Bio-Economy Strategy

1.1 From a Biotechnology Strategy to a Bio-economy Strategy 6

1.2 Bio-economy concept 6

1.3 Role players in the bio-economy 9

1.4 Role of the Department of Science and Technology 10 2

1.5 Conclusion 11 2. Strategic context 12

2.1 Introduction 12

2.2 Agriculture 12

2.3 Health 13

2.4 Industrial and environmental sector 13

2.5 The local bio-economy innovation landscape 14 3

2.6 Comparison with other countries 15 3. Factors enabling a bio-economy 18

3.1 Human capital development 18

3.2 Towards research excellence 18

3.3 Ensure access to next-generation technologies 20

3.4 Enhance the innovation system 20

3.5 Incentives and funding 20

3.6 Access to global intellectual property and knowledge pools 21

3.7 Promoting alignment with national priorities 21

3.8 Alignment of regulations 21

3.9 A stringent ethics framework 21

3.10 Effective communication and marketing 22

3.11 Institutional arrangements 22

3.12 Governance and coordination 22 4 4. The agricultural sector and the bio-economy 23

4.1 Strategic objective 23

4.2 Strengths and opportunities 23

4.3 Strategic interventions 23 5

4.4 Impact 25 5. The health sector and the bio-economy 26

5.1 Strategic objective 26

5.2 Strengths and opportunities 26

5.3 Challenges and gaps 26

5.4 Strategic interventions 27

5.5 Governance and coordination 29 6

5.6 Impact 29 6. The industrial and environmental sector and the bio-economy 31

6.1 Strategic objective 31 The Bio-economy Strategy

6.2 Strengths and opportunities 31

6.3 Challenges and gaps 32

6.4 Strategic interventions 33 7

6.5 Impact 36 7. The way forward and conclusions 37 Annexure 1: Indicators 38 Annexure 2: List of selected current initiatives and platforms 39 Annexure 3: National Biotechnology Strategy review 40 5 1 . the bio - economy concept

1.1 From a Biotechnology Strategy to a in the sectors that need them most, such as health, Bio-economy Strategy agriculture (including agriprocessing and fisheries) and industry (mining and the environment). The policy framework encapsulated in the Department of Science and Technology’s 2001 National Biotech- The National Biotechnology Strategy has reached a level nology Strategy aimed to create incentives to grow of maturity where it has become essential to re-evaluate. the biotechnology sector. The strategy resulted in the Biotechnology can provide solutions for a large number establishment of biotechnology innovation centres, the of the health and resource-based problems facing main structures of which were BioPAD, Cape Biotech Trust, South Africa and the rest of Africa, and it is necessary LIFElab and PlantBio, as well as two other structures, to utilise these solutions fully. In addition, we know that namely the National Bioinformatics Network and the Public life sciences cannot be restricted to the biotechnology Understanding of Biotechnology Programme. arena; developments have occurred where non-biological systems can have significant applications on living things. These biotechnology innovation centres resulted in several Therefore, the resultant emerging bio-economy needs platforms1, spin-off companies and commercial products to be nurtured through its application in the agriculture, and services being formed, bringing with them new jobs health and industry sectors. and increased capacity. They also promoted knowledge of biotechnology, intellectual property management and (A summary of the National Biotechnology Strategy can commercialisation, and improved public understanding be viewed in Annexure 3). and awareness of biotechnology.

1.2 Bio-economy concept Since the implementation of the National Biotechnology Strategy, it has become apparent that there are several “Bio-economy” refers to activities that make use of bio- gaps and inefficiencies in the innovation value chain. innovations, based on biological sources, materials and The main gaps in the National Biotechnology Strategy processes to generate sustainable economic, social and were the result of an implementation model that based its environmental development. In the bio-economy the focus on harvesting opportunities that represented a quick entire innovation system/network, ranging from ideas, return on investment. The strategy was not formulated to research, development, productisation2 and manufacturing develop a value chain for biotechnology-based products, to commercialisation, should be used to its full potential but focused on commercialisation of technologies that in a coordinated manner. were closer to the market. The Bio-economy Strategy provides an economic engine The biotechnology innovation centres developed the for the new economy that will, in turn, provide a basis for Department of Science and Technology infrastructure, skills and technologies required to stimulate future growth. These science-based “bio-solutions” can, the biotechnology industry. As biotechnology infrastructure for instance, be used to: and skills have become more established, there is an • manufacture high-value protein products such as increasing need to link biotechnology applications to the biopharmaceuticals and vaccines; more classical sectors, where specific needs or applications • produce biofuels; are identified and from where they can be driven. South • improve and adapt crops; Africa now needs to link these biotechnology capacities • remedy industrial and municipal waste; 1 A DEPARTMENT OF SCIENCE AND TECHNOLOGY biotechnology platform is defined as an entity that addresses a strategic need/gap in the innovation value chain by offering world-class technical services and expertise to external stakeholders. In order to maintain quality standards, certain internal or collaborative projects should be undertaken to develop and maintain the platform’s expertise at the cutting edge. ACGT. 2012. Review of Technology Platforms: Role in the South African National System of Innovation, commissioned by the Department of Science and Technology. 6 2 Productisation: The act of modifying something, such as a concept or a tool internal to an organisation, to make it suitable as a commercial product. Accessed on 28 January 2013, URL: http://en.wiktionary.org/wiki/productization#English • reduce production costs; • reduce environmental impacts; • improve the quality of products; and • improve the performance of a range of economic sectors. The vision is for South Africa’s bio-economy to be a significant contributor to the country’s economy by 2030, in terms of the gross domestic product (GDP), through the creation and growth of novel industries that generate and The use of biotechnology solutions is not new to the develop bio-based services, products and innovations, country. South Africa is ranked ninth among the 14 with a corresponding increase in the new and existing “mega-biotech” nations3 on the basis of the number of companies that provide and utilise these solutions. On hectares of genetically modified crops under cultivation. a macro-economic and developmental level, a thriving However, biotechnology is not the only element in a bio-economy has the potential to: healthy bio-economy. Developing the bio-economy will • make the country more competitive internationally require a range of competencies beyond biotechnology, (especially in the industrial and agricultural sectors); including information and communications technology • create more jobs; (ICT), nanomaterials research and manufacture, bio- • enhance food security; and entrepreneurship, the social sciences and intellectual property management. • create a greener economy as the country shifts towards a low-carbon economy. As the world’s third most biologically diverse country, South Africa has a major comparative advantage. The country is The bio-economy in South Africa should address the home to almost 10% of the world’s known plant species country’s socio-economic development goals of poverty and 15% of all known coastal marine species. South reduction and improved quality of life, while ensuring Africa comprises nine unique vegetation types (biomes), continued economic growth. Having a technology-push of which three have been declared global biodiversity and market-pull approach, the strategy addresses the hotspots, and is also the only country to contain an country’s developmental goals and needs, as well as entire floral kingdom – the Cape Floristic Region. South its industrial and agricultural competitiveness as South Africa’s natural capital of biological diversity, combined Africa adapts to the realities of global transition to a low- with its wealth of indigenous knowledge4, forms one of carbon economy. the country’s greatest assets. This capital can be used to the advantage of South Africa in the current economy As clearly articulated in the New Growth Path (NGP), through multiple approaches, including providing raw job opportunities exist in new economies such as the materials for the natural product sector; bioprospecting knowledge economy. The bio-economy is part of this for the development of pharmaceutical, cosmeceutical or knowledge economy where human capital development, industrial applications from compounds found in plants, specific skill sets and innovation are required. The bio- animals and micro-organisms; and use of indigenous economy can provide economic benefits when applied in plants and animals as food sources. various labour-absorptive industries in the country. These include i) manufacturing – which requires re-industrialisation The Bio-economy Strategy aims to build on the achievements in sectors such as pulp, paper, sugar and textiles; ii) of the National Biotechnology Strategy, incorporate the green economy relative to waste and energy security; lessons learnt and move forward with initiatives that can iii) minerals and mining beneficiation; and iv) agriculture address the challenges and embrace the opportunities of innovation. Furthermore, the bio-economy is also aligned the future. It focuses on creating an enabling environment within the Industrial Policy Action Plan’s key initiatives, for stakeholders – including government departments, such as pharmaceuticals in the production of local active established industry, venture capital and the broader public pharmaceutical ingredients (APIs) and manufacturing of The Bio-economy Strategy – to interact with life-science role players, academics, vaccines. In the green economy there are considerable researchers and private sector entrepreneurs to create recycling, re-use and recovery of industrial waste that value. It identifies areas where public policy can remove can be achieved with biological methods as well as the barriers, encourage innovation and improve cooperation production of biofuels. between stakeholders. 3 International Service for the Acquisition of Agri-biotech Applications, 2011. ISAAA Brief 43-2011: Global status of Commercialized Biotech/GM crops: 2011. Accessed on 19 November 2012, URL: http://www.isaaa.org/resources/publications/briefs/43/executivesummary/default.asp 4 Indigenous knowledge systems refer to a combination of knowledge, skills and technologies that communities of particular geographic regions have developed, and continue to develop, around their conditions and environment. Individuals’ knowledge and communities’ collective knowledge provide unique opportunities for 7 South Africa. The Bio-Economy Concept (continued) Case study 1: The Skin-tone Evener Candidate food processing farming endeavour to develop an Product development project agri-business for the community trust. Further support The Cosmeceuticals consortium, which comprises was provided to supply the project with basic farming partner organisations that represent different expertise infrastructure and in the management of small farming to enable the successful development of the candidate skills transfer. Empowered by the allocation of land product, conducted preclinical research to meet the by the Tshwane municipality to the community trust, above-mentioned product standard parameters. The the Cosmeceuticals team developed a business plan knowledge holder partner is a traditional healer who that was submitted to the Technology Innovation is the founder and trustee of a community trust called Agency for funding to erect a pilot plant on site. The the Mothong African Heritage Trust, a community first candidate product to be piloted for cultivation and development organisation that is located in Mamelodi pre-processing is a skin-tone evener product that has township, east of Pretoria. met all the efficacy, safety and quality standards. The pilot plant will be in operation by the end of March The relevant skills development process was conducted 2014, and envisaged to be fully operational by the end via the training workshops that were managed by of 2015. Two patents were registered locally in 2012, the Department of Science and Technology at the one international Patent Cooperation Treaty (PCT) Agricultural Research Council (ARC) and Council for patent on the skin-tone evener was filed in May 2013 Scientific and Industrial Research (CSIR) in 2011. and one acne patent was filed in August 2013. The Relevant bioprospecting skills were transferred intellectual property royalties will be shared equitably whenever necessary to support the farming and basic among the consortium members. Agriculture: Crops, fibre, livestock Biodiversity: Plants, microbes, marine resources Animal and plant therapeutics and diagnostics Phytotherapies and pharmaproduction • Large basic research Biomass Feedstock • Capacity and skills development • Technology platforms and Centres of Competence • Precommercial Infrastructure • IP management strategies • Legislation and demand support policies • Appropriate financing Department of Science and Technology • Internationalisation • Biosafety Health: Industry: Biological and chemical APIs, Fine chemical production Biofuels, bioplastics, biosimilars, vaccines, new bioproducts, unique enzymes therapies, diagnostics 8 Figure 1: Interconnectedness of the bio-economy Bioscience solutions primarily have application in the health, • non-governmental organisations; agriculture and industrial sectors, where clean processes • community-based organisations; for the production of biological renewable resources are • not-for-profit companies; and important. Figure 1 illustrates the interconnectedness of the bio-economy landscape (adapted from the Organisation for • the government. Economic Cooperation and Development (OECD) report5). The proposed roles of the different government departments

