Budget cuts hold back transformation and hurt innovation

Published On: 15 June 2021|

The key takeaway from the last global financial crisis was that countries with weak innovation systems suffered more from the downturn in economic activity, after the crisis. So said the founding Chief Director of the Institute for Economic Research on Innovation at the Tshwane University of Technology, Professor Rasigan Maharajh.


Professor Rasigan Maharajh is also Professor Extraordinary at the Centre for Research on Evaluation, Science and Technology (CREST) at Stellenbosch University and a Node Head of DSI-NRF’s Centre of Excellence in Scientometrics and Science, Technology and Innovation Policy.


He was speaking at the 6th biennial Research and Innovation Dialogue that was hosted by Universities South Africa’s Research and Innovation Strategy Group last Friday. The virtual conference, attended by academics, researchers and policy makers, was themed Research and Innovation in the Post-CoVID Period.


Addressing the conference on CoVID-19: Lessons for the National System of Innovation, Professor Maharajh said the 2008 crisis showed that where budget reductions had been made in Research and Development (R&D), the innovation systems that followed were unable to accommodate the cuts.


“In other words, those cuts cut much deeper than just a percentage change,” he said.


He added that any future dialogues need to include the creation of a national system of innovation “that helps us generate resilient and knowledge-based economies.”


Outlining three points necessary to move the agenda forward, he said: “Firstly, we need to widen and expand public engagements in science technology and innovation.” It was critical to redress the proliferation of alternative facts, something he called a “serious challenge”. “We have to rebuild trust in science,” he said.


The second point he put forward concerned transformation. “We need to accelerate the consolidation of SA’s National System of Innovation by fast tracking transformation and resisting austerity.  “It’s been 27 years since democracy! How can we fast track transformation while embracing austerity? This is a contradiction.” Collaboration, said Professor Maharajh, is critical to Advancing Continental Integration and deepening global co-operation in science and technology.


Thirdly, he stated that “enhancing collaboration improves not only our own capabilities but maximises the possibility of skills and knowledge transference. We need to reduce the silo effect; competing in a small system has negative impacts on us achieving our collective goals.” He added that a robust innovation system needs incentives to retain people in scarce science and technology jobs.


Lessons derived from CoVID


Regarding CoVID-19, Professor Majarajh said the current lesson is that we have a lot more to learn, adding that he hoped our capabilities and capacity for learning are enhanced by the experience that we are undergoing. Anthropocentricity (an inclination to evaluate reality exclusively in terms of human values) has largely been utilised to bring humans to this point. He said the evidence of this and how it infects us is important.


“I would hazard a guess that we’re not staring at the collapse of the planet, but rather the demise of ourselves as a species.” Citing the US government, which had spent $18-billion on Operation Warp Speed, its vaccine research programme, he said: “That is R244-billion. Proportionally, in 2018 our gross expenditure on Research and Development in South Africa totalled R36-billion. There is a six times difference between what the US was able to marshal and mobilise for a specific purpose on vaccines, versus our entire spend on R&D.”


The significance of inequality is not new, but it has been accelerated and intensified during the pandemic. In this context, he said, climate change, and the challenges of biodiversity loss reveals mans interdependence with all living entities and the environment, and shows how we, as a species, have determined our future.


“The pandemic has also revealed possibilities for change. Significant socio-economic events like The Great Depression and World War II, had an impact on productive capability, capacity and the generation of emissions. 2020 saw a sharp reduction in the gigaton emissions.


“Covid-19 shows us that we can change; but DO we have the capability and capacity to listen and learn from what is taking place around us? This is troubling when we think that we’re 27 years into our new democracy yet still refer to historically disadvantaged institutions.  We even use that language when we talk of a second decadal plan for the national system of innovation. We are not addressing challenges we’ve accumulated from our past and these legacy issues will continue to trouble us.”


He said he hoped that “we are not shocked or surprised by what is coming, but that we use the instruments of science and technology to have a better sense of what to expect and to prepare ourselves for alternative futures.” Professor Maharajh said it is important to draw on the variety of inputs generating innovation: science, technology, and an investment in R&D are a component of that.  


A staggering $4,1-trillion is needed to halt our climate biodiversity and land degradation crisis by 2050. Yet, while countries around the world are increasing their budget on R&D, South Africa significantly underperforms.  “This challenge will bedevil us as we move forward especially with a whole range of climate related crises that lie ahead.”


With respect to health R&D, South Africa has achieved 0.83% of Global Expenditure on Research and Development (GERD). Within that 0,83%, only 22% is spent on health. An already weak health system made worse by the pandemic – requires more, not less, expenditure, he said, adding that our segmented public / private health systems do not operate in concert with each other.


The erosion of the public sector might lead to an increase in profitability for the private sector but does not necessarily translate into investments for the schemes themselves, he said. “Even though we are fixated, and correctly so, on CoVID, our circumstances are not changing at the rate and pace needed. There is an almost stagnant effect of our Gross Domestic Expenditure on Research and Development (GERD) as a percentage of GDP.”


He addressed his colleagues: “Most importantly is the decline in recent years, in expenditure. Looking year-on-year, on a long-term basis, at shrinking expenditure by around 9% a year, makes South Africa’s position precarious.  Everything is premised on us having highly capable and competent people working in our systems.” These austerity measures, declines and reductions in public expenditure further compound the situation.


Professor Maharajh quoted Stats SA’s official unemployment figure: 32.6%, or a third of the population. Graduate unemployment in South Africa is 9,3%. Unemployment for ages 16-24 is 63,3%, for 25-34 is 41,3%. “That shows how we are curbing the possibility of young people being drawn into the economy and contributing ideas towards redressing problems,” he summed it all up.


Professor Maharajh was one of six experts lined up to speak on the broad Dialogue sub-theme: the Impact of CoVID-19 on Research and Post-Graduate Studies. Six other experts were lined up to address the second sub-theme: Ethical Research and Integrity.


Every two years, the RISG R&I Dialogue assembles delegates from the university sector, science councils, civil society and government to deliberate on the most pertinent issues of concern to the sector within the context of research and innovation.  At its peak last Friday, 140 delegates were virtually linked to the 2021 Dialogue. The biennial event is much credited for robust discussions and future thinking.


Charmain Naidoo is a writer contracted by Universities South Africa.