Business share of South Africa’s R&D funding falls to 29%
Businesses provided 29% of South Africa’s R&D funding in 2022/23, down from 41% a decade earlier, as a ministerial working group called for new incentives and less reliance on foreign funding.
In 2022/23, South African businesses contributed 29% of the country's research and development (R&D) spending, a significant decline from 41% in 2013/14, according to a ministerial working group. This shift in funding sources was highlighted after the United States withdrew federal funding from key South African research programs, exposing weaknesses in the country's science and innovation funding system.
The share of R&D funding from government sources increased from 43% to 51% during the same period, while international funding rose from 13% to 17%. The business sector's share of R&D expenditure also shrank from 46% to 36%. The report suggested that stronger domestic investment in R&D could support innovation, industrial development, and job creation while reducing South Africa's dependence on foreign funding.
The working group questioned the effectiveness of existing measures aimed at encouraging companies to invest in research, noting that administrative burdens and limited evidence of additionality undermined the impact of instruments such as the R&D tax incentive. The group recommended reforming the R&D tax incentive, exploring tax exemptions, and utilizing Special Economic Zones to stimulate investment.
They also suggested co-investment grants, innovation vouchers, pooled challenge funds, and concessional loans as potential incentives. The report emphasized the need for a holistic approach to innovation, including reforming incentives, addressing barriers to multinational R&D investment, and aligning research expenditure with industrial policy and company needs.
Written by urgent.news from IOL's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