1.3 Role players in the bio-economy are indicated in the matrix below. The bio-economy cannot be restricted to biotechnology. The Department of Science and Technology, mandated The application of non-biological systems on living things to foster innovation in South Africa, is playing a leading can be significant. The Bio-economy Strategy therefore role but the input, activity and policies of the private sector shifts the focus from developing the biotechnology sector and other government departments are equally important. to developing a bio-economy, where the biotechnology It is therefore necessary that the government commits to sector will join forces with the ICT sector, environmental developing a sustainable bio-economy that encompasses agencies and the social sciences to create holistic solutions all its strategies and plans, especially those that are related for the agriculture, health and industrial sectors. to biotechnology, such as the Green Economy Strategy. South Africa’s private sector plays a key role in developing a While this strategy may be led by the Department of sustainable, knowledge-driven, science-based bio-economy Science and Technology, it will be guided and monitored by sector that is capable of innovation and commercialisation. interdepartmental stakeholder groups. This interdepartmental It is important that the government remains responsive to structure will function as a subcommittee of the Economic this and acts resolutely and pre-emptively to facilitate this Sectors and Employment Sector Cluster of government. development. The role players within the bio-economy The Department of Science and Technology in consultation will have to collaborate effectively if the bio-economy is with relevant government departments, respective to succeed. implementing agencies and other relevant stakeholders will develop implementation frameworks, which will guide These role players include: all associated stakeholders in developing implementation • industry; plans with respect to the Bio-economy Strategy. It is • academia; envisaged that stakeholders will implement the Bio-economy • science councils; Strategy on the basis of identifying specific niches which Implementation Drive Priority Human capital of innovative innovation setting development strategies Funding Science and Technology Health Trade and Industry Agriculture, Forestry and Fisheries Environmental Affairs Higher Education and Training Economic Development Energy Mineral Resources Rural Development and Land Reform The Bio-economy Strategy Water Affairs Social Development Human Settlements Traditional Affairs National Treasury Figure 2: Proposed roles of the different government departments 9 5 OECD. 2009. The Bio-economy to 2030: Designing a Policy Agenda, Paris: Organisation for Economic Cooperation and Development (OECD) The Bio-Economy Concept (continued) Governance and Implementation and Industrialisation and strategic oversight operational support economic development The National Bio-economy Strategy Government Implementing Research Venture Industrial departments agencies councils capital partners HEIs CBOs PPPs Entrepreneurs All stakeholders PPPs Markets CBOs • Policy development and • Generate knowledge and • Pilot scale-up, advocacy develop new technologies industrialisation and • Facilitate and coordinate • Develop and implement commercialisation integration of the RDI competencies and • SME/SMME support implementation plans programmes • Economic growth • Support and regulate • Generate new products and • HCD and job creation RDI competencies and processes • Community beneficiation programmes • HCD, tech-transfer and job creation • Community engagement and beneficiation • Technology demonstration / pilot Figure 3: Roles of different stakeholders fall within the ambit of their mandates. It is acknowledged 1.4.1 Coordinate stakeholders and role players that the strategy encompasses a number of cross-cutting The array of stakeholders and role players that needs elements, and these relevant government departments to interact meaningfully within a dynamic and complex will develop implementation plans with the Department system demands structural coordination. To this end, the of Science and Technology. Research and development government’s “capacity to provide leadership for economic across sectors will be fully integrated into the appropriate development”6 should also be increased. line departments, which will improve synergies within the national system of innovation. Figure 3 provides an The Department of Science and Technology primarily overview of the roles of the different stakeholders within ensures effective coordination and responsiveness (on the Bio-economy Strategy. The effectiveness of this behalf of the government) to industry and academia. integration will be measured through its outputs. The Such coordination will guide the development of strategic suggested indicators are listed in Appendix 1. These science capabilities and science programmes while helping indicators will be expanded to include sector specific to identify and address gaps and system failures. indicators. Department of Science and Technology

1.4.2 Develop strategic innovation competencies

1.4 Role of the Department of Science and Technology The development of strategic competencies and infrastructure will underpin the bio-economy’s competi- To ensure the success of the Bio-economy Strategy, the tiveness. The Department of Science and Technology, Department of Science and Technology undertakes to: working closely with multi-stakeholder coordinating • coordinate stakeholders and role players; committees, will drive the development of the following • develop strategic innovation competencies; and competencies and infrastructure in the country. The • develop strategic innovation programmes to address requirements identified for growth include: strategic gaps or opportunities for the country. 10 6 National Development Plan. 2012. Accessed April 2013. URL: http://www.info.gov.za/issues/national-development-plan/index.html • development of the full value chain from concept to capital, improving technological infrastructure, optimising product; the bio-economy’s value chain and improving participation • bioinformatics, functional genomics, structural biology, in the innovation system. These programmes should also synthetic biology and systems biology; focus on competitive applications that capitalise on local resources or geographical strengths. • technology service platforms; • pilot-scale infrastructure; It is imperative that such programmes are coordinated and • incubation facilities; managed at the highest level, and that key stakeholders are • financing; involved from the outset to ensure uptake and alignment. The success of the Bio-economy Strategy is dependent on • human capital development; the collaboration of the different government departments • instruments to address specific knowledge needs; in setting the priorities, providing the necessary funding • knowledge management to develop a bioportal; and developing the required human capital. • intellectual property management; and The strategic innovation programmes should address all • development of strategic innovation programmes. aspects of the innovation pipeline, taking into account the non-linear nature of the pipeline, as well as the links within

1.4.3 Develop strategic innovation programmes to the pipeline. An example of a non-linear innovation pipeline address strategic gaps or opportunities for is depicted in Figure 4, but there are others in existence. the country The Department of Science and Technology will take the 1.5 Conclusion lead in developing science-based programmes to address These three components of the strategy – coordination strategic gaps or opportunities for the country. During structures, strategic innovation competencies, and the implementation phase, defining priorities based on strategic innovation programmes – form the basis of national imperatives will be paramount. Furthermore, implementation of this strategy. They are expanded in innovative programmes should help guide strategic high- the following sections, firstly on a cross-cutting basis, risk ventures, with the added benefit of developing human and then per sectoral and/or thematic area. Concept/Idea: Ideas are continuously harvested and Concept scanned for in the bio-economy. This node represents the formulation of the idea, starting with prior knowledge. At this node, ideas are evaluated against market needs and Research eventually mature to a level that is ready for research. Research: Mature ideas are researched via the scientific process, to generate valid research results. Development: Research results are developed as proof- Manufacturing of-concept pilots. If necessary, they can be returned for further applied research. Specific aspects of the envisaged product are tested to ensure success of the proof of concept. Productisation Productisation: The technology is packaged in the form of a product that will be accepted by the market (e.g. shape, dimensions, colour, and texture). At the end of productisation, a prototype that can be manufactured is generated. Manufacturing: The product is manufactured. Aspects The Bio-economy Strategy such as scaling up of production are key. Commercialisation: A business activity that takes the Commercialisation manufactured product and launches it into the market via marketing, sales and other commercial tools. Development Commercialisation success is measured in sales, and ultimately, benefit (social or financial). © DNAbiotec® 11 Figure 4: Non-linear innovation pipeline 2 . ST R AT E G I C CO NTE X T

2.1 Introduction A robust bio-economy that involves all South Africa’s economic sectors, draws on the strengths of role players South Africa remains a country of extreme inequality. from both the public and private sectors, and is underpinned People living at one end of the spectrum enjoy some of by a sound bio-economy strategy can help grow the the highest living standards in the world, while those at economy. The Department of Science and Technology has the other end lack access to basic amenities, suffer food identified three key economic sectors – agriculture, health insecurity and are highly susceptible to major diseases and industry – as being the most in need of, and likely such as HIV and tuberculosis (TB). to benefit from a comprehensive bio-economy strategy. The National Development Plan7 proposes to reduce

2.2 Agriculture poverty and inequality significantly by 2030, by: • raising employment by promoting economic growth; South Africa is a semi-arid country – only 13% of its land • improving the quality of education, skills development area is considered arable. Climate change and population and innovation; and growth are significantly affecting the country’s ability to meet its citizens’ needs. Many households already face food • building the state’s capability to play a developmental, insecurity and poor nutrition, with 14% of the population transformative role. considered vulnerable to food insecurity, while about 25% Laboratory extraction Production and clinical and processing trial phases Develop and improve formula Department of Science and Technology Harvest biomass Investment returns Marketing and distribution The business/beneficiation model for the bio-economy is twofold. The model encompasses non-technological “low hanging fruits” and high-end technology-based beneficiation. For example, the non-technological beneficiation may include royalties from uses of IKS, commercial harvesting of raw biomass such as plant material through responsible bio-conservation practices, etc. Both segments will constitute employment creation through low and high-end skill HCD. The beneficiation model encourages strategic public private partnership and promotes social cohesion through socio-economic development. Figure 5: Beneficiation 12 7 National Development Plan. 2012. Accessed April 2013. URL: http://www.info.gov.za/issues/national-development-plan/index.html of children younger than six years are developmentally stunted due to malnutrition. Agriculture is critical for ensuring food security. It is also a major employer, responsible for 8% of formal employment in the country. As agriculture intensifies, biotechnology will play a crucial role in helping to improve the heat-resistance of crops and address the challenges of climate change, diminishing water and grazing, and potential loss of biodiversity. Crops are important as a food source for both humans and livestock. The livestock sector contributes 49% to agricultural output.8 Integrating South Africa’s bio-economy with those of neighbouring countries in Southern Africa will increase arable land and access to water resources. Agroprocessing has the potential to provide income- generating opportunities and access to food for the poor, as well as growing the international market. It should therefore be a major player in the growth of the bio-economy. The sustainable use of South Africa’s biodiversity should form an integral part of agroprocessing, while the commercial cultivation of indigenous plants should be promoted. The bio-economy of agriculture is discussed in greater depth in Chapter 4.

2.3 Health Disease burdens South Africa’s health system. Together per year, this is greatly offset by the cost of importing the with food insecurity and malnutrition, these conditions required ingredients. South Africa needs to develop the hamper the country’s efforts to address its Millennium ability to manufacture drugs, vaccines and other biologics Development Goals, particularly the goals of eradicating locally, to improve the health sector’s bio-economy and to poverty and hunger, and reducing child mortality.9 help the country achieve its public health goals. The way in which South Africa chooses to address global The bio-economy of the health sector is discussed in challenges such as communicable diseases plays an greater detail in Chapter 5. important role in determining the country’s research agenda. One key objective of the Millennium Development

2.4 Industrial and environmental sector Goals, as set out by the United Nations (UN) and signed by 189 countries, including South Africa, is to combat the The chemical industry is the foundation of manufactured scourge of HIV, TB, malaria and other diseases. According goods. It provides inputs for a wide range of products to the UN Millennium Project, “Science, technology and such as pharmaceuticals, food, fuels, plastics and other innovation policy needs to be oriented towards finding materials. This industry has historically been driven by the vaccines and cures for these diseases, while creating exploitation of non-renewable feedstock derived primarily new institutional frameworks from which new research from fossil fuels (petroleum, gas and coal) and industrial collaborations can spring.”10 minerals. The emerging industrial bio-economy is expected to improve the situation in respect of the manufacturing Many locally manufactured drugs, including generics, are sector’s energy intensity, water usage, waste management The Bio-economy Strategy made using imported active pharmaceutical ingredients. This and greenhouse gas emissions. These enhancements has negative implications for the bio-economy. Although the will improve the industry’s competitiveness and reduce local pharmaceutical industry generates about R30 billion its environmental footprint. Furthermore, it will be the 8 Agriculture in SA. Accessed November 2012. URL: http://www.info.gov.za/aboutsa/agriculture.htm 9 Millennium Development Goals: South Africa. Accessed 7 November 2012. URL: http://www.indexmundi.com/ south_africa/millennium-development-goals.html 10 UN Millennium Project. 2005. Innovation: Applying Knowledge in Development. UN Millennium Project Task Force on Science, Technology and Innovation. Earthscan. 13 p 25. Strategic Context (continued) focal point towards the development of agricultural and the fragmentation of funding instruments. The agency health sector products with industrial application and also incorporated the Innovation Fund. commercial viability. The Technology Innovation Agency is now operational. The industrial aspects of the bio-economy will be galvanised Its broad objectives are to: by legislation that creates demand for green products • provide funding and complementary services to bridge and puts a price tag on environmental pollution. Given the gap between the formal knowledge base and the the increasing drive towards a decarbonised economy, real economy; it is foreseeable that lower-carbon-emitting, bio-based • stimulate the development of technology-based products will be traded between different countries in services and products; future. This could create a market pull to which bio-based • support the development of technology-based products could easily respond. enterprises, both public and private; The contribution of the industrial and environmental • provide an intellectual property support platform; and components of the bio-economy is discussed in greater • stimulate investment (venture capital and foreign detail in Chapter 6. direct investment).

