Submission on the TIA Billto the

Parliament Portfolio Committee16 January 2008

byThe Innovation Hub

Mr Tsietsi Maleho and Dr Jill Sawers

Introduction

The Innovation Hub (TIH) is strongly supportive of the principle of a TIA

Comments presented drawn from experience in working with small technology based enterprises

2

3

Business Clusters

Incubation

Key Elements of The Hub

Networking

INNOV8

EnablingEnvironment

Space

Education & Industry Interfaces

Technology Transfer

International Definition of a Science Park

A Science Park is an organisation managed by specialised professionals, whose main aim is to increase the wealth of its community by promoting the culture of innovation and the competitiveness of its associated businesses and knowledge-based institutions.

To enable these goals to be met, a Science Park stimulates and manages the flow of knowledge and technology amongst universities, R&D institutions, companies and markets; it facilitates the creation and growth of innovation-based companies through incubation and spin-off processes; and provides other value-added services together with high quality space and facilities.

IASP Definition April 20024

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Features of The Knowledge Economy

• Important drivers are Knowledge and Technology-based companies

• Small and emerging technology companies are vital to innovation system

• Important to have collaboration in the triple helix (business, research/academia, government)

• Successful countries have an enabling environment for innovation

What is innovation?

TIH working definition:

Innovation must lead to commercial products or services to impact economically or socially

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DM 3610001-2006 Copyright © Tekes

Innovation environment in FinlandResources and funding

Pri

vate

Basic research Applied research Business R&D

Business developmentMarketingInternationalisation

R&Dat companies

3,684

The figures represent the total extent of each organisation in million euros in 2004. In parenthesis the share that is funded from the State budget. The funds of Tekes, the Academy of Finland and Innofin are funded entirelyfrom the State budget.

BusinessAngels

approx. 380

Pu

blic

Finnvera412 (44)

Universities1,040 (454)

Academyof Finland

208Ministries,

TE-Centres,sectorial research

312 (221)

Tekes415

VTT218 (68)

From abroad169

Innofin6 (4)

Finpro32 (20)

Venture capitalists:Private 336

Industry Investment Ltd 37Sitra 28

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1. Concerns re. Object

Process for stimulating and intensifying technological innovation and invention: “by developing and exploiting innovations and inventions”

• Implies direct involvement rather than facilitation

• TIA will be perceived to compete with private sector and discourage collaboration

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Proposed additions to “Objects of Agency”

Anticipated ROIHave an effective innovation value chain that ensures that South Africa remains globally competitive by enhancing commercial and socio-economic benefits

Appropriate Methodology must result from collaborationTo establish a facilitating agency (TIA) promoting collaboration between business, research/academia and government interests

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2.Concerns re. 2.1 Powers and Duties

Para 4(1)(a)(ii) …establishing operational companies to develop/exploit any technological innovation or inventionPara 4(1)(c)…acquire any right in or to any technological innovation, invention, or patent….

– Government culture very different to entrepreneurial culture required to run agile companies

– Government will compete with entrepreneurs, but with public money (unfair advantage)

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2.2 Powers and Duties

Para 4(2)…where the Agency enters into any transaction with any …enterprise or company…the Agency must….ensure that the Department is represented in the (company) Board…– No discretion is left to the TIA Board or the Minister– TIA will HAVE to be represented on the boards of

EVERY investment• How big will TIA have to be?• How diverse will TIA’s skills set need to be?• Is questionable why government should play such a

direct role in business ventures – what value will it add and how empowered will the representatives be to make fast decisions?

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3. Concerns re. Board

TIA Board

– If Board makes technical decisions, this increases potential for conflict of interest and biased decision-making. Difficult to create Boards with the required level of independence when they comprise part-time members

– Bill addresses selection and operating principles, but not

adequately terms of reference, roles and responsibilities

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Conclusion

Comments have been based on experience of private sector knowledge-based businesses with governmental programmes

TIH strongly supportive of the creation of a TIA, but recommends international good practice in innovation funding viz. via grants and low-interest loans

For the necessary collaboration to stimulate innovation, TIA must be positioned as facilitational rather than competitive– The current TIA Draft Bill does not support this facilitational role

A long term ROI (employment and company taxes) rather than a short term ROI should be expected from TIA. TIA needs to be risk tolerant.

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Thank You

www.theinnovationhub.com

Finalist:

Intelligent Communities Forum (NY)

Visionary Project of the Year 2004

Tel : +27 12 844 0000

Fax : +27 12 844 1107

E-mail: info@theinnovationhub.com