Budget and Strategic Plan

FY 2008/9 David PhahoPresentation

to the PORTFOLIO COMMITTEE ON SCIENCE AND TECHNOLOGY

Date: 27 May 2008

Presentation Outline Tshumisano’s Strategic Intent & Moral

Purpose Envisaged Outcomes for Business Plan FY

2008/9 Programme Review for FY 2007/8

Technology Stations and their scope Performance Review FY 2006/7 – FY 2007/8 SWOT Analysis

Business Plan for FY 2008/9 Strategic Imperatives FY 2008/9 Income and Budget Forecast : FY 2008/9 –

2010/11

Strategic Intent: Strategic Intent: To be within reach of every SME in To be within reach of every SME in the country through its Technology the country through its Technology Transfer and related activities at Transfer and related activities at

Universities.Universities.

Moral PurposeMoral Purpose

To do what is right:

The efficient and effective usage and deployment of public funds.

To do what is worthwhile:

Providing world class technology solutions and training to SME’s to enhance economic growth

in South Africa.

Envisaged Outcomes for Business Plan

Increase the number and quality of SME’s assisted

through referrals and linkages with other Agencies and Government Programmes.

Enhanced alignment with DST’s ten year Innovation Plan.

Enhanced Human Resource Development with specific emphasis on Internship Programme and Student involvement

Continuous Improvement to mitigate Structural Inefficiencies within the Trust.

Why SME’s??

SME’s generally have higher growth tendencies (sales, turnover, jobs) than larger firms

SME’s accounts for a disproportion number of gross jobs created

Benefit of Economics of Scope rather than Economics of Scale – nimble and shielded from Exogenous shocks

Tends to be more Innovation intensive than large firms

Ref. Schreyer, P. 2000. High Growth Firms and Employment, OECD Science, Technology and Industry, Working Papers, 2000/3

Technology Stations Programme

PROGRAMME REVIEW for FY 2007/8

Technology Stations and Their Scope

Agro Processing and Chemical Cluster

• To Support the Chemicals and the Agro-Processing Industry.

• Formulations, Pharmaceutical and the Natural/Indigenous Products, Detergent & Paint .

• Testing and analysis in manufacturing low-end products.

Primary Manufacturing Cluster• The secondary

manufacturing cluster focuses on advanced manufacturing and value adding services within three critical industrialized sectors

• Specialises focus is in product development and prototyping

• Application of Smart materials, textiles and reverse engineering

Secondary Manufacturing Cluster

• This is a support cluster , with service of system automation and processing of materials.

• Material compositions and casting (foundry) solutions.

Performance Review FY 2006/7 -FY 2007/8

    

FY2006/7

First Six months of FY 2007/8

ProjectedFY

2008/9

FY 06/07 FY07/08 FY08/09

Activities for SME

Number of SME contacted _ 756 3000

SME assisted 1083 570 2600       Black Owned SME’s 200 118 290Females owned/ managed 221 65 318

Training activities

For one client/participation SME _ 35 _No of participating SME’s 332 184 400Open to a group of SME / no of events _ 56 _

Technology services

Testing and Analytical Services _ 881 _Manufacturing / Prototyping _ 125 _Consultation, Technology Audit _ 54 _Product or Process improvement _ 252 _PROJECT: Applied Research, Design & Development. _ 117 _PROJECT: Research & Development _ 64 _Technology Demonstration and Training _ 163 _

Internship Program

 

Placed at Station 87 99 230Place in related Industries _ 57 _

Manufacturing / Prototyping

8%

Technology Demonstration and

Training10%

Testing and Analytical Services

53%

PROJECT: Research & Development

4%PROJECT: Applied Research, Design

and Devl. 7%

Consultation, Technology Audit

3%

Product or Process improvement

15%

Type of Technology support from TSP Type of Technology support from TSP

First six monthsFirst six months of FY2007/08 of FY2007/08

 Comparing three (3) financial years of TSP growth    

PastCurrent(Q1 & Q2) Projected

FY 06/07 FY07/08 FY08/09

Activities for SME.

Number of SME contacted _ 756 3000

SME assisted 1083 570 2600

       

Black owned 200 118 290

Females owned/ managed 221 65 318

Training activities  

For one client/participation SME _ 35 _

No of participating SME’s 332 184 400

Open to a group of SME / no of events _ 56 _

Technology services

Testing and Analytical Services _ 881 _

Manufacturing / Prototyping _ 125 _

Consultation, Technology Audit _ 54 _

Product or Process improvement _ 252 _

PROJECT: Applied Research, Design & Devl. _ 117 _

PROJECT: Research & Development _ 64 _

Technology Demonstration and Training _ 163 _

Internship Program 

Placed at Station 87 99 230

Place in related Industries _ 57 _

20% compound increase of Technology Stations clientele = aprox. 1300 Technology base SME

Product Development Example

Adept Airmotive Ltd and Three Technology Stations Consortium

(CUT, TUT and UJ)

Technology TransferProduct Design & DevelopmentDevelopment and Application of New TechnologiesMechanical / Materials Testing ServicesProject ManagementProcess Control and MonitoringCustomized Education and TrainingQualitySystem Analysis and Design

                

Part of South Africa 1st Light Aircraft Engine Development

Tooled, Manuactured and Tested in South Africa

Worldwide Inquiries

SWOT Analysis

Positive Negative

Strengths Weaknesses

Consolidated mandate within national SME Development structure

Program accessibility to variety of SME’s in relevant sectors

Rapidly expanding network of SME’s served by programme

The Concept of Technology Diffusion to SME’s not adequately articulated

SME development alignment with Innovation Imperatives

Inadequate research output leading to low level of technology diffusion to SME’s.