2.5 The local bio-economy innovation The National Biotechnology Strategy supported a linear landscape model of science, technology and innovation. In this The National Development Plan’s objectives include model, universities generate basic knowledge, which increasing the size and effectiveness of the innovation science councils then exploit and translate into innovative system, and ensuring closer alignment with companies technologies that can be commercialised by industry. As a that operate in sectors consistent with the country’s result, there is considerable activity in basic research (by growth strategy.11 universities) and applied research (by science councils). To effect this, the local research, development and While this is one model of science innovation – and has innovation landscape needs to be better understood. been instrumental in identifying gaps and inefficiencies in value chains – mature bio-economy systems have more Biotechnology in South Africa is dominated by research complex models that include “industry pull”, where applied projects, science councils and small biotechnology firms. research (whether academic, by a science council or a There are no large, integrated biotechnology firms to firm’s research division) is guided by an industry’s needs. speak of that are indigenously South African. Multinational Some models also use “inward technology transfer”, where corporations have a presence, albeit mostly through their successful technologies are imported and adapted to the distribution and marketing partners. Their research and local environment and market. technology development are usually conducted elsewhere. The most successful and mature bio-economies, such Since 2002, the government has invested over R1 billion as the United States of America and Switzerland, use a in implementing the National Biotechnology Strategy of model that focuses on creating an enabling environment 2001. The investments were allocated to research and for biotechnology and related fields by implementing a development projects, establishment and incubating suite of incentives to stimulate innovation and allow all companies and platforms. The overall investments stakeholders – the government, industry and academics in companies, platforms and projects yielded more – to interact and extract value from biotechnology.12 It than 240 technology-based products and services, should be noted that models can coexist and complement supported more than 400 science graduates, created each other. Department of Science and Technology about 1 000 jobs and produced more than 20 patents. The biotechnology innovation centres also used this A strong bio-economy is knowledge intensive and requires government funding to leverage 25% additional funding a high level of research and technical skills, especially from external sources. Despite these successes, ensuring in the disciplines of genomics (the study of the genomes the sustained performance of biotechnology companies of organisms), proteomics (the study of proteins) and has been a challenge, as is the case internationally. bioinformatics (the study of how biological data is stored, retrieved and analysed). “Non-scientific skills”, such In early 2010, the biotechnology innovation centres were as business skills, legal and regulatory expertise, and incorporated into the Technology Innovation Agency, which knowledge of financing and patenting, are equally important. was established to address the “innovation chasm” and 11 South Africa. 2011. National Development Plan: Vision for 2030. Government Printer: Pretoria. 14 12 OECD.1997. National Systems of Innovation. OECD: Paris. The global shortage of skills has been identified as a major Table 1 (on page 16) provides the basis for evaluating constraint to the development of the bio-economy. Not the contribution of key inputs, such as research and surprisingly, there is strong international competition for development capacity, financing and government support, skills, which has resulted in high workforce mobility. This into building a more productive bio-economy. indicates a need to integrate human resources development into research, development and innovation policy, and This comparison supports the notion that South Africa to create an environment conducive to attracting and should invest in building a strong science and technology retaining skilled people. workforce, as well as support venture capital funding and incentives for start-up biotechnology companies. This strategy is based on the assumption that the issues facing South Africa’s bio-economy – including human capital Other developing countries that have benefited from development, knowledge exploitation, market development developing their bio-economy used policies to nurture and governance – cannot be addressed in isolation, but and strengthen the science system. In the globalised need to be solved in an integrated, holistic fashion to environment, many countries have benefited from yield coordinated, systemic interventions. To harvest transnational trade in intellectual property. India’s vibrant local research and development for commercialisation, generic drug industry was built on existing technologies the country should build its capabilities from the bottom developed elsewhere. They have been able to develop up (through training, research and development), while intellectual property legislation and management strategies accelerating efforts for the development and establishment that balance the rights of multinational drug-development of support facilities and suppliers (backward integration) companies with those of a growing generics industry. and technology localisation. In countries with a smaller and less mature bio-economy, This strategy focuses on priority issues such as using such as South Africa, state intervention is imperative to intellectual property management and foreign direct bolster business activities in the absence of large private- investment strategies to fast-track market and industrial sector players and readily available venture capital. To development. It also aims to leverage partnerships to date, the government has played a key role in promoting gain access to useful intellectual property and other market success in strategic biosectors through its policy resources, and to create sophisticated incentives for instruments and by enlisting public research institutions. industry participation. Globally, knowledge and intellectual However, there remains much work to be done. property flows indicate that this is the most appropriate method to fast-track industrial development. The United States (excluded from the table) focuses on biotechnology patents and has the largest number of

2.6 Comparison with other countries dedicated biotechnology firms in the world. The country also boasts the highest number of publicly traded companies South Africa has much to learn from high and middle- that use biological innovation as their core competence. income countries that have succeeded in developing a The success of dedicated biotechnology firms in the sustainable bio-economy. Some of the critical success United States can be attributed to a thriving venture factors are a strong science foundation, positive institutional capital market and massive public support for research collaboration, private-public partnerships and a sturdy and development, which accounts for about 80% of total skills base produced by world-class organisations. These Organisation for Economic Cooperation and Development are supported by an enabling environment that includes a (OECD) public expenditure in the bio-economy. properly coordinated regulatory framework, research and development tax incentives, rational resource allocation In Brazil, more than 60% of the existing biotechnology for effective public-private partnerships, entrepreneurial businesses were incubated within science parks and development and strategic government interventions. 13 Brazil Biotech Map. 2011. Accessed 30 November 2012. URL: http://www.clustercollaboration.eu/documents/270120/0/Brazil_Biotec_Map_2011.pdf The Bio-economy Strategy * Total number of researchers (FTE figures not available) 14 Countries by population. Accessed April 2013. URL: http://en.wikipedia.org/wiki/List_of_countries_by_population 15 UNESCO 2010. Science Report. Accessed April 2013. URL: http://unesdoc.unesco.org/images/0018/001899/189958e.pdf 16 Brazil to Invest 10 Billion Reais in Biotechnology. Accessed 30 November 2012. URL: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aOMpCJMW luaY&refer=latin_america 17 Business Financial Assistance for Indian Biotech Entrepreneurs. Accessed 30 November 2012. URL: http://www.indiabiotech.in/Business-Financial-Assistance. htm 18 Beyond borders: Global biotechnology report. 2011. Accessed April 2013. URL: http://www.ey.com/Publication/vwLUAssets/Global_Biotechnology_ Report_2011/$FILE/Biotech_BeyondBorders_2011.pdf 19 Brazil Biotech Map. 2011. Accessed 30 November 2012. URL: http://www.clustercollaboration.eu/documents/270120/0/Brazil_Biotec_Map_2011.pdf 20 Investment Opportunity, Biotechnology. Accessed 30 November 2012. URL: http://www.investindia.gov.in/?q=biotechnology-sector 15 21 BioTechCorp, 2011. Malaysian Biotechnology Country Report, 2009/2010. Kuala Lumpur: Malaysian Biotechnology Corporation. 16 Department of Science and Technology Table 1: Comparison of indicators relevant to a bio-economy Country Australia Brazil Cuba India Malaysia Singapore South Africa Population14 22 823 882 193 946 886 11 247 925 1 210 193 422 29 570 000 5 312 000 51 770 560 Full-time equivalent 73 173 133 266 5 525* 154 827 9 694 27 301 19 320 (FTE) researchers15 Strategic Context (continued) FTE researchers per 4 224 694 493* 137 372 6 088 393 million inhabitants15 Scientific publications 28 313 26 482 775 36 261 2 712 6 813 5 248 Knowledge and skills (2008)15 Bio-economy-related 17 813 17 792 451 14 674 1 128 2 411 3 306 publications (2008)15 GERD as % of GDP15 2,06% (2006) 1,1% (2007) 0,44% (2007) 0,8% (2007) 0,64% (2006) 2,52% (2007) 0,93% (2007) Funding Venture capital Brazil government Government Amounts not 2006-2010: Government Government with government made R37,6 billion the source of available. R13,6 billion provided R23 provided support. The available for investment and Several funding (57% government billion (2006- ± R0,9 billion industry is biotechnology funding. R168 departments for funding 2010). (2002-2011). established, now (2007 – 2017).16 million per biotechnology from various Venture capital for making Australia Access to R800 annum focused institutes, NGOs, departments). pre-commercial the 5th largest million venture mainly on health individuals, phase still difficult. biotechnology capital fund. biotechnology.18 students, centre in the researchers and world.17 professionals. Large number of venture capital companies.17 Government National Government Founded the Biotechnology Launched National Established National support18 Biotechnology support since Centre for Genetic Regulatory Biotechnology Biomedical Biotechnology Strategy (NBS) 1970s. Engineering and Authority of Plan (NBP) in Sciences Industry Strategy (12001). (2000). Created BrBiotec Biotechnology India Bill, 2011. 2005. Partnership Office Established Financial support Used different Brasil initiative (1986). Invested This authority Malaysian (2010). biotechnology instruments to in 2010 to US$1 billion was set up as Biotechnology innovation centres implement, with foster technical over 20 years to an independent Corporation and the innovation Biotechnology and business develop science body and legal responsible for fund. Bio-economy Australia cooperation. node. committee to coordinated Strategy. responsible for Strong control the implementation of NBS activities. government production, NBP.21 NBS terminated in intervention.19 research, 2008 and replaced Incubation parks transport, import, by the Industrial supported. and usage Biotechnology of organisms Strategy. and products of modern biotechnology.20 94% of the businesses are linked with universities. This India did not grow its bio-economy organically by following is particularly useful for co-development, infrastructure the traditional route of sequential research, development, sharing and use of specialised services.13 innovation and commercialisation. Instead, it leapfrogged into a leadership position by building critical mass, providing The Brazilian government launched an “energy self- an investor-friendly policy framework for multinational sufficiency grand challenge” that resulted in a biofuels research and development companies, and assimilating industry boom that turned the country into a world technologies developed elsewhere by using various leader in industrial biotechnology. Cuba, on the other intellectual property instruments. hand, focused on technologies to secure its domestic pharmaceuticals supply, especially in the area of biologics. The above analysis suggests that, while there is no Today it is a world leader in health biotechnology, exporting single route to attaining a viable bio-economy, it is clear fermentation-based technologies to countries like India, that South Africa needs to increase its gross expenditure Brazil and China. significantly on relevant research and development. This funding should be used to capitalise on the country’s India and Malaysia used backward integration to develop opportunities and strengths and to adapt lessons learned key biotechnology sectors. A major characteristic of this from other countries. model is the focus on niche sectors that meet domestic needs first, but have potential to become globally competitive over time. Innovation in these countries was driven by public research institutions and a mixture of supply-and- demand policies. The Bio-economy Strategy 17 3 . Factors enabling a bio-economy To achieve a successful, thriving bio-economy, South The training of scientists, engineers and technicians at all Africa needs to: points in the value chain should be intensified. There is • attract, grow and sustain human capital; a particular need to develop “technopreneurs” who can • achieve and maintain world-class research develop diverse technologies into innovative products and standards; services at the downstream end of the value chain. An incentive system that provides the necessary absorptive • ensure access to next-generation technologies; capacity within the industry should be put into place • close gaps in the innovation pipeline; simultaneously with the development of human capital. • improve incentives for innovation and funding for It is essential to attract and retain key skills. Unless research, development and innovation; absorptive capacity is addressed as a key driver of this • improve access to global intellectual property and strategy, South Africa will continue to “export” key skills to knowledge pools; other countries and international sectors, remain under- skilled, under-resourced and fail to implement effective • ensure that research is aligned with mainstream technology transfer. and interface IKS and grass-roots innovation initiatives within the national system of innovation; The following specific goals, taken from the Department • align regulations with needs in the innovation of Science and Technology’s Human Capital Development pipeline; for Research and Innovation Strategy, inform this strategy: • implement the existing ethical framework to guide • Increase research productivity and training capacity biotechnological research; of supervisors and researchers. • engage in effective communication and marketing; • Grow the number of students enrolled for, and graduating and with, master’s and doctoral research degrees. • institute an effective leadership framework, • Provide opportunities for postdoctoral students, including all the stakeholders, to guide the especially in an industry environment. strategy’s implementation. • Boost the number of technologists and technicians with the skills and training to perform bio-economy- These factors, and their accompanying interventions, cut related activities. across all sectors and are discussed in this chapter. Sector- • Increase research and development support for strategic specific interventions are elaborated on in Chapters 4 to 6. science and technology domains to maximise their effect on innovation and economic development.

