Global Crisis’ & National Systems of Innovation: South Africa

1. Global Crisis’ & National Systems of Innovation: South Africa Rasigan Maharajh Institute for Economic Research on Innovation International Seminar on Innovation & Development under Globalisation: BRICS Experience 19th August 2009

2. Outline • Nature of Crisis • General Social Response • General Government Approach • Case of Science and Technology • Conclusions Institute for Economic Research on Innovation

3. GDP/capita Growth, 1961-2007 • Augustin Fosu (2009) ‘Institutions, Governance and Economic Development in Africa: A Review,’ Paper presented at the European Development Institute Workshop on ‘Transforming Structures: Security, Institutions, and Regional Integration Mechanisms,’ 16-17 April. Florence Institute for Economic Research on Innovation

4. Introduction • External Effects of the Global Financial Crisis • Financial Shock: • Decline in the availability of credit (the credit crunch) and • Increase in the cost of international credit • Trade Shock: • Decreased demand for exports • Negative growth = recession • Augustin Fosu & Wim Naudé (2009) The Global Economic Crisis: Towards Syndrome-Free Recovery for Africa, UNU-WIDER Discussion Paper No. 2009/03 • Lest we forget ... • Climate Change • Energy • Environment • Food Institute for Economic Research on Innovation

5. General SA Response • “the deepest and most serious economic crisis in at least the last 80 years” • Collective response of government, organised labour, business and community (NEDLAC 12/08/09). • "If the state is to play this role as the catalyst, the enabler and the developer then it requires that its resources are used with prudence” • Minister of Finance 17/08/09 • South Africa's government and its utilities will spend R787-billion over three years to improve the infrastructure and help revive the economy Institute for Economic Research on Innovation

6. Specific SA Response • Training layoff scheme • Strengthening the ability and capacity of the South African Revenue Service (SARS) to address customs fraud • State support to distressed sectors & companies: • Automotive sector • Clothing and textiles industry • Manufacture of capital equipment, transport equipment and fabricated metal products linked to South Africa’s infrastructure development programme • Payments by government to small, medium and micro enterprises (SMMEs) and other businesses within 30 days • Competition Commission’s investigations into and prosecution of firms in the food supply chain • Industrial Development Corporation (IDC) has made R6 billion available over the next two years to respond directly to the economic crisis. • NEDLAC 12/08/09 Institute for Economic Research on Innovation

7. Specific SA Response (detail) • Competition Commission’s investigations into and prosecution of firms in the food supply chain • Bread: Commission is already prosecuting the case; • Milling (Maize): Commission is referring the case to the Competition Tribunal for prosecution; • Dairy: case is already before the Tribunal; • Poultry: one case is before the Tribunal, with the wider conduct being investigated by the Commission; • Fats and Oils: already under investigation by the Commission; • Supermarkets: Commission’s investigation is beginning; and • Fertilizer: settlement with Sasol, with others being prosecuted • NEDLAC 12/08/09 Institute for Economic Research on Innovation

8. SA Science & Technology • ANC’s election manifesto is a commitment to create decent work and sustainable livelihoods. The manifesto commits an ANC government to use all means at its disposal to create jobs and livelihoods. • It commits the government to targeting labour-intensive production sectors, to the strengthening of sectors - like mining, clothing, and automobiles - vulnerable during the global economic crisis, and to promoting beneficiation programmes to ensure that the natural wealth of the country is shared and developed locally. • It commits the government to expanding investment in public infrastructure, to broad-based economic empowerment and affirmative action, and to focussed job interventions for young people among whom unemployment is particularly high. • And the manifesto specifically commits the government to create large numbers of ‘green jobs’ in industries and facilities that are designed to mitigate the effects of climate change. • Minister of Science and Technology 14/08/09 Institute for Economic Research on Innovation

9. Towards conclusions • Inequality cannot reproduce itself in perpetuity • Poverty has to be recognised and redressed • STI Policies are imbued with social consensus & conflict • STI Institutions are reflective of a precarious balance of forces • STI is not autonomous of the Political Economy • Engaging in redefining growth and development offers progressive potential • Techno-economic transitions' are not merely technical • Lets not waste a good crisis! Institute for Economic Research on Innovation