DST stands by innovation strategy

Johannesburg, 13 Feb 2009

The Department of Science and Technology (DST) has defended some controversial decisions in its drive to improve technological innovation in the country.

Director-general Dr Phil Mjwara says the department's decisions - with regards to the Technology Innovation Agency and the Intellectual Property Rights (IPR) for Publicly Funded Research - have been well thought-out and make “reasonable sense”.

Mjwara also states plans for the July opening of the agency are on track: “We think we should be on target. We are in the process of finalising the board recommendations to the minister. If the minister accepts, he then has to consult the national assembly. If the national assembly agrees with the names, we should then have the board appointed as early as April.”

Board seating

The Technology Innovation Agency Act - which was signed by president Kgalema Motlanthe in November - allows for the establishment of the Technology Innovation Agency, which will consolidate all existing research and development agencies across the country. The Act has been criticised by the CSIR and biotechnology companies for allowing the government too much control in innovation processes.

The Act states that, in certain instances, when funding is approved, the recipient will be obliged to give the government a seat on its board.

Mjwara says not all companies will be subject to this provision and that occupying a seat on the board of the companies which they are funding is a measure which is necessary.

“When we have provided the funding, we would like to be part of the decision-making structure and ensure the proposition and mandate that TIA has is carried through ...because one day I, as the DG, and the minister have to account for whether the things the agency is set up for are delivered. And the only way we can do that is to sit in the structures of the board.”

This provision in the Act has come under fire as some feel government is taking a heavy hand in innovation.

Mjwara's response is that “government is not in the business of owning equity”. He adds that government will sell its equity once it is “satisfied that the objective has been fulfilled” - this is, once it has a sense the company is creating hi-tech value-added products that are being successfully exported.

In this sense, the agency would act as a venture capital company, in light of a new investment. However, Mjwara notes that, while there may be a similarity in their actions, government's objectives are different. But managing risk still remains a priority for the agency.

“What we also should remember in this game is that we will have successes, but we will also have a lot of ideas that don't fly and, the fact that we have been sitting in that entity, [means] we have a joint ownership [of the project]. For us, both on the cases where we make money and the cases where we don't make money, we have a joint responsibility. We've debated this many times and we think it makes reasonable sense.”

Funding game

Mjwara says that in the case of the IPR for Publicly Funded Research Act, the intention is to provide a clear framework for parties that fund research, as well as the recipients of the IP.

Following the signing of the Bill last year, the next step for the department is to establish offices of technology transfer in universities and guidelines determining who owns IP in the case of research collaborations.

“Now for the funders we want to provide a very clear set of guidelines on when you can own IP. And, in fact, we are developing regulations for when an individual or private company has fully funded the project,” explains Mjwara.

The Act has come under fire from the Shuttleworth Foundation for going against guidelines set up by global research consortia for open collaboration - and restricting international research efforts.

Currently, the Act states that, to sell IP offshore, a company has to register with the National Intellectual Property Management Office (Nipmo). The office will then investigate why it's being taken offshore and, if the company can convince Nipmo, then the IP can be sold.

“The only thing when you collaborate is that the institution abroad needs to understand if you are doing research with co-funding that the IP will belong to a university in SA. The condition for ownership is dependant on the funding.”

Mjwara says the department is developing a model of funding called full-cost funding. Under this framework, the total cost of funding would be expanded to include consumables, labour, operations and infrastructure costs - and determining ownership on collaborations will depend on the percentage contributed by parties involved.

“If they are fully funding the project, then the IP can be theirs - but if they are partly funding the project, then they cannot own the IP, because they haven't funded everything,” notes Mjwara.

However, he adds, while ownership will only be retained by one party, the benefits will be shared according to the funds contributed.

“We will have benefit sharing agreements. If you fund the project at 30% on cost model, it will mean you are entitled to 30% of the proceeds out of the commercial product.”

Mjwara says this will not be prescribed to research institutions, but will be the result of collaboration.

“Nobody is stopped from collaborating with any partner. The simple basic philosophy is that there ought to be an agreed benefit sharing model and agreed funding model - and this ought to be done together.”