the role of science in the industrialization of the … presentations/the...private sector must be...

The role of innovation in the industrialization

of the SADC region

Dr Thulani Dlamini

VP: Strategic R&T

Sasol

Maintaining momentum 2

Copyright ©, 2016, SasolConfidential

Historical Perspective on Industrialization

• Increase in local demand for goods and

services

• Changes in income levels, quality of life

and education etc.

• Availability of skilled labor

• Creation of new trade networks

• Availability of relevant resources including

capital

• Culture of innovation and entrepreneurship

86 99 47

Key Drivers



2015 SADC produced a report “SADC industrialization strategy and roadmap – 2015 -

2063”

● Regional integration as a driver for industrialization and economic growth

● Competitiveness at industrial, country and region level,

● Economic and technological transformation

● Accumulation and dissemination of knowledge,

● Development modern infrastructure and human capital

Strategy viewed as a modernization strategy of the region

Science and technology are important enablers of the strategy

Higher levels of growth and deeper structural transformation required, due to poor

initial development conditions

SADC vision for Industrialization



SADC GDP at $580 bn, with a growth of 5.14% (2011)

GDP per capita of the region at $2157, compared to India and Brazil at $1719 and $8587

respectively.

Services accounts for 51% of GDP, Industry at 32% and Agriculture at 17%

Except for South Africa and Mauritius economies of most SADC countries are factor

driven and depend on quality of: (WEF, GCI 2012 – 2013)

● Institutions

● Infrastructure

● Macro economic environment

● Health and primary education

Shift to efficiency driven and later innovation driven economies necessary for global

competitiveness.

Global Competitiveness of SADC countries



Average human development index for the region is 0.5 indicative of

● Low Life expectancy

● Low years of schooling

● Low income levels

57.4 % of the population lives on ≤ $1.25/d (2009)

● Anyone living on ≤ $ 2 / d considered poor

Gini co-efficient for most SADC countries above 0.5

Exports dominated by resources – coal, ferrous metals, copper, manganese, platinum,

gold, diamonds etc.

Intra SADC trade only 10% of total exports from the region, although SADC population

over 270m.

75% of workers in ‘vulnerable employment’ – poor working conditions, low productivity

and inadequate earnings

SADC Industrialization an imperative

SADC industrialization needs to move from academic discussion to real implementation



Low productivity levels

● Declaration of productivity in 1999.

Scarcity of skills – especially advanced

skills

Availability and cost of capital

Access to state of the art technologies

Barriers to industrialization

Infrastructure deficit

● Regional Infrastructure Development Master Plan

(RIDMP)

High cost of doing business

Energy deficit

Water scarcity



South Korean example:

● Build capability – mainly human capacity development at all levels and infrastructure

● Accelerated introduction of foreign technologies; local development and export

● Implement legislation that supports science and technology

Introduce and implement policies and strategies that support

industrialization

● Provide a secure foundation for scientific and technological growth

● Prioritize the development of industrial technology

● Create a favorable climate for science and technology through legislation

Industrialization: Role of government



Using foreign technology to drive innovation: Sasol

<1937

Anglovaal acquires

rights to use FT in

SA

1950

Sasol Incorporated

as a state owned

entity

1955

First product

produced using fully

imported technology

1979

Sasol is privatized

and listed in the JSE

1980s

Sasol 2 and 3 based

on locally developed

technologies

1990s

Launch of local and

international

chemicals business

from FT

2001

International

acquisition to grow

chemicals business

2003

Listing in the NSE

2004

Gas from

Mozambique

2007

1st GTL plant in

Qatar

2014

2nd GTL plant in

Nigeria



Develop strong policy foundations that will address public perception and

interest in SET

Develop strong institutional organizations as well as research & development

systems to attract and retain the right talent for SET and drive for excellence

Address the limited scientific manpower with skewed distribution – limits

possibility for multidisciplinary R&T

Move beyond heavy reliance on imported technologies – limited ability for

localization

Deal with lack of research equipment and information resources

Develop the ability to fully /properly assess economic impact of R&D leading to

an optimal innovation portfolio

Improve co-operation between “producers” and “consumers” of technology.

Challenges to be addressed by state interventions vis a

vis SET & Industrialization:



Increased spending in education at all levels – what are current spending levels

for SADC

Refocus education systems to create a balance between technical and

vocational training

Tertiary education to produce the correct number and quality graduates in

STEM education

Closer working relationship between HEIs and industry to produce graduates

that are relevant to the economy

Create regional quality standards to facilitate movement / application of human

capital in the region

Human Capital Development : A key enabler



Domestic demand increase

Agriculture economy

Natural resource utilization

Possible Growth Pillars for the SADC economy

Export maximization

Service industry development

Domestic, regional and global value chain participation



Create symbiotic relationships between feeder and leader industries

Introduce technology that is appropriate for the level of development

Diversify and broaden the industrial base

Address the industrial and technological gap, through targeted catch up mechanisms

Develop viable regional value chains to access global markets

Focus on youth and women

Shift from factor accumulation growth – employing more labour and capital to total factor

productivity – efficiency of deployed resources

Opportunities to create a comparative advantage for the

region



Private sector must be involved in the development and implementation of

industrialization strategies

Create platforms for regional dialogues between state, private sector and

society on industrialization

State policies to be informed by private sector requirements in order to

improve alignment and ease of doing business in the region and globally

SADC states to provide mechanisms and incentives for the training and

development of entrepreneurs and SMMEs

Public / Private Sector Engagement – the missing Link!



The development of human capital at all levels is an absolute necessity for any

industrialization endeavor.

Investment in infrastructure and state of the art technologies, relevant to the regions level

of development, must be prioritized.

A conducive SET policy environment must be created to support scientific excellence,

innovation and entrepreneurship.

Significant improvements in factor efficiency and regional integration are required to

achieve global competitiveness

A two pronged balanced approach must be considered for industrialization based on:

● Maximum value addition of local resources

● Importing foreign technologies to drive diversification, import substitution and export expansion

Conclusions

the role of science in the industrialization of the … presentations/the...private sector must be...

Documents