Lack of understanding about the importance of Technology Diffusion to economic development.

Opportunities Threats

Integration of Tshumisano into the Technology Innovation Agency

National Supplier Programme @ Dept. of Public Enterprises

Project funding from other relevant SME Developing Agencies

Staff turnover at Technology Stations and IAT’s.

Uncertainty about industrial policy namely, MIDP review

Critical skills shortage in key economic sectors

Growing competition from low cost countries e.g. Clothing & Textiles

Business Planfor

FY 2008/9

Strategic Plan Summary2007 - 2011

Attribution Gap

Strengthen the Network of University based instruments servicing technology based Small and Medium Enterprises (SME’s) for participation in industrial value chains and promoting high growth economic sectors

Programme Objective

Component Objective

At least one Technology Station (TS) established in one of the 3 remaining provinces and planning phase underway for the other 2 provinces. At least 10 % of academics and consultants working on Tshumisano Projects engaged on Research to pursue Masters or Doctorates in Science and Technology (Engineering) by the end of 2009/10 (baseline 2007).At least 2500 SME’s assisted annually by Technology Stations and Institutes of Advanced Tooling (IATs) from 2007 until 2009/10All government SME development and funding agencies and 1 in every 2 technology based SME’s aware of Tshumisano and its services. Tshumisano occupying a permanent seat or allocated a permanent focal person in the Higher Education South Africa (HESA) and at least featuring once a year on the Agenda of the Council/Exco and reflected on the Annual Report of HESA by 2009. All Tshumisano driven activities are meeting equity targets of at least 85% black people, 54% woman and 4% people with disability.

ProgrammeIndicators

The level of Skills Development and Training at Tshumisano Initiatives

enhanced

50% of the Universities (with TS/IAT’s) receiving funding from National Research Chairs.50% training offered by the Technology Stations are fully Sector Education and Training Authority (SETA) accredited.At least 85 interns admitted with the Technology Stations Program (TSP) per year and 80% of them placed in industry or becoming entrepreneurs within 6 months after training.

ComponentIndicators

At least 100 SME’s products tested or developed per Technology Station per year as from 2007 to the end of 2009.At least 10 SME’s secured contracts on tested products by stations by the end of 2009.At least 12 products/tools designed, prototyped and tested per IAT per year.

Technology based SME’s initiatives supported in adding value to

enhance the competitiveness of their products

The facilities of Tshumisano developed and fully utilized and the

capacity of its employees and project leaders

enhanced

1. Human Resource Development

Components 2. Smart Industries

Economic growth, wealth and employment creation, increased black and female business participatory and productive citizenship

Impact -Indirect benefit

3. Institutional learning and development

4. Economic value added

Tshumisano Trust activities strategically aligned with other

stakeholders and promoted and marketed amongst

target group

At least each TS working in collaboration with another on a specific project.70/30 ratio usage of equipment by TS’s between SME related projects and University Research and Development (R&D) projects.All staff members registered for academic qualifications and short courses and 80% successfully completed.Tshumisano listed as a public entity by end of 2009

20% compound increase of Technology Stations clientele

One project implemented in collaboration with at least one stakeholder and/or agency

At least 8 SME’s referred to each Technology Station per year by another agency

20% annual increase in number of products, processing or services in the economy

Strategic Imperatives for

FY 2008/9

Human Resource Development:

At least three (3) Technology Stations accredited with their respective SETA

At least 120 interns admitted with the TSP program and 80% placed in industry

Increase the Human Capacity at the Technology Stations and the IAT’s to ensure increased output for the program.

Smart Industries: At least 100 SME’s products tested per Technology Station

At least 5 SME’s secured contracts on tested products per station

At least 12 products/tools designed, prototyped and tested per IAT

Additional Technology Stations (Mpumalanga and Northern Cape) -depends on availability of additional funding

Institutional Learning and Development :

Assist the Technology Stations within the clusters to work in collaboration with each other

Implement equipment audit with equipment usage log sheet at Technology Stations and IAT’s

All staff members at PMU and Centers registered for academic qualifications and 80% successfully completed

Economic Value Added : 20% increase on Technology Station clientele measured

against targets for FY 2007/8

Increase number of projects in collaboration with other agencies, measure against numbers from FY 2007/8

Initiate a national marketing campaign for all stations to ensure uniformity and management of all marketing channels from the PMU.