3.1 Human capital development Department of Science and Technology • Facilitate skills development at community level. South Africa has a limited number of people with sufficient • Grow research and innovation output by improving training to develop the bio-economy and take advantage coordination between, and joint interventions with, of existing opportunities. A critical mass of appropriately various government departments. skilled people is a prerequisite if the country is to compete • Foster international partnerships that will help expand successfully in the international bio-economy, as countries and improve research and innovation in South Africa. such as Cuba, Brazil, the United States and India demonstrate. In addition, a healthy bio-economy has to be underpinned by good basic education in mathematics 3.2 Towards research excellence and science. The performance of some South African universities, based on their international publications, is on par with that of 18 some of the top European universities22. Despite this, the capabilities of previously established initiatives such as the country’s scientific productivity – in terms of patents in life metagenomics platform need to be assessed in order to sciences and related fields – is generally poor compared enhance their potential to facilitate and support sustainable to its BRICS peers (Brazil, Russia, India and China) and bioprospecting activities. Capabilities with the potential other countries (such as Australia, Ireland, South Korea to offer a considerable competitive advantage for local and Singapore). Adequate funding for life sciences manufacturing industries may then be strengthened and disciplines and large research infrastructure and platforms relevant bioprospecting initiatives consolidated. is needed to raise the country’s production of patents in life sciences to the levels of its BRICS partner countries. The generic value chain below depicts the lead product development stages that are undertaken to generate value- Resources for research need to be increased, with added products in three IK-based flagships, namely, African agriculture, health and industry taking priority. It is also traditional medicines, Cosmeceuticals and Nutraceuticals necessary to improve research investment into the and represents a summary of testing phases during which basic scientific disciplines that underpin biotechnological efficacy, quality and, most importantly, safety are tested development, including bioinformatics, systems biology, and validated. The process begins with an IK-based synthetic biology, structural biology and functional information sharing process between the knowledge genomics. Non-scientific disciplines such as intellectual holder/community and research scientists. This initial property (IP) management and awareness should also phase ensures strict compliance to the relevant national benefit from this investment. regulations, while fostering a national system of science and technology. The lead development process undergoes Within this context, bioprospecting and biosafety are very a rigorous laboratory and animal testing that covers the important to build on the current strengths of South Africa. lead validation and optimisation stage. On condition that The country’s rich biodiversity and indigenous knowledge the lead meets the quality, safety and efficacy standards, systems provide significant resources for bioprospecting the lead enters a candidate product development phase unique offerings with potential socio-economic value. that covers the clinical/human studies. On passing the These include micro-organisms, enzymes, agrichemicals, product development phase of development, the candidate pharmaceuticals (herbal medicines/African traditional product finally enters the commercialisation process. medicine), cosmetics which contain extracts or compounds The beneficiation aspect for community and IK holders of indigenous biological resources, fragrances and is undertaken in every step of the innovation value chain. flavourants, as well as livestock. The capacity and Generic IKS-based bio-innovation value chain DST/DAFF/DRDLA/DEA DST/DTI/DRDLA Inclusive Applied IKS and Basic Product Incubation and Marketing and Research/ Research Development Manufacturing Commercialisation Innovation IAK Holders IAK Holders IAK Holders Academic/Science Academia Science Council/Private Sector/Agencies Councils The Bio-economy Strategy NRF/MRC/CSIR/ARC CSIR/TIA/NIPMO IK-SMMEs/TIA/CSIR/IDC/BUSINESS Community of IKS practice development Figure 6: The IKS-based bioprospecting and product development innovation value chain 22 World University Rankings 2012-2013. Accessed 12 March 2013. URL: http://www.timeshighereducation.co.uk/world-university-rankings/2012-13/world-ranking 19 Factors Enabling a Bio-economy (continued) With regards to Biosafety it is essential to be aware that 3.5.1 Bio-Innovation Venture Capital Fund biotechnology includes some remarkably powerful tools The Bio-Innovation Venture Capital Fund will be established that are used for the creation of new products and services. and managed as a public-private partnership, both as To ensure sustainability of such products, safety is an a way to attract private capital and to provide an exit essential component, not only for the final approval of the mechanism for investors. The Department of Science product, but for every stage of the development process, and Technology will facilitate the establishment of this including planning. Biotechnology as a field is developing partnership, which will focus on funding for research, very rapidly, and biosafety needs to be an initiative that development and innovation in biotechnology. develops apace with the technologies. An overarching Biosafety platform that is accessible to researchers and It is estimated that the fund will require R2 billion, of which the industry needs to be strengthened. the government should supply R300 million to R400 million (15% to 20%) over three years, with investors contributing

3.3 Ensure access to next-generation the remainder. An investment pipeline for the fund will be technologies developed locally through the Bio-economy Strategy, and Cutting-edge science is becoming increasingly sophisticated, internationally through inwards technology transfers. In with developments building on each other at a rapid pace. terms of the National Biotechnology Strategy, biotechnology Currently, each university, biotechnology company and innovation centres were tasked with leveraging funding government department has to independently source for biotechnology start-ups from the private sector. It is the latest equipment and knowledge at great time and therefore likely that the Technology Innovation Agency, in financial expense. Instead, the Bio-economy Strategy will partnership with the Industrial Development Corporation, endeavour to make these solutions centrally available to will play a key role in facilitating a venture capital fund by all role players through technology service platforms. This using government funds to attract private capital. system requires a governance structure to manage the development and service provision of these technology 3.5.2 Private-sector funding (national and platforms. international) and philanthropic partnerships Leveraged funding should be used to seed local philanthropic

3.4 Enhance the innovation system initiatives and social challenges such as HIV and TB. Enhancing and building the different nodes of the innovation Private-sector funding and in-kind capital (in the form system and the linkages between the nodes (as in Figure of, for instance, technology platforms and intellectual 3, page 10) will require increased state investment in life property) could be sourced through corporate social science incubators, science parks and pilot facilities for investment programmes. Examples of successful public- demonstration purposes. Such investments will, in turn, private philanthropic initiatives are the International AIDS reduce investment risk and stimulate follow-on funding Vaccine Initiative, the Medicine for Malaria Venture, and by the private sector. Successfully closing the gaps within the Foundation for Innovative New Diagnostics. the innovation pipeline will also contribute towards better linkages between researchers and industry, and promote These philanthropic partnerships should be able to access further public support for research. venture capital funds for further funding once the proof- of-concept stage is reached.

3.5 Incentives and funding The R1 billion invested during the eight years of the National Biotechnology Strategy was allocated to health (45%), agriculture (28%), industrial biotechnology (6%) and platforms (17%). More than 60% of these funds were dedicated to research and development activities. Department of Science and Technology The funding allocation for the sectors identified in the Bio-economy Strategy is inadequate. The proposed interventions will require additional resources. A variety of incentives are available; these include the Department of Higher Education and Training funding for academic institutions, science-based innovation and patent support, as well as the Research and Development Tax Incentives and the manufacturing tax incentives, which are already available to various components in the bio- economy value chain. 20

3.6 Access to global intellectual property and that are unnecessary in some cases. In addition, bio- knowledge pools entrepreneurs who seek to transact intellectual property with international partners are often not given suitable South Africa needs to access global knowledge pools guidance or support regarding exchange-control policies. and intellectual property if its bio-economy is to succeed These factors have, in the past, motivated local innovators in an increasingly competitive world. South Africa is to take their products to other countries, resulting in loss currently constrained by a generally weak understanding of intellectual property and job-creation opportunities for of intellectual property management in the private and South Africa. public sector. The country needs to implement a strategy to exploit expired, expiring or unenforceable patents to It is essential that all government departments involved produce bioproducts locally, at a fraction of the cost of in aspects of the bio-economy be committed to the Bio- importation. economy Strategy. Regulations that are not aligned with the Bio-economy Strategy need to be reviewed. Effective Immediate opportunities that could be exploited include regulations and their implementation are necessary for acquiring intellectual property (including patents, technology the bio-economy to succeed. Regulations regarding new packages and training) for the manufacture of biosimilars bioproducts, and the mechanisms and bodies responsible for (subsequent versions of approved biopharmaceutical the enforcement of these regulations, should be reviewed. products made by a different sponsor following patent Specifically, the regulations related to the following Acts expiry), generics and possibly biofuels and genetically need to be reviewed: modified organisms (GMOs). • The Genetically Modified Organisms Act, 1997 The establishment of the National Intellectual Property • The Medicines and Related Substances Control Act, Management Office (NIPMO), which has a national network 1965 of technology-transfer offices, has laid the foundation for • National Environmental Management: Biodiversity strategic intellectual property management. This needs Act, 2004 to be expanded to improve intellectual property brokering • The National Health Act, 2003 and trading nationally and internationally. • The Intellectual Property Rights from Publicly Financed Research and Development Act, 2008

3.7 Alignment with national priorities • The Currency and Exchanges Act, 1933 A large portion of the scientific research conducted in • The Consumer Protection Act, 2008 South Africa is not aligned with national priorities. This is, in part, due to limited funding and incentives for local research, which encourages local researchers to enter

3.9 A stringent ethics framework into better-resourced collaborations with international Modern biotechnology often raises ethical issues that partners with competing agendas. Internationalisation should be carefully considered because they can affect is generally regarded as a positive trait in academia, but human well-being, society and the environment. Ethical it does reduce research into local priority issues. This is controversies include issues related to developing, producing particularly concerning in view of South Africa’s relatively and using GMOs, transgenic and cloned animals, and stem small pool of researchers. cells. Bioprospecting (discovering and commercialising new products based on biological resources) that uses A more coordinated and integrated South African focus indigenous knowledge, confidentiality of genetic information is needed. It is essential that, in international research, and the environmental effects of biotechnological advances South African needs and priorities are also addressed. To are also matters to be considered. this end, the Bio-economy Strategy has identified three priority areas for research and development – agriculture, For the Bio-economy Strategy to achieve its objectives, health and industry/the environment. Providing funding the regulatory landscape should address the ethical to national research consortia that operate in these implications of all innovations, while taking care not to fields should be prioritised. The strategy also proposes stifle research and innovation. The country should strike The Bio-economy Strategy strengthening international partnerships to fast-track local a healthy balance between recognising the potential research and development capacity-building and the use benefits of biotechnology and ensuring that research is of inbound intellectual property. ethically conducted. This will require constantly evolving ethical and regulatory frameworks.

3.8 Alignment of regulations The Bio-economy Strategy should be responsive to both Regulation is a necessary instrument to protect the the social and economic needs of the South African public, while stimulating industry and innovation by setting population. Because public funds will be used to achieve standards. However, novel bioproducts that were locally the goals of the strategy, all initiatives need to be viewed 21 developed or licensed continue to face regulatory hurdles Factors Enabling a Bio-economy (continued) as a social contract between scientists and society. 3.11 Institutional arrangements Where data need to be shared, strategies to facilitate The local science and technology landscape has developed this process will be required. Researchers will need considerably in recent decades, resulting in different to conform to the highest levels of integrity in line with institutions having conflicting and overlapping roles and the principles enshrined in the Singapore Statement on activities. There is a need to: Research Integrity. Competent and responsible National • coordinate current institutional arrangements in terms Research Ethics Council reviews and clearances will be of their mandates, functions and activities in respect conducted where necessary. Role players involved in the of bio-economy-related issues; implementation of this strategy have to ensure that these committees function in line with international standards. • strengthen key institutions; and • encourage institutional collaboration.

3.10 Effective communication and marketing As the bio-economy comprises a complex set of technologies Such refinement has to be geared towards maximising that are often explained in terms that are heavy with the national system of innovation’s performance to assure jargon, the public’s understanding of it remains limited, industrialisation of the bio-economy. especially with regard to biotechnology.23 Yet the public already interacts with bio-based products in the form of 3.12 Government and coordination food, medicines, vaccines and environmental interventions An effective bio-economy strategy requires the cooperation on a daily basis. The Bio-economy Strategy strongly of many key stakeholders. Each of the sectors of the bio- supports initiatives to promote public understanding of economy (described in the next chapter) will be creating the technologies underpinning the bio-economy. a coordinating committee to give effect to this at the implementation level. Government stakeholders include This strategy seeks to enable a vibrant, globally competitive the Department of Trade and Industry, the Economic bio-economy, which requires individual life-science products Development Department, the Department of Health, and the system of innovation as a whole to be marketed the Department of Higher Education and Training, the to local and international markets and stakeholders. Such Department of Environmental Affairs, and the Department promotion should include participation in, or hosting of, of Agriculture, Forestry and Fisheries. Public research international conferences and other relevant forums. It organisations, the private sector and civil society will should also make use of electronic marketing, by creating also play key roles. and maintaining a South African bioportal that provides information on relevant technology skills, opportunities, It will therefore be prudent to establish an appropriate products and linkages in the South African bio-economy. leadership mechanism to guide the strategy’s implementation. Overseeing the sector coordinating committees will be the responsibility of the Department of Science and Technology. Department of Science and Technology 22 23 Public Understanding of Biotechnology Survey (2004). Commissioned by the Department of Science and Technology. 4 . THE A gricultural Sector and the Bio-Economy

4.1 Strategic objective yet still offer superior nutrition. Local knowledge has helped unlock the value of these indigenous resources. However, The Bio-economy Strategy’s objective with regard to a growing population and limited water and arable land agriculture is to strengthen agricultural biosciences require new approaches to meeting the country’s needs. innovation to ensure food security, enhance nutrition and improve health, as well as enable job creation through the Geopolitically, the development and encouragement of expansion and intensification of sustainable agricultural agro-innovation across Africa should be viewed as a production and processing. longer-term outcome of this strategy. Tertiary education of nationals from across Africa remains critical. Where

4.2 Strengths and opportunities appropriate, influence should be brought to bear on the Primary agriculture contributes about 2,5% to South Africa’s regional harmonisation of regulations governing the GDP and about 8% to formal employment. Agriculture registration and introduction of new varieties of crop/ has strong links to the broader economy, with the agro- livestock and biocontrol agents to enable sustainable, industrial sector comprising about 12% of GDP.24 The competitive agriculture across the continent. primary production, secondary input and agroprocessing sectors together form the “agro-food” complex, an important Responsible genetic engineering remains a critical economic sector. While the country produces enough technology for agriculture and in South Africa presents a food to meet local needs on a national scale, there is significant competitive opportunity for sector development. widespread household food insecurity.

