An external view into the Technology Innovation Agency (TIA) – which government hoped would be a silver bullet to fix South Africa's innovation problems – speaks of confusion about its purpose, "toxic relationships" with its line department and jockeying for influence within the state agency as reasons for it "not meeting the expectations of stakeholders".
TIA was established in 2008, through the TIA Act, with the aim of bridging the innovation chasm between innovation and marketable product. It was an amalgamation between seven entities, namely the Innovation Fund, the Tshumisano Trust, the implementation unit of the Advanced Manufacturing Technology Strategy and biotechnology regional innovation centres Cape Biotech, BioPAD, LIFElab and PlantBio.
The TIA Act states that the agency must "support the state in stimulating and intensifying technological innovation in order to improve economic growth and the quality of life of all South Africans by developing and exploiting technological". In the department's business case for establishing the entity, it said that TIA's ultimate goal was to "use South Africa's science and technology base to develop new industries, create sustainable jobs and help diversify the economy away from commodity exports towards knowledge-based industries equipped to address modern global challenges".
But the path of TIA, which has been allocated R482-million in this financial year, has been dogged with problems – which are explicitly laid out in the review. Three main problems run through the review: one, that there is confusion on both the part of the department of science and technology and TIA about the agency's mandate; two, the merging of seven entities set TIA on a difficult road from its inception, with historic financial mismanagement and power-battles; and three, a breakdown in the relationship between the department and TIA, which the report describes as "toxic".
When the Mail & Guardian previously spoke to both parties, TIA chief executive Simphiwe Duma said that the agency had to make a return on investment to be financially sustainable, while Science and Technology Minister Derek Hanekom said earlier this year that making money was not the agency's "core mandate". "If they bring in some [money], that's not a bad thing because it adds to the budget."
The question of whether the agency makes money is integral to its functioning because it dictates the kinds of projects that the agency funds. The report reflects this difference in focus: "TIA seemed to display a strong affinity for a return-on-investment model, seeking returns on the TIA balance sheet rather than in respect of social and economic development in the national interest.
"This emphasis on short-term return might be driving TIA's investment in late-stage projects, which should rather come from venture capital and private equity."
No easy road
But even before it got its chief executive and began functioning in 2010, the agency was in for a rough ride. The merging of seven entities brought financial woes as they had not previously been governed in terms of the Public Finance Management Act or been held to it, which meant that TIA inherited these financial hangovers and transgressions, resulting in a qualified audit report for the 2010/11 financial year.
But there were greater problems than money. Each entity had its own culture and way of doing things, and all of their heads were included on the first TIA board to facilitate a smooth transition, but appeared to have the opposite effect as "the staff of the various [biotechnology regional innovation centres] believed 'their' respective former chairs could be lobbied to 'fight their battles' on the TIA board", the report notes. Also, there were "serious tensions among the senior managers of the entities merged into the TIA as they allegedly jockeyed for positions of influence in the new agency".
At the same time, there was a turnover of department staff who were involved in this process. The report notes the view among some stakeholders that "TIA was 'doomed to fail' from its very inception" because of a lack of leadership from the department and that now there is a "clear disjuncture between the views of the [department] and the TIA".
Then there's the question of who to fund. The report notes that regional heads of technology stations, which are based at universities, feel marginalised; the public and private stakeholders felt a "distinct lack of confidence" in the agency. Adding to the expectations, the report says that the department expected TIA to facilitate turning publically-funded research in universities and science councils in marketable products, while the reality is that the industry is the major performer of research and development in the country.
The report makes 12 recommendations that, it believes, will help guide the agency which is trapped in the invidious position of trying to be everything to everyone and inevitably disappointing. They range from urgent bilateral meetings between the department and the TIA, to operational issues. The main over-arching theme seems to be one of communication, with TIA's current situation being largely the result of both the agency and the department talking past each other. It is now a matter of seeing when and how they will be implemented.