The gross domestic expenditure on research and development (GERD) in South Africa has gone up in real terms for the first time in four years, driven strongly by an increase in expenditure by the business sector, according to the National Survey of Research and Experimental Development by the country’s Human Sciences Research Council (HSRC). Despite the upswing, it is still short of the government’s target.
In 2021-22, GERD as a percentage of gross domestic product (GDP), a measure of research and development (R&D) intensity, reached 0.62%, a slight increase from the previous year’s 0.60%.
GERD encompasses all spending on R&D on national territory each year. It includes domestically performed R&D funded from abroad but excludes R&D funds paid abroad, such as to international agencies.
In 2015 prices, this growth amounted to a 6.9% year-on-year increase in 2021-22, from ZAR25.965 billion (US$1.37 billion) in 2020-21 to ZAR27.756 billion in 2021-22.
The government’s target is to spend 1.5% of GDP on R&D, President Cyril Ramaphosa said in December 2023. The latest figures also show the country’s expenditure on R&D is short of the commitment of African governments to spend 1% of GDP on research to advance Africa’s development.
The study found that in 2021-22, the expenditure increase was driven most strongly by the business sector, which is independent of and not directly affected by government budget cuts. However, the recent downscale in funding in the science vote is not reflected in the 2021-22 R&D data but is likely to only show up in the 2022-23 and 2023-24 surveys.
Post-COVID
However, while the growth in GERD in 2020-21 was welcomed positively by researchers, they acknowledged that the upturn came from a low base in 2019-20, brought on by the economic response to the COVID-19 epidemic.
Glenda Kruss, the executive head at the HSRC Centre for Science, Technology and Innovation Indicators (CeSTII), told University World News that the empirical data indicates that R&D plays a pivotal role in driving transformative advancements including job creation, heightened productivity, and sustained economic growth. Nations prioritising substantial R&D investments tend to excel in global competitiveness.
“R&D serves as a cornerstone for scientific exploration and discovery, expanding our comprehension of the natural world and yielding breakthroughs in fields like medicine, physics, chemistry, and environmental science. Innovations stemming from R&D efforts empower countries to uphold or enhance their competitive positions across diverse industries, positioning them as leaders in the global marketplace. Particularly in the healthcare sector, R&D in medical research is indispensable for uncovering new treatments, drugs, and medical technologies, thereby enhancing diagnostics, treatments, and overall healthcare outcomes,” Kruss said.
Furthermore, she added that R&D was instrumental in devising sustainable and eco-friendly solutions to address environmental challenges, driving the development of clean energy technologies, efficient resource utilisation, and strategies to mitigate the impact of human activities on the environment.
Key findings
Funding for R&D is derived from diverse sectors, public and private, with mutual funding relationships and substantial contributions from foreign funds. Despite budget cuts, the 2021-22 R&D survey shows that the public sector remains the primary source of R&D funding.
Nominal R&D expenditure rose across all five institutional sectors. The survey identified the ZAR3.48 billion increase in business sector R&D expenditure as the main contributor to the rise in GERD. The higher education sector increased R&D expenditure by ZAR446 million, the government sector by ZAR235 million, and the not-for-profit sector increased R&D expenditure by ZAR31 million.
The government remains the largest funder of R&D, accounting for 52.5% of total funding, followed by business (29.0%) and foreign sources (14.5%). Foreign financing has increased significantly over the past decade, with most investments directed towards higher education and business sectors.
R&D personnel increased across all sectors, with a total increase of 2,857 individuals (3.5% year-on-year) in 2021-22, including 1,716 researchers (a 2.8% increase). Notably, state-owned enterprises (SOEs) increased their R&D expenditure, with R&D personnel numbers rising in various sectors. Enterprises in the business sector employed 917 new R&D personnel, including technicians and researchers. However, they shed 140 researchers.
R&D personnel increased by 1,657 in the higher education sector, 155 in the government sector, and 79 in the science councils’ sector. The non-profit industry recorded an increase in the R&D personnel headcount of 49. In 2021-22, 1.9 full-time equivalent researchers were employed for every 1,000 R&D workers, an increase of 0.1 percentage points. The ratio of female researchers as a percentage of total researchers rose by 0.4 percentage points to 47%.
R&D activity in the manufacturing and financial services sectors has increased, driving most of the R&D expenditure. Medical and health sciences and social sciences continue to receive the highest R&D expenditure, at 22.8% and 18.4%, respectively. The field of research with the third-highest R&D expenditure in South Africa is information, computer, and communication technology (13.1%), which surpasses the engineering sciences field (11.7%).
Growth in social sciences is stagnant. The increase in 2021/22 came mainly from R&D in the natural sciences. Notably, investment in environmental research and funding for priority policy areas such as biotechnology, space science, and new materials have increased.
Dr Nazeem Mustapha, HSRC chief research specialist and the R&D survey’s principal investigator, said: “The growth in R&D expenditure is reassuring, although this comes off a very low base. The previous year’s decline in growth represented the biggest fall in R&D expenditure in the twenty years that the HSRC has been conducting the survey. We expect the next survey’s result to provide us with a better sense of what the trend is.”
Key indicators highlight positive economic growth in South Africa for the period under review. According to Statistics South Africa (2023), South Africa’s GDP rebounded by 4.7% in 2021-22 after a 6.0% decline during the COVID-19 pandemic in 2020-21.
R&D expenditure by sector
Constant 2015 Rand (R) values 2012-13 to 2021-22. Source: South African National Survey of Research and Experimental Development: Statistical Report 2021-2022
The Human Sciences Research Council (HSRC) was established in 1968 as South Africa’s statutory research agency and has grown to become a major research institute in the social sciences and humanities on the African continent. Research activities align closely with South Africa’s national development priorities. The report is produced by the HSRC’s Centre for Science, Technology and Innovation Indicators (CeSTII) on behalf of the South Africa Department of Science and Innovation.
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