4.3 Strategic interventions South Africa has well-established maize, sugar cane, Of the three sectors identified as crucial elements of the wine and deciduous fruit industries for the local and bio-economy, the agricultural industry currently has the export markets. These industries depend on research, highest economic impact. Research and development development and innovation to remain competitive. interventions in this field will help ensure food security, Historically, the Agricultural Research Council (ARC) and improve general nutrition and create jobs both in agriculture its institutes, as well as universities, provided a strong and in research. These interventions should be driven by research and technology development base to support strategic need as well as market demand, and will require the primary agricultural industry. However, extension work strong private-sector involvement. (communicating know-how on new and improved crops/ livestock to farmers) is poorly resourced and needs to Unlocking the value of indigenous crops, coupled with be strengthened. consumer demand for “natural” products, presents opportunities for South Africa to capitalise on its biodiversity Recently, a few small local companies that commercialise and capture niche markets. Indigenous products that biopesticides and innovative new crop-propagation and show promise include monatin (a sweetener), fortified post-harvest technologies have emerged. However, the sorghum, rooibos and honeybush. The Bio-economy Strategy ARC remains government’s primary instrument for driving agricultural innovation, and significant reinvestment is Short- to medium-term strategic interventions to enhance required to maintain and grow sustainable crop yields. the sector’s competitiveness are outlined below and span the full innovation value chain. South Africa has a rich biodiversity that includes indigenous crops and animals that have adapted to harsh local conditions 24 South Africa Online. “Agriculture, forestry and land”. Accessed 8 November 2012. URL: http://www.southafrica.co.za/about-south-africa/environment/agriculture- 23 forestry-and-land/ The Agricultural Sector and the Bio-economy (continued)

4.3.1 Establish a coordinating committee to advise, guide and monitor agricultural innovation A committee comprising key representatives of government, industry and academia should be established to guide agro-innovation. The committee would prioritise resource allocation, monitor research and development progress, and recommend initiatives to enhance and develop the sector within the scope of the Department of Science and Technology’s implementation plan.

4.3.2 Establish a network of agro-innovation 4.3.3 Crop/livestock improvement for biotic and hubs that enhance technology transfer and physical stresses associated with climate extension change (including indigenous crops) The skills and solutions that emerge from biotechnology Crop/livestock improvement is a basic programmatic research need to be effectively transferred to emerging, requirement for the agricultural sector. Research and small-scale and commercial farmers. Regional agro- development programmes need to focus on the commercial innovation hubs can act as catalysts for the collective sector and on indigenous crops/livestock to develop traits enhancement of production, agroprocessing and marketing appropriate to emerging and subsistence farmers. by farmers, scientists and innovators. This further enables extension work, a critical need in the intensification of 4.3.4 Agroprocessing initiatives agricultural development. The role of IKS will be critical Agroprocessing reduces post-harvest losses, extends shelf in enhancing grassroots innovation for food security and life and improves the quality and safety of foods. There improving quality way of life. are significant opportunities for agroprocessing to add value to agricultural produce, and enabling mechanisms should be devised to expand agroprocessing innovations Case study 2: The IKS community technology and establish small and medium enterprises that improve transfer initiative on Moringa agri-business the quality of South African agroproduce. development The IKS Policy (2004) explicitly mandated the 4.3.5 An integrated food nutrition research National IKS Office to lead the technology transfer programme initiative through a skills transfer and the stimulation Food quality is of growing importance, not only for the local of grassroots and community-driven innovations. market but also for the export market. The government In 2011, this policy directive was initiated via the needs to partner with universities, science councils, the research, development and innovation approach private sector and civil society to promote research into using the super-nutritious Moringa oleifera tree. the nutritional composition of food and the detection and This community development drive employs the elimination of contaminants. cultivation research skills of the ARC and the innovation research capacity of the University of the

4.3.6 Animal vaccine capabilities Witwatersrand and the University of KwaZulu-Natal. Local research and biotechnology institutions have the Two community-based cooperatives led the capability to develop vaccines and diagnostic kits to mitigate farming community development venture, namely, the risk of potentially devastating outbreaks of livestock Phedisanang Construction and Projects Primary diseases. World-class platforms have been established Cooperative Limited (located in Tooseng, rural to support research and development (at Onderstepoort Department of Science and Technology Limpopo) and the Sedikong Organic Cooperative Veterinary Institute) and the manufacture of animal vaccines (located in Atteridgeville township, Pretoria). The (at Onderstepoort Biological Products). However, further research and product development has added value investment is required to build human capital and critical to eight Moringa products that the two communities infrastructure to reinvigorate this sector. produce and commercialise in the informal sector. Innovation research has given rise to new products, 4.3.7 Energy crop initiatives namely, the Moringa ice tea and the Moringa The emerging biofuels industry will rely heavily on the vitamin water, with the latter product resulting in agricultural sector for low-cost, low-maintenance energy a local patent registration in 2012. The intellectual crops (such as sweet-stem sorghum, sugar beet, triticale property royalties will be shared equitably among and some species of grass), cultivated exclusively for biofuel the Moringa team member organisations. production. The ARC and other relevant stakeholders 24 need to consolidate and enhance their research and through programmatic co-funding initiatives between development in this field, as significant developments in industry bodies and government. science, technology and engineering are still required to enable cost-effective conversion to biofuels. Clear linkages 4.4 Impact should be maintained with the industrial biotechnology The agricultural sector is of critical importance to the growth initiatives described in Chapter 6 of this document. of the South African economy. With relatively little capital infrastructure required, it remains a key opportunity for

4.3.8 Biocontrol and biofertilisers poverty alleviation, job creation, economic development The National Biotechnology Strategy supported a number and household food security in South Africa. of small, dedicated biotechnology firms that commercialised biocontrol products such as biopesticides, plant-growth Expanded research and development is essential to regulators and biofertilisers. These products benefit maintain this sector’s competitiveness, particularly in the environment as they reduce the need for traditional the light of climate change and population growth, but chemical pesticides and fertilisers. Such biotechnology also to expand the agricultural opportunities available firms are essential for a robust, competitive agricultural to South Africa. sector. Programmes to enhance commercialisation of technologies should be developed. Developing the ability to formulate and manufacture animal vaccines locally has the potential to save the agriculture

4.3.9 Aquaculture industry billions of rands in input costs and lost income, while also ensuring security of supply. Outbreaks of foot- Aquaculture promises a cost-effective means of providing a and-mouth disease in cattle and avian flu in ostriches have sustainable protein source. This emerging sector in South already cost the local industry hundreds of millions of Africa has a strong need for research, development and rands in lost export revenue, posing a significant threat to commercialisation to help establish it as a sustainable employment. African horse sickness is a growing problem. and growing component of the broader agricultural sector. Affordable animal vaccines and breeding of more sturdy indigenous animals will substantially benefit the industry.

4.3.10 Soil conservation Indigenous crops need to be developed and commercialised Soil conservation is critical to the sustainability of agriculture. to improve food security and affordability, and create Investment is required to ensure that soil conservation export opportunities for niche products. A vibrant crop- and optimal practices are researched and implemented improvement biotechnology industry, together with a world- by commercial and emerging farmers. class nutraceutical and agroprocessing sector is essential to maintain the competitiveness of South African exports.

4.3.11 Water resource management Agriculture uses a significant portion of available water in The development of energy crops and processes to South Africa. In order to intensify agriculture to address support the country’s emerging biofuels industry can help food security and job creation objectives, research into the develop rural areas and will support the green economy. optimal management practices for irrigation and recycling should be supported. In terms of measuring progress in the agricultural portion of the bio-economy, there are both input and output

4.3.12 Build high-value skills and capacities to measures. The input measures include increased fiscal enable agro-innovation expenditure on research, development and innovation projects, on the provision and establishment of equipment Although broadly dealt with under the human capital and infrastructure, and on coordinating networks. These will section of Chapter 3, the growing shortage of suitably be lead indicators for the outcomes from such investment, trained agricultural scientists is considered a special which will be measured through the number of patents case for urgent intervention. The creation of an incentive awarded, the number of bio-innovation firms established, system to promote key skills, including plant-breeding, and the number of products available commercially. agronomics, plant physiology and biometry in tertiary-level The Bio-economy Strategy agricultural education is critical. In the longer term, as the agricultural sector becomes more competitive, there will be increased job creation

4.3.13 Co-funding initiatives for innovation through agricultural effort, and there will be more locally The agricultural sector is well established and values developed indigenous and GMO crops. More multinational the importance of research and development in order to companies will have invested infrastructure in their South maintain a competitive edge. Industry-relevant research African holdings, and ultimately there will be an expansion and capacity development will be supported and stimulated of revenues derived from agriculture. 25 The Bio-Economy Concept (continued) 5 . T he H ealth S ector and the Bio-Economy

5.1 Strategic objective • an improving public- and private-sector focus on generics supply chain management, which offers The Bio-economy Strategy’s objective with regard to opportunities for local manufacturing; health is to support and strengthen the country’s local research, development and innovation capabilities • flora and unique micro-organisms offer a largely to manufacture active pharmaceutical ingredients, untapped source of new therapeutics and production vaccines, biopharmaceuticals, African traditional medicines, platforms; diagnostics and medical devices to address the disease • modern science, local biodiversity and indigenous burden, while ensuring a secure supply of essential knowledge systems could be combined to accelerate therapeutics and prophylactics. The health research and product development; innovation priorities are set by the national Department • world-class clinical sciences researchers and a of Health. These priorities are in line with the Millennium regulatory framework provide opportunities for globally Development Goals, which include the reduction of child competitive clinical development; mortality, improvement of maternal health and reducing • world-class researchers in basic sciences, drug and the burden of HIV, malaria and other diseases. The UN is diagnostics discovery, and therapeutic delivery systems; of the opinion that: “Science, technology, and innovation • significant historical and current investments in vaccine policy should be oriented towards finding vaccines and production; and cures for these diseases, while creating new institutional frameworks from which new research collaborations can • strategic international partnerships with countries and spring.”25 organisations, which could be leveraged to provide a source of innovation and other benefits.

5.2 Strengths and opportunities Research, development, innovation and manufacturing In 2011, the South African pharmaceutical market was interventions will focus on these opportunities. The health worth about R30 billion ($3,8 billion).26 The market size sector will work on discovering and developing new drugs, of this sector and its contribution to a negative balance vaccines and biologics, diagnostics and medical devices, of trade is the most significant component in the health as well as exploring opportunities in clinical research and bio-economy. South African imports of pharmaceutical indigenous knowledge systems based on biodiversity. The products (excluding active pharmaceutical ingredients) local manufacture of active pharmaceutical ingredients for were just below R16 billion in 2011. Imports of vaccines drugs and biologics (including vaccines) will be expanded, and other biopharmaceuticals increased to over R2 billion and new technologies such as stem-cell therapies will in 2011. The diagnostics industry (the full value chain) is also be explored. valued at R7 billion per year. Department of Science and Technology The local health sector has several strengths that could be

5.3 Challenges and gaps used to bolster the Bio-economy Strategy. These include: To address challenges relating to the discovery, development • the largest market in the world (by volume) for HIV and manufacture of new diagnostic, therapeutic and drugs; preventive healthcare products, South Africa needs to: • a well-developed generics industry; • invest in human capital development; 25 UN Millennium Project. 2005. Innovation: Applying Knowledge in Development. UN Millennium Project: Task Force on Science, Technology and Innovation. Earthscan. p 25. 26 GBI Research, 2012. Emerging Pharmaceutical Market in South Africa to 2017 - Proposed Introduction of New Drug Regulatory Agency (SAHPRA) to Accelerate 26 Drug Registration Process. Accessed 29 January 2013. URL: http://www.marketresearch.com/GBI-Research-v3759/Emerging-Pharmaceutical-South-Africa- Proposed-7025791/ • enhance strategic partnerships for the transfer of skills There is an urgent need for a strategic and coordinated and the strengthening of discovery, development and research, development and commercialisation programme pre-clinical activities; within a national agenda. • invest in new and accredited research and development infrastructure; 5.4 Strategic interventions • expand the clinical research industry, building on The development of new and improved therapeutics pockets of excellence in the public and private sectors; (drugs, vaccines, phytomedicines, African traditional • develop research and technical capacity, as well medicines and biopharmaceuticals), diagnostics and as critical mass in key research, development and medical devices is a key area of intervention. Historically, manufacturing areas; investment in health innovations has been substantially greater relative to the agricultural and biomanufacturing • improve the response rate of regulatory authorities and sectors. However, compared to other countries, these develop appropriate regulations for complementary investments have been insufficient given the time and and African traditional medicines; financial cost of therapeutic development. According to • fund research and development for new and improved the World Health Organisation, the international aim is drugs, vaccines, diagnostics and medical devices; to spend about 2% of the health budget on research and and development.27 • coordinate and streamline activities across the product development pipeline. South Africa’s national system of health innovation includes the development of: A cost-effective preclinical and clinical framework is essential • new drugs, vaccines, diagnostics and medical devices; to convert the outputs of research and development into • new techniques in process engineering and usable health products. manufacturing; and • new approaches and policies in health systems and Preclinical and clinical research plays an important role in services, including a better understanding of human demonstrating the safety and efficacy of products, allowing health behaviour. them to gain regulatory approval for market entry. This part of product development can account for up to 70% South Africa will build its health innovation system using of costs. The cost of bringing a new therapy to the market the “quadruple helix” model to integrate existing role has escalated to over US$1 billion per therapeutic agent players – the government, academia, industry and civil and can take 12 to 15 years. These costs are largely due society – into a unified and coordinated system. According to protracted, complex regulatory requirements, localised to the model, industry operates as the seat of production, preclinical development in developed countries and the government provides the framework for secure contractual high cost of clinical research. relationships, and universities provide new knowledge, innovation and technology, while civil society will provide Challenges in the commercialisation and manufacturing inputs as users of the innovations, holders of traditional processes include lack of infrastructure for pre-commercial knowledge and co-innovators through consultation. and commercial development and, in particular, appropriately accredited infrastructure for technology developments. The Bio-economy Strategy will prioritise strategic areas of Small-scale drug and biologics production facilities will health innovation (see Figure 728, page 28). National and encourage local industry to participate in new market international networks will be built to ensure world-class segments such as biosimilars. These facilities will also discovery and development. be critical platforms for inbound technology transfers, leveraging international expertise and catalysing private- sector investments. The Bio-economy Strategy 27 World Health Organisation. 2012. Report of the Consultative Expert Working Group on Research and Development: Financing and Coordination. A65/24. 27 28 Draft Health Innovation Strategy of the Department of Science and Technology. The Health Sector and the Bio-economy (continued) New or improved New New or New Human Environmental therapeutics vaccines improved medical health determinants and drug and other diagnostics devices behaviour of health delivery biologicals systems Translational Architecture (ICTs, Knowledge Management, Modelling, Advanced Statistical Analysis) Development Discovery Dissemination Product Development Cycle Market access Technology Capacities and Technology Decision / impact and knowledge capabilities development support monitoring transfer Build the Health Innovation System Figure 7: Strategic interventions to build the health innovation system

