Based on data from South Africa's research and development (R&D) surveys, the country's R&D expenditure has grown in real terms by 52% over the period 2001 to 2012. This growth has been driven by government funding, which rose from 34% of the total funding in 2003 to 45% by 2012. Much of the additional funding has been granted to universities, with government support of R&D in this sector rising 450% in nominal terms, or 250% in real terms, over the same period. This funding focus, indicative of a growing role for universities as R&D performers within the national system of innovation, follows a pattern set earlier in many developed countries and reflects a revision in the state's steering of knowledge creation. The R&D Survey also revealed a decline in the average cost of research, as expressed by expenditure per full-time equivalent researcher. This finding suggests that the researcher labour market is being better supplied and the constraints identified by earlier reviews are slowly being overcome. Both trends are highly positive for the research system. However, the 34% decline in business R&D expenditure since its peak in 2008 is a matter of concern and needs to be addressed. In particular, the level of state-industry embeddedness must be increased to encourage private investment and to overcome South Africa's present growth constraints in respect of developing competitive medium-to high-technology sectors.
IntroductionIn South Africa, the Centre for Science, Technology and Innovation Indicators has undertaken and published a research and development (R&D) survey annually since 2003; other agencies undertook similar surveys at mostly biennial intervals over the period 1983 to 2001, apart from 1995, when no data were published.1,2 Such surveys are rich in data that can inform policy and improve the overall performance of the R&D system. However, the link between survey data and policy appears to be made only sporadically, despite a number of recent reviews on science and technology policy. [3][4][5] We attempt to stimulate a more regular policy discussion based on the results of the survey, especially the role of public-funded R&D in supporting the national system of innovation. We concentrate on three issues, namely the source and beneficiaries of the growth in South Africa's expenditure on R&D, changes in the R&D labour market, and the decline in business R&D expenditure. The trends are discussed within the context of previous studies on the R&D role of the state, including the need for a more focused and transformative innovation policy 3,4,6 , constraints in R&D human resources [6][7][8][9] , and business R&D performance 10 . The extent to which and the manner in which the state involves itself in R&D are important questions that can have significant consequences on overall economic performance. Facing multiple options and instruments, the state must act in a focused yet balanced fashion to address the key challenges, without disfavouring any particular sector.