the Industrial Development Corporation (IDC). Regarding policy implications for the administration of SPII the following changes have been introduced since January 2005:

  1. Matching scheme (maximum grant R1,5 million)
  
  Only small and medium sized companies (SMEs: as determined by the Small Business Act) can qualify in terms of the Matching Scheme, which makes provision for a 50% grant with no payback, for innovative development of new products and processes.
  
  2. Partnership Scheme (PII) (grants larger than R1,5 million)
  
  This Scheme is open to all companies, which make provision for a 50% grant, and a payback mechanism based on sales from the new product or process. A nominal internal rate of return (IRR) of 19% to the Partnership Scheme is aimed at. The reason for this is to lessen the strain on the fiscus regarding the annual requirement for funds in the budget. In considering support for a project(s), under PII, there should be a clear indication of the causality (additionality) that will follow from the support. In other words support should not be given to projects that would have happened anyway without support.
  
  3. Product process development scheme

  In January 2005 the dti introduced the Product Process Development Scheme (PPD). This scheme is only for small enterprises as per the definition for the manufacturing sector in the Natinal Small Business Ammendment Act, 2003.

  Financial assistance under the PPD scheme is in the form of a taxable non-repayable grant between 65% and 85% of the total qualifying costs incurred in pre-competitive development activity associated with specific development project up to a maximum grant amount of R500 000 per project.

• 3. National Technology Transfer Centre (NTTC)

  The National Technology Transfer Centre (NTTC) is an initiative by the dti to facilitate technology transfer and diffusion to SMMEs with a specific focus on the Second Economy.

  Vision
  To be a Centre of Technology Transfer Excellence for the SA industry, primarily focusing on SMMEs, contributing to growth, equity and employment.

  Mission of the NTTC
  The NTTC promotes and facilitates the transfer of technology, which is appropriate, effective and competitive through the provision of:

  1. Specialist services and advice through its networks to industry and;
  2. Bridging finance on favourable terms to SMMEs.

  The NTTC assists businesses in acquiring appropriate technologies through national and international networks and to assist in negotiating technology transfer agreements.

  NTTC Services:
  •  Technology assessment;
  •  Technology sourcing and evaluation;
  •  Technology selection;
  •  Negotiating and drafting of agreements;
  •  Technology transfer education;
  •  Technology transfer;
  •  Project management.

• 4. GODISA

  The GODISA Trust is partnered by the Department of Science and Technology and the Department of Trade and Industry.

  Deriving its name from the Setswana word meaning ‘nurturing or helping to grow’, GODISA as such incubates and nurtures small, medium and micro-sized enterprises to play an increasingly vital role in the development of sustainable employment and the advancement of essential skills and technologies.

  The GODISA Trusts is helping South Africans to cultivate their innovations and business ideas, and in the process uplifting and empowering individuals and their communities.

  The objectives of GODISA are:

  • The establishment of technology business centers such as incubators, innovation centers, demonstration centers or hybrid centers with the aim of accelerating the development of technology driven enterprises;
  • Provide funding to qualifying technology centers;
  • The enhancement of entrepreneurial and innovative thinking through effective and efficient center processes;
  • Provide sector focused SMME clusters with access to up-to-date technology and management support;
  • Improve the business performance, profitability and survival rate of newly established technology based SMMEs;
  • Promote competitiveness and the assimilation of best practice production technologies;
  • Promote economic growth and employment creation through the enhancement of technological innovation;
  • Continual improvement of the GODISA Trust by benchmarking and research;
  • Promote technology transfer/diffusion within the SMME sector of the local economy;
  • Provide sector focused SMME clusters with access to up-to-date technology and management support;
  • The facilitation of the transfer of effective and efficient technologies, business skills and expertise through various centers.

• 5. The Down Stream Aluminium Centre for Technology (DACT)

  The Down Stream Aluminium Centre for Technology (DACT) is a dti-funded project. DACT is set to gain stature in the casting industry for sound financial, social and environmental management. Providing a sound training and incubating facility and establishing successful small businesses to benefit the community in which it operates.

  DACT offers a number of services to incubatees and businesses in the area. The incubator boasts exceptional technical expertise and state of the art equipment which clients are able to utilize.

  The objectives of DACT are:

  • DACT endeavours to provide services and infrastructure so that trainees can effectively be exposed to all the aspects of aluminium casting operations and associated management and business activities in training them to successfully establish business ventures as entrepreneurs;
  • DACT provides mentorship and managerial and technical assistance to incubated and other aluminium casting businesses in the area to ensure their success.