5.4.1 Develop improved therapeutics and drug Clear policy guidelines need to be articulated to guide delivery systems to address priority diseases research and development of new treatments such as gene, stem-cell and tissue therapies. A genomic database Specific priority diseases will be identified in line with and biorepository, together with clear policies on genomic the Department of Health’s programme of action and in sovereignty, are essential for South Africa to capitalise terms of how these diseases affect the Southern African on this opportunity. Resources for research need to be Development Community region. Virtual networks will be strategically guided to ensure that South Africa’s genomic created and strengthened to ensure that the capabilities wealth benefits the country. of institutions are harnessed and expanded. Strategic health innovation partnerships should be established to

5.4.2 Develop new and improved vaccines and provide a coordinating function for Medical Research biologics Council networks. South Africa’s vaccine development and biomarker The full value chain for drug design will be addressed, expertise, especially in HIV and TB vaccines, should be Department of Science and Technology from discovery to new delivery systems (including strengthened by establishing networks. nanoparticles), while the necessary infrastructure, such as preclinical testing facilities, will be established. It is Given the increase in chronic diseases and the opportunities important that the validation of traditional medicines for technology transfer and knowledge pools, a private- is included, using the indigenous knowledge system public partnership to develop therapeutic biologics should bioprospecting and product development platform. A be considered. Considerable investments in bioprocessing rigorous validation system for traditional medicine claims technology platforms (by local science councils and should be developed in conjunction with the Department universities) could be leveraged to attract private-sector of Health’s Registrar of Medicine. investments and anchor a formidable biologics public- private partnership. Investments in the emerging global South Africa’s untapped rich human genetic resources biosimilars industry will allow South Africa to skip several 28 present a comparative advantage for developing therapies. stages of development. gy gy gy lo lo lo no er no er no er ch sf ch sf ch sf Te ran T Te ran T Te ran T Pre-clinical Clinical Full-scale Supply Research Development Distribution toxicology trials manufacturing chain Universities Science Councils (CSIR, ARC, MRC) Small biotech companies Biovac, OBP, ARC-OVI, Deltamune Areas that need optimisation CROs Figure 8: South African Vaccines and Biologicals Value Chain Players

5.4.3 Develop improved diagnostics 5.4.6 Establish pharmaceutical manufacturing Robust, rapid diagnostics are needed particularly in South Africa needs to grow a pharmaceutical manufacturing resource-poor areas to enable healthcare providers to sector. This will include the local manufacturing of generic diagnose HIV, TB and other high-burden diseases at and new drugs, and establishing facilities to encourage the point of care. Regular testing of these diseases is the industrial development of biologics and diagnostics. essential, and this has created an opportunity to build The Department of Science and Technology will create the this industry further. necessary enabling environment for local manufacturing in partnership with other departments such as Trade and Government has helped establish a number of companies Industry, Economic Development, and Health. Specific involved in the manufacturing of diagnostics. In addition, a technology parks to help achieve this objective will be number of research institutions are developing improved supported. diagnostics. A more concerted and coordinated effort is needed to strengthen capabilities and expertise. 5.5 Governance and coordination To provide an enabling environment for health innovation

5.4.4 Develop improved medical devices in South Africa, key stakeholders – including government, A large portion of South Africa’s medical device innovation industry and academia – should work together in a structure occurs in established private firms (bearing in mind that that oversees the implementation and direction of this between 80% and 90% of products consumed in South strategy. Collaboration among South African researchers Africa are imported). This innovation generally falls within is essential to build the country’s health innovation system. the existing products and services that the business Strategic international partnerships, including multinational provides, and addresses a recognised market need. companies, also need to be pursued. A specific health South Africa has a strong history of developing medical innovation structure should not only guide the allocation devices, such as the CAT scan. Innovations in this field of resources, but should also monitor progress and need to be further supported and harnessed. recommend new initiatives.

5.6 Impact The Bio-economy Strategy

5.4.5 Strengthen clinical research and development capabilities Successfully implementing this strategy will fundamentally Owing to South Africa’s high disease burdens, multinational transform the local industry and create new niche sectors companies and international clinical research organisations such as biosimilars. The strategy’s interventions will conduct local clinical trials using South African candidates. also promote clinical development and help emerging However, they do this without building local capabilities. technologies become globally competitive. To develop its therapeutics, the country needs to revitalise its clinical research, curtail high costs and enable In 2009, the value of the South African pharmaceutical commercialisation. industry was estimated at R22,6 billion, with R14,4 billion 29 The Health Sector and the Bio-economy (continued) for direct imports at factory prices. This figure is increasing New investments built on historic capabilities indicate at 10% per year, outstripping inflation. The strategy aims that short-term returns are likely to be positive. An import to replace up to 25% of current imports within a decade replacement target of 20% or more (R400 million) represents of implementation. This translates to R3,6 billion per an attractive investment case. year (for import replacement) or R6,25 billion (for total industry) at current prices. This strategy aims to renew current infrastructure, thus providing opportunities for new capital formation. More Savings on imports and industrial expansion will only importantly, strengthening local therapeutic manufacturing occur in the long term but, once achieved, there will be capabilities will help achieve public health goals and real economic gains for the country. This will help reduce improve the quality of life for all South Africans. the trade deficit, increase highly technical, sustainable jobs and further investments in innovation, as well as The impact can also be measured through the number promote the local industry’s global competitiveness, of publications and patents, as well as the regulatory earning it export income. approval of health products. As regional and international partnerships and technology transfers are important drivers The human vaccine sector is relatively small compared of the health sector, these will be measured on a regular to the pharmaceutical sector. However, it provides a basis. The actual impact of growth in the health sector will compelling investment case because it ensures security ultimately be measured through the improved quality of life of supply to achieve public health outcomes and is likely of all South Africans and an increase in life expectancy as to generate economic returns due to import replacement. a result of a reduction in various mortality rates. Department of Science and Technology 30 6 . THE INDUSTRIAL AND ENVIRONMENTAL SECTOR AND THE BIO-ECONOMY

6.1 Strategic objective energy sectors. These are also applied in mining and resource extraction, as well as water treatment, waste The Bio-economy Strategy’s key objectives with regard minimisation and energy production. to industry and the environment are to prioritise and support research, development and innovation in biological The industrial bio-economy focuses on two areas – industry processes for the production of goods and services, while and sustainable environmental management (Figure 9). enhancing water and waste-management practices to The former involves bio-based chemicals, biomaterials support a green economy. and bioenergy. The latter involves water and waste as means of providing environmental sustainability for the

6.2 Strengths and opportunities industrial bio-economy. Enabling technologies were The industrial bio-economy uses micro-organisms and emphasised to demonstrate the significance of this area, other biologics (such as enzymes) as catalysts in the as they underpin the activities required for the industrial manufacture of biobased products in the chemicals, food, bio-economy. feed, healthcare, detergents, pulp and paper, textiles and Sustainable environmental Industrial applications management Bio-based Bio-materials Bio-energy Water Waste chemicals Bulk and speciality Biodiesel chemicals Bioleaching Bioremediation Biocomposites Bio-ethanol Biocatalysts of domestic Biometallurgy and industrial Biopolymers Biobutanol Biocontrol wastewater Biosorption products Biogas Additives Enabling technologies The Bio-economy Strategy Synthetic and structural biology Functional genomics Figure 9: Relevant thematic areas of focus for the industrial bio-economy 31 The Industrial and Environmental Sector and the Bio-economy (continued) Opportunities exist for an industrial bioeconomy in various The Biofuels Industrial Strategy articulated a two per cent sectors. penetration level of biofuels in the national supply liquid fuel within five years of its publication. This is equivalent Cross-cutting to 400 million litres per annum31. South Africa will need The industrial bio-economy is cross-cutting and therefore to progressively source second-generation biofuels (from applicable to various sectors including the chemicals, non-food lignin and cellulose in woody biomass and sugar mining, health, agriculture, food, feed, pulp, paper, textiles bagasse) in place of first-generation biofuels (from simple, and energy sectors. edible carbohydrates such as sugar and starch). Chemicals 6.3 Challenges and gaps The chemicals industry is an important part of the industrial The National Biotechnology Strategy did not invest bio-economy. Renewable bio-based feedstock is used heavily in the industrial sector. As a result, some of the to produce chemicals. In 2010, this industry contributed interventions identified in the Bio-economy Strategy will between 4% and 5% to South Africa’s GDP.29 Globally, it have no prior infrastructure or dedicated programmes. is estimated that more than 20% of all chemicals will be These interventions will encompass systems, programmes produced using green technologies by 2020 and 50% by and institutions. There are existing mature industries in 2050.30 This trend is driven by the need to reduce costs South Africa that are linked to the petrochemical, mining, and create ecologically sustainable industries. beverages, and waste-water remediation sectors. However, there are sectors that are still in their infancy, including Mature industries the biofuels and bio-based chemicals and materials The revitalisation of mature industries (such as sugar sectors. What is required is a clear and coherent role for cane, pulp, paper and textiles) and resource-dependent the industrial aspects of the bio-economy, so that it can industries (such as mining and the petro-chemical sector) contribute to these sectors, demonstrating its value, and need to be explored. These require eco-efficiency and ensuring that optimal and effective utilisation takes place. innovation in a low-carbon future. As more emphasis is placed on environmental sustainability, Sustainable industries the waste output from industrial activities cannot be viewed in isolation. There should be a strong focus on the link There is increasing demand and preference for sustainable between environmental sustainability and the industrial renewable biological resources and bioprocesses as bio-economy. South Africa is a water-scarce country, mechanisms for new and revitalised industries. There is with water availability projected to decrease to less than opportunity to decouple industrial growth from environmental 1 000 cubic metres per person per year by 202532. This degradation through more sustainable production methods will have a major effect on agriculture in particular. The using industrial-scale biotechnology. agricultural sector needs to become more water-efficient and use crops that are more water-wise. South Africa currently imports all its enzyme requirements. Developing local manufacturing in this area will decrease reliance on imports. Enzymes are a strategic area of interest as they help heavy industries become more environmentally sustainable by reducing water usage, energy consumption, greenhouse gas emissions and other toxic wastes. The need to respond to global challenges such as climate change, energy and food security in the context of limited Department of Science and Technology water supplies and productive land and the need to reduce carbon emissions should be seen as an opportunity. Economies of scale in the biofuels industry can drive scarce skills development (particularly in engineering and production), and research and development in fermentation technology and crop improvement. 29 Department of Trade and Industry. Chemicals and Plastics. Accessed 8 November 2012. URL: http://www.thedti.gov.za/trade_investment/chemicals.jsp 30 The Bioeconomy to 2030: Designing a Policy Agenda. Organisation for Economic Cooperation and Development (OECD). 2009. 31 Biofuels Industrial Strategy. Department of Minerals and Energy. 2007. 32 32 National Planning Commission (NPC), (2012), Chapter 7 of the National Development Plan – Vision for 2030 (Positioning South Africa in the world). It is expected that the population will continue to grow, engineering, which is critical in ensuring scale-up which will require an increase in the use of fertilisers technologies and bridging the gap from scientific to meet demands in food supply. This will negatively application to industrial feasibility. affect water quality by loading nitrogen in ecosystems, which poses a threat to ecosystems and biodiversity.

