1. JOHANNES POTGIETER 13 JUNE 2007
PRESENTATION TO THE PORTFOLIO COMMITTEE ON TRADE AND INDUSTRY ON THE THRIP AND SPII TECHNOLOGY PROGRAMMES
JOHANNES POTGIETER
13 JUNE 2007

2. CONTENTS OF PRESENTATION
Description
Statistics
Impact
Reviews
Specific projects

3. DESCRIPTION: SUPPORT PROGRAMME FOR INDUSTRIAL INNOVATION (SPII)
Promote development of technologically innovative products/processes that are commercially viable & internationally competitive
Administered by the Industrial Development Corporation (IDC)

4. SPII SCHEMES
Matching Scheme
Partnership Scheme
Product Process Development Scheme

5. Matching Scheme
Provides a grant of 50-75% of the actual direct cost incurred during development
50% of qualifying costs <25% BEE
65% of qualifying costs > 25% BEE or > 50 % Women ownership
75% of qualifying costs >50% BEE ownership
Payments are made against predetermined milestones
Maximum grant amounts to R1.5 million per project
Only SMME’s may participate

6. Partnership Scheme For larger scale R&D projects
Grant of 50% on the actual direct cost incurred in development activity
Incorporates a conditional repayment mechanism in the form of a levy on sales
Must demonstrate additionality/causality

7. Product Process Development Scheme (PPD)
New for Small Enterprises
Promote development of new products and/or processes
Non-repayable grant of 50-85% on qualifying costs incurred in development activity
<25% black ownership (50% grant)
25-50% black ownership (75% grant)
>50%Women ownership (75% grant)
>50% black ownership (85% grant)
with 2% paid upfront
Maximum of R per project

8. CATEGORIES SUPPORTED COSTS ON: Direct labour Direct material
Direct Subcontracting
Pro-rata portion of capital
Patents

9. SPII STATISTICS Budget: dti funds R46,9m (2007/8)
Admin costs: 8% (2004/5)
11% (2005/6)
Output for 2006/7:
Approvals: R 81,1m
85 projects (>80% SMME’s)
34% BEE
18% women-owned enterprises
Industrial sectors: 2005/6
ICT 49%
Chemicals 10%
Miscellaneous manufacturing 14%
Electrical machinery 13%
Mechanical and motor 6%

10. SPII STATISTICS GEOGRAPHIC LOCATION AREA % BARKLY WEST 1 BOLAND 7
NORTH WEST
DURBAN REGION 6
EAST LONDON
MPUMALANGA
GAUTENG 45
NORTH EASTERN FREE STATE
NORTHERN GAUTENG / PRETORIA 16
W CAPE – PENINSULA 19
PE – UITENHAGE 5
PIETERMARITZBURG

11. SPII IMPACT Measure 2005/6 2004/5 2003/4 Local sales R139m R165m R278m
Export sales
R173m
R636m
R86m
Total sales
R312m
R802m
R364m
Taxes (estim)
R27m
R102m
R51m
Shop floor jobs
2262
3145
2300
R&D (%of sales)
16,8
13,4
23,4

13. SPII: REVIEWS 2006 External review
Turnovers and taxes (over-compensate for support)
Additionality (54% not in SA without SPII)
High overhead cost
Some recommendations
Substantial contribution to SMME’s and innovation – should be maintained
Need for a single body to oversee programmes
Support technology platforms – more than one firm
Focus on high risk
Improve accessibility and response time

14. SPII: REVIEWS (cont) 2006 World Bank report
SPII one of best performers

15. SPII: Specific projects
CELL POWER:
Expertron Group(Pty) Ltd (Small company)
Municipalities use people from community to sell prepaid services
Business opportunities in community
Small vendor
Tshwane municipality in 2005 to business created
Combined turnover nearly R3m a month

16. SPII: Specific projects
Blackstone Tech (Pty) Ltd (Small company)
Light and strong wheels
No joins or bonds
Carbon fibre –50% lighter than standard and 30% lighter than “Mags”
Motor bikes for racing

17. THRIP: DESCRIPTION
Administered by the NRF and guided by an Advisory Board with representatives from industry, government, HEIs, labour and science councils.
Cost-sharing basis with industry, & supports SET research collaboration focusing on technology needs of participating firms.

18. MISSION OF THRIP
To improve the competitiveness of SA’s industry by supporting research and technology development activities and,
Enhancing the quality and quantity of appropriately skilled people.