• 6. Furntech

  The Government, through its National Skills Development Strategy (NSDS), identified training and skills development as significant drivers of international competitiveness and organisational development. In response to these requirements, the Department of Trade and Industry (the dti) funded the establishment and operationalisation of FURNTECH as a world-class service provider to South Africa’s wood products and furniture industries in the fields of incubation, training, technology transfer and technology demonstration.

  The objectives of FURNTECH are:

  • Globally competitive furniture production through
    • skills development;
    • technology demonstration;
    • technology transfer.

   

  • Creation of jobs through
    •  business technology incubation;
    • upskilling and placement of unemployed individuals.

   

  • Creation of centres of excellence.

• 7. National Fibre, Textile and Clothing Centre (NFTCC)

  As a technology partner to industry, the National Fibre, Textile and Clothing Centre (NFTCC) of CSIR Manufacturing and Materials Technology, promotes the growth and global competitiveness of the South African textile pipeline. Through awareness of relevant technological developments globally and the acquisition or development of technologies, the centre aims to be the best provider of knowledge and innovative solutions to the textile pipeline in Southern Africa.

  As its focus, the centre assists the textile and clothing industry to beneficiate local raw materials and achieves considerable growth across the textile pipeline. Through various cluster-related and other initiatives for wool, mohair, indigenous plant fibres, local industries are established. The centre is an initiative of the CSIR and the dti, funded by the dti trough its technology funding. The centre's active leadership role in this context is underpinned by its strong scientific and technological expertise.

  The centre is also developing knowledge-rich technologies and solutions for the textile pipeline through electronic databases and knowledge-based software (expert) systems, covering the processing of local natural fibres as well as technology demonstration for the local textile industries.

  The NFTCC provides the following:

  • Introduce new fibre manufacturing technology to industry by means of technology;
  • Establish links and agreements with overseas fibre based centres of excellence to incorporate fibre technologies and the transfer of know-how and skills;
  • Offer entrepreneurial training and guidance and provide advice to the industry;
  • Assists the industry in upgrading their technology to increase productivity and exports, and become globally competitive;
  • Demonstrates fibre technologies so as to assist the industry in acquiring more efficient technologies and machines;
  • Assists in the incubation of fibre technologies by providing facilities, advice, equipment and mentoring so as to increase the number of start-up SMMEs;
  • Develop value-chain strategies linked to integrated manufacturing platform;
  • Develop high-quality value-added products, exploiting the whole spectrum of fibre beneficiation and to exploit the market.

• 8. Venture capital

  The Venture Capital fund is an initiative that would primarily focus at financing the first two stages of development of new technology-based firms: that is the seed stage (which involves concept development, prototyping, and product development) and early stage (marketing, production of goods and/or services), with some investment in later stages. Venture Capital is considered to be funds invested in a venture at high risk to the investor, usually in situations where the venture is unable to secure the required funds from traditional lending sources, such as commercial loans from a bank, or the public equity market.

  Commercialization of new technologies that emerge from government funded R&D programmes, science councils, the academic research institutions, technology business incubators and private sector research facilities are the primary candidates for support by the Fund.

  The dti is co-investing in the South African Intellectual Property (SAIP) Fund to roll out this programme. Other investors in the SAIP Fund include, Sanlam Investment Management, the CSIR, University of Pretoria, Industrial Development Corporation (IDC) and Triumph Venture Capital as the Fund Manager.

• 9. Technology linkages

  The objective of the programme is to facilitate the establishment of industrial sector needs and offer support as required by the dti sectors. The Unit (Innovation & Technology), together with Trade and Investment South Africa (TISA), interacts with industry on integrated manufacturing strategies and technology issues such as:

  • Industrial Sector Strategy;
  • Technology Strategy following sector processes;
  • Technology Profiles;
  • Potential areas for Innovation;
  • Potential support from Technology Programmes;
  • Technology Balance of Trade.

  The programme manager interacts with role players within and outside the dti with regard to industrial sector development and technology strategies for sectors, where areas of support in that regard are being determined.

  The programme is aimed at keeping industry well-informed about global technology development trends, where studies in that regard are conducted to determine those key technologies that would influence the competitiveness, sustainability and future development of South African industries. A technology strategy to react to such technologies that pose a threat or opportunity to South African industry should be established based on the results of the study and the ongoing global development trends. This includes research on the dependency of South African industries on foreign technology.

  Within the programme is the Technology Advisory Centre (TAC), which has just been established to cater for advisory services to the SMMEs who would like to participate in the dti Innovation and Technology programmes, and also information on other technology service providers outside the dti, be it government or private sector. Advice will also be provided based on current technology development trends. Feedback should be provided to programme managers with the aim of improving current programmes or establishing new ones that will cater for the development of the second economy.

