The Technology Innovation Agency (TIA): Mobilising resources for Innovation led growth and development

TIA Vision and Perspectives08 March 2010

Stelelnbosch

Dr Nhlanhla Msomi, Interim CEO : TIA

Contents

1. TIA Background and Context• Policy Impetus• Bridging the “Chasm” • Landscape

2. TIA Strategic Context• Mandate, Mission and Objectives• Intent• Structure• Organisational Model and Modalities

3. Way forward• Migration and full operationalisation

SA Innovation Policy & Institutional Milestones

S&T White Paper

Technology ForesightStudies

R&DStrategy

Creation of DST

OECD Review

1996 2000 2002 2004

10 Year Innovation

Plan

TIA Act

2007 2008 2009/10

Explicit reference to Foundation for Technological Innovation (FTI)

NSI Challenges:•Existence of innovation “Chasm”•Fragmentation of instruments•Narrow definition of Innovation

The “Knowledge Economy”:•Knowledge = basic form of capital •Economic growth driven by innovation

TIA Board&

CEO

OECD Review: Key Findings

• A long term planning Framework is needed • Human Capital for S&T is sub-optimal• The governance framework needs more vertical

and horizontal integration• There is an innovation chasm with an insufficient

number of research products directly influencing the real economy

• Science, technology and innovation for social impact and poverty alleviation should be more pronounced and visible

Research Development Manufacturing

LocalKnowledge

Value addedlocal technology

Products & services

OVERSEAS TECHNOLOGY SOURCESResearch Development Production

Technology

Transfer

$

Innovation “Chasm”

Bridging the “Chasm” through local technology commercialisation and diffusion

PPP’s

Private Equity

Basic Research Applied Research Tech Development Manufacturing

IP V

alu

e

“Early

Stage”“Interm

ediate VC” “Classic VC”

TIA Support

Low Risk/High Return

High Risk/Uncertain Return

CoCs

TIA geared towards addressing “market failure”and building bridges and institutional linkages along the innovation value chain:

Partnerships(e.g. IDC)

Partnerships(e.g. NRF)

The TIA will focus its financial and non-financial offerings along the innovation chasm,

and will operate with the required flexibility across the innovation value chain through

mobilising and leveraging national, regional and international partnerships

Performers

Commercialisation

SETI Landscape

Agencies

CSIR

MRC

Mintek

NECSA

Industry

TIA

Industry

IDC

SPII

Industry

Industry

IDC

Basic Research

Applied Research and Technology Development

Pre-commercial R&D and Technology Development

NRF

General University Funds

Industry

Universities

Science Councils

Science Councils

Universities

Industry

Science Councils

Universities

Industry

Industry-scale technology demonstration and Commercial Start-up

Industry Industry

?

?

TIA Mandate & Vision

The TIA Act [No 26 of 2008]:

“The object of the Agency is to support the State in stimulating and intensifying technological innovation in order to improve economic growth and the quality of life of all South Africans by supporting the development and exploitation of technological innovations”

Strategic Context

• The TIA Act frames the mandate and its context (Mission and Strategic Objectives)

– Mission provides the four strategic pillars

• Appropriately structured financial and non-financial interventions

• Human capital development for innovation

• Developing a culture of innovation

• Leveraging local and international partnerships

– Strategic objectives – recurrent theme is competitiveness

• Leverage – capital inflows for technological innovation/transfer

• Support development of new products and services

• Grow number of technology-based start-ups and SME’s

• Support key industry sectors that are better able to utilize local and international technology innovation to enhance their global competitiveness

• Immediate challenge is to build an organisation that can deliver on these strategic imperatives

Strategic Vision & Intent

Build the TIA organisation focusing on governance, HR, Finance, technology

innovation management systems,

tech SME dev, and branding

Deliver first products in the market from the National Innovation

Strategies. Target one high impact product per

Strategy

FY 2010 - 2011FY 2012 - 2013

Restructure and Consolidate the

investment portfolio, focusing on new

funding instruments and support modalities

Leverage and Synergy

TIA’s Strategic Intent: A world class innovation agency that supports and enables technological innovation to achieve socio-economic benefits for South Africa through leveraging strategic partnerships

Model

Finance

Legal

IT

HR

Marketing & Communication

Knowledge ManagementKnowledge

Management

Advocacy & Capacity

Development

International Resources

Seed/Grant-------

Soft / Convertible Loans / Equity

-------Venture Capital

(PPPS)

Centres of Competence (CoCs)

Expert Services

Technology Nursery

Portfolio Management, Monitoring & Evaluation

Biotech & Health Biotech & Health

EnergyEnergy

Minerals Processing

Minerals Processing

ManufacturingManufacturing

ICTICT

Receive, Assign, Assess

Receive, Assign, Assess

Special Purpose Vehicles (SPVs)

In-bound Tech Transfer

In-bound Tech Transfer

Innovation for Social Impact (ISI)

Innovation for Social Impact (ISI)