6.4 Strategic interventions Biocontrol products are becoming increasingly important, as biopesticides, plant growth regulators and biofertilisers In a constrained environment, the industrial biotechnology benefit the environment by reducing the use of traditional sector will be competing with health and agricultural chemical pesticides and fertilisers. Research, development biotechnology for resources. The drive for research, and innovation in waste-water treatment and biofertilisers development and innovation should therefore focus on will provide important linkages between the industrial enhancing existing competencies and filling gaps to create bio-economy and the agricultural sector. a viable system. The following interventions constitute two strategic thrusts. The first involves interventions of The following challenges and gaps are important to take strengthening and preserving activities that had taken note of for an industrial bio-economy: place during the implementation plan of the National • The industrial bio-economy deals with water security, Biotechnology Strategy. The second focuses on areas biodiversity, ecosystem services, waste minimisation, where development is required, as well as on unlocking and greening the economy. The challenge is to ensure opportunities where no previous interventions have occurred. that biological application has a role to play in providing solutions or alternatives to these underlying areas. 6.4.1 Strategic industrial biotechnology • High fossil-fuel dependency and use results in a programmes negative balance of trade owing to importation and Strategic science programmes should be initiated so that detrimental environmental impacts. A sustainable industry-relevant products can be developed to enhance biofuels industry should avoid agricultural land used production efficiency, product quality and the industry’s for food production, or it may have a negative impact competitiveness.These programmes should build on on food security, cause a loss in biodiversity and existing initiatives such as biopharming, biocatalysis, increase greenhouse gas emissions due to land use biocomposites and mineral leaching. and land cover change. The production of biofuels should move away from first-generation technologies The key research, development and innovation areas that to second and third-generation technologies, which will stimulate the industrial bio-economy are microbial industrial biotechnology is well positioned to take strain development for important bio-based chemicals, host advantage of. expression systems for enzyme production, fermentation • There needs to be alignment with the National Envi- technologies (solid state and submerged), genetic and ronmental Management Act, 1998, which is supported metabolic engineering, high throughput biology, bio- through various Acts relevant for the bio-economy, informatics and downstream recovery processes. The including Acts on waste (2008), biodiversity (2004), industrial bio-economy sector will benefit from other protected areas (2004) and air quality (2004).33 national priorities, such as healthcare and food security. • There needs to be alignment with the Industrial The sector should contribute to developments in active Policy Action Plan and the Advanced Manufacturing pharmaceutical ingredients manufacturing and vaccines, the Technology Strategy, which aim to create a greener maturation of which will accelerate demand for upstream economy. Renewable materials, such as natural inputs. In addition, the industrial bio-economy should fibre-reinforced composites, present an opportunity work with the agricultural sector to convert agriculture to create a bio-economy, as these biocomposites can residues, such as lignocellulose feedstock or other energy be used in the automobile, aerospace, packaging and crops, into biofuels. building industries.

6.4.2 Strengthen and develop biomanufacturing • The industrial bio-economy will require significant capacity and capabilities investment as pilot and demonstration-scale units have long lead times and therefore high commercial As large-scale biomanufacturing activity in South Africa The Bio-economy Strategy risks. There is insufficient research and development is currently very limited, inward technology transfer from funding from the private sector. international companies and research groups, as well • There is insufficient human capacity and limited as supporting development initiatives that adapt such cross-discipline collaboration in the sciences and technologies for local use may be necessary. Sustainable 33 Department of Environmental Affairs (DEA), 2012, National Environmental Management Act, available at http://www.environment.co.za/legislation-law/nema-south- 33 africa-national-environmental-management-act-legislation-and-environmental-acts.html. Accessed 23 November 2012. The Industrial and Environmental Sector and the Bio-economy (continued) Expression host Molecular biology Directed evolution Stabilised or Microbiology Fermentation Immobilisation immobilised Bioinformatics optimisation SDM biocatalysts Enzymology HTS SMMEs, Industry, Universities Research Councils communities Production and Discovery Improvement Application Product Development Route selection Process integration Organic chemistry Reaction Reaction Scale up and Reaction selection optimisation engineering market sample Why Biocatalysis? • Leather (depilation) There is an increasing imperative, based on climate • Paper (pulping) change concerns and limits to non-renewable resources, • Detergents (many washing powders) to combine chemical markets with agricultural feedstocks • Cosmetics and fragrances (ambrox) to create a significant bio-economy that will change the way that we make things. Industrial Biotechnology • Biofuels (biodiesel, bioethanol) is predicted to be a major contributor to this shift, and • Renewable chemicals (fermentable sugars) Biocatalysis is a key capability. • Animal feeds (pre-digestion) • Polymers (polyesters) Biocatalysis provides • Clean water (bioremediation, e.g. peroxides i) fewer waste products, ii) lower carbon footprint, iii) removal in textile industry) less use of toxic solvents, iv) utilisation of renewable feed stocks and v) access to new chemicals not achieved by traditional methods. What are the products from Biocatalysis? • Commodity chemicals (e.g. acrylamide as used in mining) • Pharmaceuticals (e.g. anti-cholesterol drug Lipitor, antibiotics such as ampicillin) • Food additives (flavours, e.g. menthol) • Food processing (dough, beer, juice) Department of Science and Technology • Sugars for food, beverages and medicine (e.g. glucose, fructose syrups) • Low-calorie sweeteners (aspartame) • Diagnostics (e.g. glucose monitoring home kits for diabetics) • Textiles (faded Jeans, fibre processing) Figure 10: Biocatalysis 34 bioprospecting for unique industrial biocatalysts for application in any of a number of bioprocesses may be an area for initial focus. Areas of possible application include the chemical and pharmaceutical industries and biorefineries where biocatalysts can potentially green the processes by replacing synthetic catalysts to give both economic and environmental benefits.

6.4.3 Strengthen local bioprocessing capabilities The production of biological products has to be scaled up to test economic feasibility. Scaling up bioproduction from small-scale systems to large plants is costly and difficult. Because dedicated biotechnology firms are limited by a lack of capital and engineering expertise for large-scale production and distribution, they should collaborate closely with large industrial firms or use government subsidies to pilot-test biological processes. Pilot-scale infrastructure to support bioprocessing is available at the Council for Scientific and Industrial Research (CSIR) and the Technology Innovation Agency’s Umbogintwini bioprocessing platform, but these are underutilised. Access to these platforms will be expanded to allow entrepreneurs to test their production systems. Research and development initiatives should enable the development of expression systems and extraction processes to increase South Africa’s biomanufacturing capability. Bioprocessing capabilities need to be strengthened where there are existing initiatives, but need to go beyond the

6.4.5 Strengthen wastewater research, current platforms. Collaboration and partnerships between development and innovation industry and academia that can address competence hurdles and knowledge spillovers, and alleviate the risks As it has a limited water supply, South Africa should of transforming knowledge into commercial products, improve efficiency in how it uses municipal and industrial should be encouraged and will be supported. wastewater. The country has world-class expertise in wastewater research at universities, research councils

6.4.4 Develop integrated biorefineries from bio- and large industrial players. based feedstocks The Department of Science and Technology will facilitate In a low-carbon future, biorefineries (comparable to collaboration to generate knowledge, prevent duplication of petroleum refineries) will use renewable biomass to work and enhance value addition. Pilot and demonstration- produce bioenergy, biomaterials and bio-based chemicals. scale wastewater treatment facilities need to be developed An industrial bio-economy should develop an integrated to test and market larger-scale treatment facilities. biorefinery concept for the co-production of food and Additionally, innovation in water pollution should focus non-food (feed, chemicals, materials and energy) to on bioassays and biomarkers. facilitate the transition from fossil resources to renewable bioresources.

6.4.6 Strengthen solid waste research, development and innovation An integrated biorefinery will provide cost and energy- efficient ways to make optimal use of biomass for several The Bio-economy Strategy Economic development has contributed to an increase in purposes. Biomass could be used as building blocks for industrial, mining and power-generation waste. Electronic the generation of high-value products such as proteins, waste is also starting to accumulate in landfill sites. fine chemicals, carbohydrates and oils, which create opportunities for a viable industrial bio-economy. 35 The Industrial and Environmental Sector and the Bio-economy (continued) The following biological applications aim to minimise waste 6.5 Impact generation and create an effective waste-management Owing to the scale of investments needed to establish system: manufacturing facilities, large sugar and chemical companies • closed-loop systems of environmental application are likely to dominate the future industrial bio-economy using microorganisms; landscape. A few mid-tier companies in enzyme production, • harvesting of landfill gas for heating, electricity and biocontrol and niche bioproducts are expected to emerge as an alternative fuel source; from the consolidation of current dedicated biotechnology • beneficiation of biomass waste for energy recovery firms. Other big industrial players such as food processors, and generation (waste to energy); mining companies and water utilities will become important • alternative use of wastewater streams for other clients for bioproducts. Private-sector players will be an products; and important source of research and development funding. • reuse and recycling of electronic waste, and recovery of The following are significant impact areas for the industrial its relevant components. Metals from electronic waste bio-economy: can be recovered by combining hydrometallurgical • enhanced global and local competitiveness of industries; (chemical) processes and bioprocesses (biometallurgy, bioleaching and biosorption). • ecologically efficient utilisation of renewable materials; • minimised dependency on fossil fuels;

6.4.7 Synergies with enabling and emerging • reduced production of greenhouse gases and positive technologies contribution to a green economy; The industrial bio-economy should synergise with converging • expanded agricultural production for feedstock on research in order to unlock opportunities (which include underutilised arable land will provide jobs in rural areas areas of synthetic and structural biology, functional genomics and improve spatial economic development patterns and nanotechnology). Furthermore, untapped areas such as industrial infrastructure – such as bioprocessing as marine biotechnology can be beneficially harnessed. plants and logistics platforms – is located closer to sources of production; and

