/ 21 April 2017

Survey reveals state of R&D expenditure

The launch of the National Survey on Research and Experimental Development for 2014/15 and the National Survey of Intellectual Property and Technology Transfer at Publicly Funded
The launch of the National Survey on Research and Experimental Development for 2014/15 and the National Survey of Intellectual Property and Technology Transfer at Publicly Funded

South Africa has undertaken research and development surveys since the 1960s. The Centre for Science, Technology and Innovation Indicators (CeSTII) has undertaken this task since 2001 under the auspices of the department of science and technology. The survey generates key data on human resources and expenditure on research and development (R&D) that is then used to develop indicators.

The 2014/15 National Survey of Research and Experimental Development (R&D survey) shows an improving positive outlook for R&D investment in South Africa. Gross expenditure on research and development (GERD) increased by 8.1% in real terms from 2013/14 to 2014/15. This is the fourth consecutive year that GERD has increased in real terms, after the contraction in 2009/10.

At R23.3-billion in 2014/15, GERD in constant 2010 rand terms has almost reached the peak of R24.1-billion that was achieved in 2008/09. It is encouraging that the business sector, and particularly the manufacturing industry, has shown an acceleration in R&D expenditure, contributing the most to the reported increase in GERD.

The total R&D expenditure in South Africa amounted to R29.345-billion in 2014/15

This represents a nominal increase of 14.4% from the R25.6-billion recorded in 2013/14. At constant 2010 rand value, GERD amounted to R23.2-billion, which is a real increase of 8.1% from R21.5-billion in 2013/14.

GERD as a percentage of GDP increased from 0.73% to 0.77%

GERD as a percentage of gross domestic product (GDP) or R&D intensity was 0.77% in 2014/15, an increase from 0.73% in 2013/14. The calculations are based on the rebased and revised GDP series first published in November 2014 by Stats SA. The GDP data series was revised upwards, with the figures dating from 1993/94 onwards. GERD as a percentage of GDP remained at 0.73% for the years 2011/12 to 2013/14.

GERD increased for all sectors of the economy

The business sector was the largest performer of R&D in 2014/15, with expenditure amounting to 45.3% of GERD. The higher education sector accounted for the second-largest expenditure on R&D at 28.5% of GERD. This is an improvement in GERD, given that expenditure decreased by R40-million (0.5%) in the 2013/14 survey cycle. Expenditure on R&D by science councils accounted for 17.1% of GERD, followed by government at 6.5%, while the R&D expenditure recorded for not-for-profit organisations increased by 2.7%.

The government and business sectors continue to be the largest funding sources for R&D

Government funding of R&D increased by 17.0% from R11-billion in 2013/14 to R12.9-billion in 2014/15, representing 43.9% of total R&D funding. Of these, government institutions and higher education received 46.8% (R6.3-billion and R6-billion respectively) of the total government R&D funding.

The business sector was the second-largest funder of R&D, contributing 40.8% (R12-billion) towards total R&D funding. Business R&D expenditure financed by industry — that is own and other business funds — constituted 90.2% of the R12-million total. Higher education and science councils received most of the remaining funds: R885-million and R223-million respectively.

The third-largest source of funding for R&D in 2014/15 was from abroad, amounting to 12.2% (R3.6-billion), representing an increase of 7.6% from R3.3-billion in 2013/14.

R&D personnel headcounts and FTEs continued to grow

The higher education sector has the majority of R&D personnel. Researchers accounted for the largest proportion of R&D personnel in this sector, although the most consistent R&D personnel growth in the sector between 2009/10 and 2014/15 was found in headcounts and full-time equivalents (FTEs) of postgraduate students.

In the 2014/15 R&D survey, all sectors except government and science councils reported increases in R&D personnel FTEs. The highest numbers of FTEs were in higher education (17 944.4) and the business sector (12 927.5).

The 2014/15 survey recorded a 1.3% increase in FTEs for the total R&D personnel between 2013/14 and 2014/15, counter to the 8.3% recorded between 2012/13 and 2013/14.

South Africa follows global trends for recovering R&D spending

R&D trends around the globe indicate that there is renewed interest in investing in R&D after the 2008-2010 economic crisis.

Within Brics (Brazil, Russia, India, China and South Africa), China has shown the highest growth in R&D investments.

South Africa’s investment in R&D is growing in nominal terms and in 2014/15 the increase in GERD was greater than increases in the level of GDP.

Economies such as China, South Korea, Singapore, India and Brazil have expanded their proportions of global R&D expenditure, while South Africa’s proportion of global R&D spending has remained at 0.4% for the past decade.