Income Statement and Budget Forecast FY 2008/9 – 20010/11

Income Statement Projections for the MTEFBudget Budget Budget

Operating Statement 2008/ 2009 2009/ 2010 2010/ 2011Core Grant from DST 36,000,000 36,000,000 38,160,000Deferred Income from 07/08 870,000 0 0Ring Fenced Funds:Internships 6,600,000 6,000,000 7,500,000Ring Fenced Funds:IAT 7,500,000 2,500,000 0Interest Received 612,000 600,000 606,000TOTAL INCOME 51,582,000 45,100,000 46,266,000ExpenditureHuman Resources/Salaries & Incentives 3,882,336 3,950,000 4,187,000Staff Development/Training 384,000 370,000 375,000Organisational Development 242,000 0 255,000Staff Recruitment 150,000 150,000 165,000Travel: Local & International 630,000 780,000 550,000Office Rental and Services 535,000 550,000 583,000Clleaning Services 2,500 2,800 3,100Insurance 320,000 350,000 320,000Communication Costs 300,000 350,000 300,000Stationery/Printing/Courier/Printing 345,000 355,555 255,000Subscriptions, membershipfees and resource centre 25,000 28,000 30,000Website Expenses 95,000 65,000 45,000Equipment Rental 120,000 125,000 128,000Vehicle expenses 30,000 35,000 38,000Office Maintenance and Alterations 15,000 18,000 5,000Entertainment expenses 50,000 65,000 50,000Audit Fees/Legal Services/Consultants 150,000 150,000 100,000Bank Charges & General Expenses & Interest Paid 50,000 45,000 45,000PR and Marketing 343,600 365,000 375,000Events and Conferences 507,100 450,000 550,000TA Forum 113,464 30,000 35,000

Total PMU Expenditure 8,290,000 8,234,355 8,394,100Payments to Programmes Running Costs 21,000,000 22,260,000 23,571,900Major Equipment Funding 3,750,000 3,750,000 4,200,000Major Project Funding 4,500,000 3,130,645 4,500,000Interns 6,110,000 5,600,000 5,600,000IAT Programme 7,062,000 2,125,000 0Other Projects - Indo- Germany 120,000 0Provincial Government western Cape 750,000 0 0Total Payments to Programmes 43,292,000 36,865,645 37,871,900Net Surplus to be carried forward to 2007/ 2008 0 0 0

GTZ Contribution FY 2008/9

German Inputs BudgetEuro

Budget Rand

Exchange Rate:@10.6/€(30.01.0

8)

Bill of Quantity Kind of Contribution

1 12 PM Local Technical AdvisorOrganizational Development

32,000,-- 339,200,--

2 12 PM German Tooling Advisor for Institute of Advance Tooling Initiative

60,000,-- 636,000,--

3 International Consultancy Service;

up to 45 days @ €320/day

Short-term Visiting German Experts to Technology Stations/ IAT’s

100,000,-- 1,060,000,--4 Training Coursesup to 10 assignments

Further Education & Training Programmes in Germany for Staff Members of Technology

Stations / IAT’s5 3 Trips Internships ( after completion of 1 year internship

at station)6 2 Trips;

up to 10 participantsInformation & Study Trips to Germany:

- Stakeholder tour- Project team

7 Local Consultancy Service 344 days:

@ 372 €

Local consultancy services:SETA accreditation/ISOE x 3Benchmarking (all stations)

RALIS X 5RALIS Reviews x 2

Review of RALIS tool

127,968,-- 1,356,466,--

8 International Consultancy Service 28 days:

@ 510 €

International consultancy service: RALISRALIS Review

Review of RALIS tool14,300,-- 151,368,--

9 2 x publications Publications 10,000,-- 106,000,--10 GTZ Overhead Costs (15%) 50,000,-- 530,000,--

Total Budget 2008/2009€394,268 R4,179,240

Qua Vadis

Tshumisano Trust?

Department of Science & Technology’s Technology Innovation Agency (TIA)

TIA’s Core Mandate: Nurturing Innovation for Sustained

Economic Development and Growth

Basic Applied Tech Develop Transfer & Proliferation

NRF

SpecialistResearch Funds

InternationalResearch Funds

TIAIDC

VentureCapital

SEDA

PBF

Publications/new knowledge Patents/new knowledge products

“Anchor Tenants” within TIA Tshumisano Trust – Technology Transfer and Diffusion from

Universities to Industry

Innovation Fund- Funding for protection of publicly funded research outputs

Biotechnology Innovation Centers – Biotechnology research and commercialization activities

Advanced Manufacturing Technology Unit (CSIR) – Development of advanced materials technologies; product and process technologies; ICT and logistics technologies

THANK YOU!!Tshumisano

Enterprise Centre, The Innovation HubLynwood, Pretoria

Tel : +27(0) 12 844 0413 www.tshumisano.co.za

“Enhancing SME competitiveness through technology”