6.4.8 Establish an advisory committee for industrial • a thriving biofuels industry will support the development bio-economy of the non-fuel industrial bio-economy. A stakeholder advisory committee will be established to guide and monitor the industrial/environmental aspect of The impact will be measured via the revenues/sales of the Bio-economy Strategy. products, processes and services, as well as the number of new bio-innovation industries created. The role of technology transfer, collaborations and partnerships will also provide an indication of growth within the industrial component of the bio-economy. Department of Science and Technology 36 7. The Way Forward and Conclusions The development of the South African economy has The Department of Science and Technology, as the lead historically been driven by exporting natural resources, agent of this strategy, will continue to engage with line with minimal beneficiation. This is gradually changing. departments to promote cooperation, facilitate the strategy’s Other developing economies have been successfully broad implementation, and ensure synergy, alignment transformed from resource-based to knowledge-based and better coordination of activities. The Department economies, and South Africa seeks to join this community. will drive a consultative process to define the roles and It is broadly recognised that such a transformation needs responsibilities of various government departments, to be underpinned by the development of a highly skilled agencies and instruments in implementing the strategy. labour force, investment in technology infrastructure and the growth of high-technology industries.34 Ultimately, this strategy will be carried out through the development and application of a detailed implementation This document has therefore outlined the approach for framework for each of the three identified thematic areas. implementing a knowledge-based bio-economy in South Such plans should embody the principles established in Africa. The 2001 National Biotechnology Strategy helped this strategic document, and form a convincing, detailed set the agenda for biotechnology development in South vision for the continuing development of South Africa’s Africa. The Bio-economy Strategy aims to build on the bio-economy. achievements of the former strategy, incorporating the lessons learnt and developing initiatives to address future challenges. This new strategy provides a high-level framework to guide biosciences research and innovation investments, as well as decision-making. All the relevant sectors need to support and commit to the strategy due to the multi- sectoral and long-term nature of bio-based developments. Although the Department of Science and Technology is a key stakeholder, the Bio-economy Strategy recognises that bio-economy outcomes are far beyond the mandate of the Department alone. Science and technology, as applied to agriculture, human health and manufacturing, among others, requires guidance and support from the relevant departments and industry sectors. This highlights the need to formulate a single, coherent vision for the bio-economy in South Africa, which should drive policy development. Indicators – presented in Annexure 1 – will The Bio-economy Strategy allow progress towards the objective to be measured, and a comprehensive evaluation will be conducted after five years to guide this highly dynamic field of enterprise. 37 34 Blankley W and Booyens I. 2010. Building a Knowledge Economy in South Africa. in South African Journal of Science. 106, pp 1–6. Annexure 1: Indicators The main indicators relevant for a knowledge-based bio-economy include the following: • foreign direct investment (as a percentage of GDP); • gross fixed capital formation (as a percentage of GDP); • manufacturing trade balance (as a percentage of total trade); • trade balance of high-technology manufacturing goods (in R millions); and • technology balance of payments. The table below highlights quantitative output indicators that will be used to track and monitor the Bio-economy Strategy.35 Detailed implementation plans and value propositions for specific sectors and initiatives will help refine targets in the short, medium and long term. To achieve the outputs outlined in the table, policy instruments in different state organs related to education, industrial development, demand-side, fiscal and regulation policies need to be well coordinated. Indicators of critical factors Critical factors of the strategy Output indicators • Strengthen basic research excellence. • Number of publications and citations in high- impact journals per capita. Knowledge base and • Promote industry-oriented research programmes. • Size of bio-innovation workforce as percentage • Facilitate knowledge flow between disciplines. of science and technology workforce. • Develop next-generation technologies. • Number of research chairs, centres of human resources excellence, technology platforms and • Develop human capital for the bio-economy. multidisciplinary research and development programmes supported. • Bio-economy research and development as a percentage of GERD. • Technology development infrastructure to • Number of patents granted. facilitate the translation of research and Knowledge • Number of collaborative product development development outputs into products and partnerships. services. transmission and • Availability of technology development and • Strategic development and innovation assimilation infrastructure. programmes. application • Number of technology-transfer transactions. • Assimilation and adoption of bio-innovations • Availability of incubation facilities of bio- for new industry applications. innovation firms. • Strengthen economic sectors (manufacturing, • Number of regulatory approvals for health agriculture, health and environmental) products. Market exploiting bio-innovations. • Revenues/sales of life science products, • Through enabling legislation, facilitate processes and services. introduction of new bioproducts. • Number of field trials with GMO crops. • Enable creation of bio-innovation firms. • Number of bio-innovation firms, including • Strengthen local manufacturing capability of dedicated bio-innovation firms by sector. Department of Science and Technology bioproducts. • Venture capital invested in bio-innovation • Attract foreign direct investment in bio- firms. economy sectors. • Technology balance of payment of bio- innovation outputs. Industry • Alignment of fiscal policy instruments to encourage innovation. • Number of joint ventures and strategic • Encourage investment in research and alliances between local bio-innovation firms development. and international partners. • Improve competitiveness of industry. • Multinational corporations in bio-economy sectors locating research and development • Exploit regional potentials. facilities locally. • Types of biotechnology used by firms. 38 35 OECD Data: Indicators for Benchmarking Biotechnology Innovation Policies. Accessed April 2013. URL: http://www.oecd.org/sti/innovationinsciencetechnologyandindustry/37450279.pdf Annexure 2: List of Selected Current Initiatives and Platforms South African Malaria Initiative, 2006 – An integrated Biodesign Initiative – Integrates synthetic biology, research and development programme to develop new structural biology, systems biology and functional genomics. tools to improve malaria prevention and control. Develops human capital and strengthens basic research. South African HIV and Aids Research Programme (South Public Understanding of Biotechnology, 2003 – Creates African Aids Vaccine Initiative, 1999), 2009 – Focuses awareness and educates the public about biotechnology. on basic research to develop tools for the prevention, diagnosis and treatment of HIV/Aids. Nuclear Technologies in Medicine and the Biosciences Bioinformatics and Functional Genomics Programme Initiative, 2009 – Research and development on nuclear (National Bioinformatics Network, 2003), 2009 – Provides technologies in medicines and biosciences. bursaries and grants to support human capital development and knowledge generation. Biopharming Programme, 2010 – Technology optimisation Biosafety Platform, 2008 – Provides regulatory guidance of the plant expression system to produce biologics and support for product development in third-generation (vaccines). Technology transfer, infrastructure development plant and animal biotechnologies. and human capital development. IKS Bioprospecting and Product Development Platform, Preclinical Drug Development Platform – Upgrades 2011 – Uses biodiversity, indigenous knowledge systems infrastructure to provide accredited (current good and modern science tools to develop African traditional manufacturing and laboratory practices) facilities for medicines, nutraceuticals and cosmeceuticals. preclinical development of therapeutics. Centre for Proteomics and Genomics Research, 2007 – Metabolomics Platform, 2006 – Studies metabolites and Facilitates access to state-of-the-art capital-intense genomics enables screening for toxicity, monitoring and treatment of and proteomics equipment. It has a hybrid mandate to patients. Could facilitate development of diagnostic tools offer public benefits as well as commercial services. and therapeutics. National Genomics Platform, 2007 – Provides a high- Metagenomics Platform, 2007 – Screens extremophiles throughput genomics research facility to both South Africa and their metagenomes (believed to have evolved specialist and international clients, and facilitates generation of functions to cope with survival under extreme conditions) knowledge that will lead to new ventures and companies. to commercialise enzymes. Novel Vaccine Platform, 2007 – Develops general-purpose Process and Product Incubator (Bioprocessing vaccine delivery technology, based on displaying antigenic Platform), 2005 – Addresses the needs (and shortage) of peptides on the surface of African horse sickness core bio-entrepreneurs and bioprocess development specialists proteins to address the shortcomings of current animal by providing the infrastructure and a wide range of expertise vaccines. needed to develop innovative products. CSIR Protein Expression System, 2009 – Facilitates Drug Discovery and Development (H-3D), 2010 – human capital development and advances cutting-edge Addresses the lack of critical modern pharmaceutical technologies and products (protein expression and industry skills in the field of drug discovery. It mimics a purification, fermentation and process development, and drug discovery centre that bridges the gap between basic glycan profiling and analysis). research and clinical studies. Drug Delivery Platform, 2009 – Incubates the development Institute of Diagnostic Research, 2005 – Researches and of several patented and patent-pending drug delivery optimises affordable, rapid diagnostic tests for infectious technologies (includes devices) with commercial value in diseases. the biopharmaceutical industry. The Bio-economy Strategy 39 Annexures (continued) Annexure 3: National Biotechnology Strategy Review Proposed objectives and Comment on status quo Challenges and threats interventions Develop a coordinated Created the National Biotechnology Research institutions work in biotechnology strategy. Advisory Council. silos. Establish a biotechnology Created three biotechnology innovation Too much competition and too advisory council. centres, one national innovation centre in little collaboration. plant biotechnology and a bio-informatics Establish biotechnology network. These were merged into the Lack of alignment and innovation centres. Technology Innovation Agency. coordination of national system of innovation instruments. Develop and retain appropriate Currently improving postdoctoral Inappropriately skilled and human resources for fellowships through various government inadequate science and biotechnology. instruments, mainly the National technology workforce. Research Foundation. Establish career opportunities. Shortage of entrepreneurial skills Created dedicated biotechnology firms, and technology transfer skills and Fast-track resource needs of mostly from reorganised university/ mechanisms. biotechnology innovation centres. research council-based projects. As a result, not many new jobs were created. Poor capacity to absorb science Improve postdoctoral fellowship and technology graduates. system. Biotechnology innovation centres, together with the Innovation High level of brain drain. Promote curriculum development. Fund, developed critical skills in commercialisation and intellectual Absence of national institutes property management. dedicated to biosciences. Not much progress has been made in Unemployment among life influencing curriculum review, except for science postgraduates. instances where individual biotechnology innovation centres designed and delivered specific content with local and international partners. Encourage links between large This has largely failed because of the Lack of research and companies and biotechnology innovation chasm and because there development and local innovation centres. was very little in the research and manufacturing capabilities to development pipeline to attract interest attract investment from large Department of Trade and Industry from large companies. companies. to encourage large company investments in biotechnology The Biovac Institute, a public-private Pseudo-dedicated biotechnology innovation centres. partnership, has close relationships with firms and technology platforms biotechnology innovation centres. unable to generate revenue. Multinational corporations became involved in training postgraduate students. Department of Science and Technology 40 Proposed objectives and Comment on status quo Challenges and threats interventions Create biotechnology industry Very little evidence of new therapeutics Limited commercialisation of in sectors that are aligned with developed or health technology products and services from national imperatives, market assimilated for local innovation and defined biotechnology firms and/ demand and regional expertise. production. or platforms. Address the most pressing Food security issues are being addressed Insufficient uptake of technology human health issues in South due to the ARC’s historical strengths. solutions. Africa. Limited investments in animal breeding Lack of appropriate and Improve food security and (Nguni cattle) were quite successful, but accredited technology nutrition. the number and variety of animals too infrastructure to scale up. small. Improve plant production in Marketing and communication a changing environment and There has not been significant investment strategies to promote South reduce the impact of agriculture in industrial biotechnology. In fact, the African innovation for foreign on the environment. country lost some important industrial direct investment. capacity. Improve animal health and productivity. Support sustainable industrial development using biotechnology. Create an enabling legislative The GMO Executive Council, the Legislation and regulations for framework to develop and Bioprospecting Expert Committee and the GMO are not harmonised. commercialise biotechnology. Department of Science and Technology continue to support legislative reform. High regulatory barriers for Review existing legislation with product approval. implications for biotechnology Chapter 8 of the National Health Act and propose new legislation or needs to be amended to address issues Technology develops ahead of amendments where necessary. around genetic research. policy, leading to delays in novel product approval. Update the Plant Breeders’ The cost implications associated with Rights Act, 1976, to include DNA patent examinations impede intellectual Global markets are inaccessible fingerprinting. property examination at the Companies due to weak networks and policy and Intellectual Property Commission. instruments. Consider developing legislation The Department of Science and to protect the rights of animal Technology continues to support capacity- Unable to use knowledge pools breeders. development patent examination. effectively. Introduce and implement a Provisions that allow research on Strategic intellectual property “search and examine” capacity pharmaceutical drugs under protection management is still a challenge. in South African Patent and (Roche-Bolar) are not in place in the Trademark Office as soon as country’s intellectual property law. Lack of Roche-Bolar equivalent possible. has impeded South Africa’s ability Benefit-sharing provisions in the to take advantage of expiring Introduce and implement the Intellectual Property Rights from Publicly patents to generate generic equivalent of the Roche-Bolar Financed Research and Development Act drugs. provision (which allows research delineate intellectual property rights for on pharmaceutical drugs under inventors. Lack of clear regulations for the protection) as soon as possible. approval of biosimilars. Mandatory offices of technology transfer Provide uniform guidelines for provide capacity to implement the science councils, universities Intellectual Property Rights from Publicly and universities of technology Financed Research and Development on intellectual property rights for Act. The Bio-economy Strategy inventors. Provide institutional capacity to implement legislation. 41 Annexures (continued) Proposed objectives and Comment on status quo Challenges and threats interventions Create an enabling bilateral The Department of International Relations Incentives to attract and multilateral framework and Cooperation has established multinational corporations to for the development and strategic relationships with several establish research, technology commercialisation of countries and institutions, but South development and manufacturing biotechnology. Africa lacks a national strategic template capabilities in South Africa have to ensure maximum value is leveraged not yielded desired outcomes. The government should ensure and extracted from these relationships. that full consultation takes place Engagements tend to be limited to with relevant departments before institutions. signing international, multinational and bilateral agreements. Employ international expertise Prioritised government-to-government Technology transfer and and technologies to address bilateral agreement. assimilation has been slow and priority issues. Supported institutional collaborations in limited by lack of appropriate life-science innovation. competence and infrastructure. Engage strategic partners for the platforms. South African Research Chair Initiative Uptake of mobility funds for programmes promote import of expertise. experts and students has been Programme partners. slow, probably due to marketing Department of Home Affairs facilitating and communication challenges. Bilateral agreements. expertise import. Millennium Africa Programme. Sandwich MSc and PhD programmes in place. Modalities to facilitate mobility of experts in place. Provide sustainable funding for Government-backed venture capital has Insufficient public and the Biotechnology Strategy. not materialised, possibly because there private funding for research were not enough opportunities to create commercialisation. Provide government venture a viable portfolio and the skills base capital. was low. The biotechnology innovation Lack of funding for capital- centres evolved to play this role through intensive technology Create liquidity in venture capital their funding instruments. infrastructure. markets and the valuation of intellectual property. Venture capital liquidity remains limited. Delays in developing local There is no discernible activity in manufacturing capabilities. Implement supply-side measures intellectual property trade, partly owing to support private-sector research to the misconception that it will deprive Inability to increase absorptive and development. the country of intellectual property and capacity of the system and create research and development excellence, new jobs. and partly owing to local researchers protecting their funding interests. South Africa remains a technology importer with a large Research and development tax negative technology balance of incentives were developed, but were payments. not appropriately structured for the biotechnology sector and local dedicated Mismatch in the risk and return of biotechnology firms. They did not capital budget investment. generate revenue. Department of Science and Technology Other supply-side measures have not made much progress. 42 Proposed objectives and Comment on status quo Challenges and threats interventions Address ethical considerations Legislative reforms relating to genetic Illegal bioprospecting and relating to biotechnology. sovereignty and material transfer are biopiracy of South African genetic under discussion. The Department of resources. Develop a national strategy to Science and Technology chairs the address ethical issues associated working group. Protecting the public. with biotechnology. Published an ethical and legal guidelines Promoting ethics. manual in 2006, with the endorsement of the Department of Science and Technology. The Department of Science and Technology is a member of the National Research Ethics Council and Animal Research Ethics working group. Established a biosafety platform to coordinate research in ethics and biosafety. The GMO directorate of the Department of Agriculture, Forestry and Fisheries and Medicines Control Council are the custodians of ethical issues. Promote a clear understanding of Established Public Understanding of Largely targeted at scholars the potential of biotechnology. Biotechnology programme, managed by and insufficiently focused on the South African Agency for Science consumers. Articulate a single vision of and Technology Advancement. The biotechnology. programme has promoted understanding Media do not always report and empowered scholars, journalists and correctly on biotechnology issues. Provide public biotechnology the public to make informed choices on education. biotechnology issues. The Bio-economy Strategy 43 Acknowledgements The Department of Science and Technology would like to thank all the experts who contributed to the development and review of this strategy. Photo credits Council for Scientific and Industrial Research (CSIR), Kulima Integrated Development Solutions, Malachite Media, Shutterstock and 123rf. Department of Science and Technology 44 www.dst.gov.za ISBN number 978-1-919966-06-9