Infrastructure Management

Risk Management OtherOther

Strategic Relationships

Corporate Services

Strategic Partnerships& Enabling Services

Fund Management

Technology Development &

Innovation

Technology Commercialisation

…TIA Functional overview: Assessment &

Recommendations

Funding

Advisory & Support services

Advisory & Support services

Commercial & Business Expertise

Commercial & Business Expertise

FUNCTIONAL STRUCTURE

Core 1Core 1 Core 2Core 2Support

3Support

1Support

2

Example Sectors

HUMAN DEVEL-

CAPI TALOPMENT

ADVOCACY & STAKEHOLDER MANAGEMENT

KNOWLEDGE MANAGEMENT

LEGENDTechnological

I nnovation Core Functions

Technological I nnovation Support

Functions

Operations Support Functions

EMERGI NG SECTORS

CHEMI CALS/ PLASTI CS

FABRI CATI ON & PHARMACEUTI CALS

FUNDI NG MI NERALS SECTOR

I CT SECTORI T

BUSI NESS & I NNOVATI ON

SUPPORT

OPERATI ONAL FI NANCES

TECHNOLOGY COMMERCI ALI SA

TI ON

MARKETI NG

MARKETI NG, PR & COMMUNI CATI ONS

STRATEGI C PORTFOLI O

(CONSOLI DATED) MANAGEMENT

TECHNOLOGI CAL I NNOVATI ON

CORE COMPETENCE

STRATEGI C SECTOR MANAGEMENT

BOARD SECRETARI AT

I NVESTMENTS MANAGEMENT

HR (Strategy, Policies &

Management)

TECHNOLOGY DEVELOPMENT

T I A O R G A N I SA T I O N A L F UN C T I O N S

LEGAL: COMMERCI AL;

I P

I NTERNAL AUDI T

OPS & ADMI N FI NANCE

PEOPLE DEVELOPMENT

AND STAKEHOLDER MANAGEMENT

OFFI CE ADMI N &

I NFRASTRUCTURE

ENERGY SECTOR

TIA Components

Two TIA components:

1. TIA central model:

• National strategy setting, planning oversight & governance (incl. Risk Management), regional support & coordination of all TIA functions

• Funding approval

• Executive portfolio management of investments

2. TIA regional model [strategy execution & implementation]:

• Gauteng; EC; KZN; WC; FS & NC; NW Limpopo & MP

• Corporate strategy execution, regional partnerships and linkages

• Technology Nurseries: client interface and advisory services

• Identify & assess opportunities, manage funded projects

Research Development Manufacturing

LocalIP and R&D base

Value addedlocal technology

Products & services

OFFSHORE TECHNOLOGY SOURCESResearch Development Production

(Royalties)

$

Bridging the Innovation

“Chasm”

In-bound Technology Transfer- Strengthening the R&D base and reducing the development risk -

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Mapping local assessed needs to:

(i) technologies available offshore and (ii) local technology and manufacturing capabilities

In-bound Technology Transfer based on assessed needs

Increased R&D and IP base

Improved manufacturing

capabilities

Fast-tracked product

development

Technology Business Support and Advisory Services (aka Nurseries)

ESSENTIAL INFRASTRUCTURE

• Technology stations• Technology platforms• Office and laboratory space• High value equipment

ESSENTIAL INFRASTRUCTURE

• Technology stations• Technology platforms• Office and laboratory space• High value equipment

TE

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TIATIA

PROCESS / PRODUCT CONFIGURATION

(test the market)

• Prototypes / clinical candidates

• Essential data / proven technologies / processes

BUSINESS DEVELOPMENT

(identify market opportunity)

• markets (what, types, sizes, dynamics, barriers, competitors, etc)

• economic viability

• commercial and legal (incorporation, business plan)

• intellectual property (freedom to operate, strategic licensing

ScienceCouncilsScienceCouncils

Higher Education Institutions

Higher Education Institutions

Techno-entrepreneurs

Techno-entrepreneurs

VIA

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ADVISORY SERVICES• Portfolio managers• Project management• Business warehouse• Expert Services

• IP management• Commercialisation

• Technology Transfer• Capacity/Infrastructure •In-bound technologies

Strategic Investment Portfolio:High Impact Projects

• Clearly defined domestic market, pref. with a strong public sector pull (AMC):– Particularly national priorities such as health, education, rural development

• Technology must be mature and IP possibly out of patent– Manufacturing bias

• Ability of the in-house TIA – Commercialisation & IP unit to negotiate technology transfer– Technology project managers to source, evaluate utility, and facilitate transfer

from technology sources to SME’s

• Availability of an appropriate local private sector company (preferably SME)

• Focus will be on current investment/projects portfolio, with the In-Bound strategy filling the gaps in the IP to move through the chasm:

– Engineering capabilities required for product manufacturing provided by internal platforms such as Tshumisano and AMTS

– Intensive mining of the inherited investment portfolio

• TIA will develop and execute an Implementation Plan by Q4, FY2010/11– Will require additional funding

Way forward: Board appointed April ‘09

Dr Mamphela Ramphele(Chair)

Dr Patrick Ngwenya(Deputy Chair)

Ms Cheryl Carolus

Prof. Susan Harrison

Dr Steven Cornelius

Ms Helen Brown

Mr Craig Venter

Mr IlanLax

Mr Ross Norton

Dr Nhlanhla Msomi(Member of Board

& Acting CEO)

Thank You!