• 10. Innovation and technology

  Vision

  To provide technology leadership in supporting sustainable Growth, Equity and Employment.

  Mission

  To enhance industrial development and competitiveness through technology support measures to improve the lives of all South Africans.

  Objectives
  •  Enhance Technology Leadership;
  •  Develop Technology Policy and Strategy;
  •  Contribute to building technology platforms;
  •  Support innovation in industry;
  •  Facilitate technology transfer and diffusion;
  •  Support technology-based SMME’s;
  •  Promote BEE and gender equity;
  •  Address the technology needs of the 2nd economy;
  •  Support the development of skills for science, engineering and technology.

  Programmes
  •  Technology And Human Resources For Industry Programme (THRIP);
  •  Support Programme For Industrial Innovation (SPII);
  •  National Technology Transfer Centre (NTTC);
  •  Godisa;
  •  Mpumalanga Stainless Initiative (MSI);
  •  The Down Stream Aluminium Centre For Technology (DACT);
  •  Furntech;
  •  National Fibre, Textile And Clothing Centre (NFTCC);
  •  Venture Capital;
   • Technology Linkages.

• 11. SEDA Technology Programme (stp)

  As part of the government’s national strategy of consolidating small enterprise support interventions across different government departments and government agencies, the dti has commenced its own process of streamlining its small enterprises support interventions. As part of this process, the dti and the Department of Science and Technology (DST) agreed to merge the Godisa trust with the National Transfer Centre (NTTC) and the Technology Advisory Centre (TAC). The three dti incubators, namely Mpumalanga Stainless Steel Initiative (MSI), Downstream Aluminium Centre for Technology (DACT) and Furntech, were also incorporated into stp.

  stp was created to provide technology and business development support services to small enterprises as an integral part of its mandate to drive the national technology and business incubation agenda. stp contributes to South Africa's economic development through the creation and support of technology business centers, including incubators and technology demonstration centres. These centres provide a variety of business support services and office infrastructure to small enterprises. stp also provides a range of services that enable industry and in particular small enterprises in the second economy to access and transfer technology. There are two main areas in which stp provides support:

  1. Technology Transfer Division
  The Technology Transfer Division (TTD) is a division within stp that manages the Technology Transfer Fund (TTF). Its aim is to facilitate technology transfer and diffusion to SMMEs with a specific focus on the second economy. The TTD assists businesses in acquiring appropriate technologies through national and international networks and negotiating technology transfer agreements. The programme offers these services:

  •  Technology assessment;
  • Technology sourcing and evaluation;
  • Technology selection;
  • Negotiating and drafting of agreements;
  • Technology transfer education;
  • Technology transfer;
  • Project management;
  • Technology Advisory centre.

  TTD provides finance through the Technology Transfer Fund (TTF). The main purpose of the TTF is to specifically fund defined components of the process of transferring available technology to entrepreneurs, communities and existing South African businesses, focusing on the second economy.

  The TTF will provide funding to enable technology transfer for the second economy as a grant with no payback up to a maximum of R500 000 per project.

  2. Technology Business Incubation

  Incubation aims to help grow small, medium and micro-sized enterprises in the country. It is designed to strengthen technology diffusion and harness the entrepreneurship of the science and technology community in South Africa. Incubation provides support to South African enterprise. This support directly helps inventors and new enterprises to use technology optimally in improving the competitiveness of their products and services. Furthermore, it improves business infrastructure, strategic guidance, financial and legal advice, and creates an environment of learning and sharing in which information, experience and ideas are freely exchanged. Incubation also assists enterprises to develop skills, knowledge and markets. These improvements are intended to lead to increased profitability and growth. Enterprises will be able to employ more people and enter new markets with cutting-edge products and services. Currently the Seda Technology Programme (stp) provides financial, strategic, technological and management support to the following incubators:

  • Mpumalanga Stainless Initiative (MSI);
  • The Down Stream Aluminium Centre for Technology (DACT);
  • Furniture Technology Centre (FURNTECH);
  • Acorn Technologies;
  • Chemin;
  • EGoli Bio Life Sciences;
  • Embizeni Innovation Support Centre;
  • Softstart - Bodibeng Technology (SoftStartBTI);
  • Timbali Technology;
  • Zenzele Technology;
  • Essential Oils Incubation Centre;
  • Ekurhuleni Base Metal Incubator;
  • Platinum Incubator;
  • Bio-diesel Incubator;
  • AIDC.

• 12. Science-industry relations and the SA innovation chasm

  The dti undertook a study to investigate the existence of the innovation chasm in general and the transfer of technologies, supported by public funds, abroad in particular.