19. THRIP PRIORITIES
To support an increase in the number of black and female students pursuing technological and engineering careers,
To promote technological know-how within the SMME sector, through the deployment of skills vested in HEIs and SETIs,
To facilitate and support multi-firm projects in which firms (Incl. BEE enterprises) collaborate/ share in project outcomes
Support for BEE and Black-owned Enterprises

20. RATIOS FOR THRIP FUNDING TO PROMOTE SMME AND BEE PARTICIPATION
INDUSTRY PARTNER (SIZE)
THRIP CONTRIB. (R)
LARGE ENTERPRISE CONTRIB.
(R)
SMALL & MEDIUM ENTERPRISE CONTRIB.
VERY SMALL ENTERPRISE CONTRIB.
LARGE COMPANY ONLY 1 3
N/A
LARGE COMPANIES PLUS MINIMUM OF 25% BY NO OF SMMEs 2
5% OF HIGHEST CONTRIBUTION
NO FINANCIAL CONTRIBUTION
ALL SMMEs
ALL SMMEs AND ALL BEE

21. THRIP STATISTICS Output for 2006/7 (interim) 338 projects
371 Industrial partners (66% SMME’s)
3178 students (55% black, 36% female)
17 BEE enterprises
Admin costs
4,5% (2005/6)
4.9% (2007/8, budget)

22. INDUSTRY CATEGORY(2005/6) NUMBER OF PROJECTS THRIP FUNDS (R)
AGRICULTURAL SCIENCES AND FORESTRY 28
BIOLOGICAL SCIENCES 17
ENGINEERING
210
HEALTH SCIENCES 8
MATHEMATICAL SCIENCES 2
PHYSICAL SCIENCES 19
SOCIAL SCIENCES, HUMANITIES AND OTHERS
TECHNOLOGY 15
OTHER 1
300

24. NUMBER OF THRIP FUNDED PROJECTS
GEOGRAPHICAL SPREAD
PROVINCE
NUMBER OF THRIP FUNDED PROJECTS
2005/2006
2006/2007
Eastern Cape 18
Free State 4 8
Gauteng
143
159
Kwazulu Natal 25 21
Limpopo 2 1
Mpumalanga -
Northern Cape
North West 13 14
Western Cape 95
117
TOTAL
300
338

25. STUDENT GRADUATES EMPLOYED
IMPACT:
STUDENT GRADUATES EMPLOYED
% OF STUDENTS
MANUFACTURING
(642 GRADUATES)
41.2%
COMMUNITY AND SOCIAL
(566 GRADUATES)
36.3%
ELECTRICITY, GAS AND WATER SUPPLY
(214 GRADUATES)
13.7%
AGRICULTURE
(97 GRADUATES)
6.3%
MINING AND QUARRYING
(21 GRADUATES)
1.3%
BUSINESS
(18 GRADUATES)
1.2%

26. IMPACT: INDICATORS (2005/6)
TIPTOPS
(STUDENTS)
174
NUMBER OF PATENTS
117
NUMBER OF PRODUCTS AND ARTIFACTS
236
NUMBER OF ARTICLES / PUBLICATIONS
3052

27. THRIP: Reviews 2006 External review
Government’s principal mechanism for promoting partnerships in pre-commercial research
Industry-wide – high social rates of return
Additionality (43% not in SA if not THRIP)
Improving efficiency of manufacturing industry.

28. THRIP: Reviews (cont) 2006 External review Some recommendations
Wide range of benefits – should be retained
Single body to oversee programmes
SMME participation to be encouraged – not as a hurdle
Improve effectiveness of disbursing funds, application process and funds auditing system

29. THRIP REVIEWS (CONT) 2007 OECD REVIEW :
THRIP recognised internationally – particularly successful when compared with similar schemes in other countries

30. THRIP: Specific projects
Bread for Africa
Hypertension
Socio-economic factors make it difficult to change diet
Medical Research Council and University of Cape Town and SASKO
Developed brown bread with 1/3 less sodium
Study indicated reduced sodium diet decreased blood pressure

31. THRIP: Specific projects
Changing face of crime
Developing a system to identify suspicious internet behavior
Self-Organising Maps for internet usage patterns
Reduces cost and processing time
Large datasets graphically
Broadens digital forensics’ scientific base
University of Pretoria , Information & Computer Security Architechtures (ICSA)

32. Websites:

33. THANK YOU