International Strategy to Develop Technology Capability in South Africa through the Clean Development Mechanism

Presentation at the Conference for Putting a Price on Carbon: Economic instruments to mitigate climate change inSouth Africa and other developing countries. University of Cape Town, South Africa, 23-24 March 2010

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International Strategy to Develop Technology Capability in South Africathrough the Clean Development Mechanism

Vuyani Lingela and Thomas Laemmer-Gamp

Department of Science and Technology, Private Bag X 894, Pretoria 0001, South AfricaTel: +27 12 843 6517, Fax: +27 86 681 0051, Email: Vuyani.Lingela@dst.gov.za

Abstract

Applying the outcomes of the national technology capability (NTC) model, this paperpresents an international strategy for South Africa to identify international strategicpartners and to develop strategic international partnerships to promote NTC using theClean Development Mechanism (CDM). This paper also shows that South Korea andGermany, two of the countries that have achieved high levels of NTC, as well aseconomic prosperity, present enormous potential for CDM cooperation with SouthAfrica. Furthermore, this paper suggests that cooperation with South Korea andGermany on CDM projects does not only present opportunities for South Africa toreduce greenhouse gas emissions, it also presents new opportunities for technologytransfer and innovation to enhance South Africa

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s technological capability to create anew renewable energy industrial cluster. By facilitating the creation of a newrenewable energy industry, the South African Government could help create morewealth and jobs in the country.

1. Introduction

In a recent study conducted by Lingela (2009a), he concluded that the diversity of theSouth African international science and technology (S&T) partnerships would notnecessarily lead directly to wealth generation, but that these partnerships have thepotential to promote South Africa

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s economic diplomacy. In the context of international S&T cooperation, this includes the following: promoting technologytransfer to and from South Africa; positively positioning the country in the worldthrough international S&T partnerships; and promoting friendly relations with partnercountries. The fact that some South African scientists are world leaders in theirresearch fields means that, when the need arises, the world can count on SouthAfrica

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s S&T expertise to mobilise resources globally to combat the spread of diseases, poverty and the dangers of global warming.The results presented in this study represent the first attempt to assess the objectivesand rationale for the S&T cooperation agreements concluded between South Africaand various partner countries from 1993 to 2009. The results indicated that theGovernment of South Africa and its partner countries have given the highest priority(44%) to the protection and ownership of intellectual property (IP) rights createdwithin the framework of the international S&T cooperation agreement. On the otherhand, the results show that, when the effect of population size and the number of researchers per country has been discounted, South Africa, together with Argentina,Romania, Poland, Hungary, Slovakia, Russia and Spain, have filed low numbers of patent applications to the United States Patent and Trademark Office (USPTO) per

Presentation at the Conference for Putting a Price on Carbon: Economic instruments to mitigate climate change inSouth Africa and other developing countries. University of Cape Town, South Africa, 23-24 March 2010

2thousand researches. The aforementioned countries represent 62% of the countriesreviewed in this study.It is clear from the text of the S&T agreements included in this study that SouthAfrica and its partner countries recognise the importance of IP in promotingknowledge production, technological innovation and industrial competitiveness. Thefact that commercialisation of research results and licensing of IP are given lowpriority (6%) in 17 agreements reviewed in this study may indicate inadequateattention to international technology transfer and innovation in South Africa

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sbilateral cooperation. It is in this context that South Africa

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s Ten Year InnovationPlan (Department of Science and Technology, 2008) aims to position the country tobecome a preferred destination for international S&T investment, by leveragingforeign direct investment through South Africa

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s extensive bilateral and multilateralnetworks. This requires strategic cooperation through a range of international andregional forums and established scientific protocols, as well as targeted initiativeswith other countries.This paper argues that the CDM of the United Nations Framework Convention onClimate Change (UNFCCC) does not only present opportunities for South Africa toreduce greenhouse gas emissions, but also presents new opportunities for technologytransfer and innovation to enhance South Africa

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s technological capability to create arenewable energy industrial cluster. In another study conducted by Lingela (2009b),he presented a methodology to determine and compare levels of technology capabilitybetween different countries or research institutions, universities and companies withina country. Applying the outcomes of this methodology, this paper presents a strategyfor South Africa to identify international strategic partners and to develop strategicinternational partnerships to promote national technology capability using the CDMmechanism.

2. National technology capability

Lingela (2009b) presented a model to determine and benchmark the levels of NTCinternationally. He defined NTC as the collective ability of the scientific, technical,engineering and managerial workforce in a country to use their skills and nationalresources, and to leverage international resources, to acquire and create technologiesfor the production of goods and services to meet national and global market needs.The NTC model applies the following three variables: (i) the number of patentapplications filed by residents to the United States Patent and Trademark Office; (ii)the number of papers published by residents in journals accredited by ThomsonReuters; and (iii) the number of researchers per million of the population per country.The NTC model was applied to determine and compare the following three aspects,between 33 member and non-member countries of the Organisation for EconomicCooperation and Development (OECD), presented in the study: (i) the level of efficiency in the national system of knowledge production; (ii) the level of efficiencyin technology development; and (iii) the level of national technology capability. Allthe countries included in this study were clustered into three categories based on theirlevels of technology capability, as illustrated in Figure 1. The first category represents6% of countries, including Japan and Germany, that have attained the highest levels of technology capability (>60%). The second category represents 15% of countries,including the Netherlands, Italy, Chinese Taipei, Korea and France, which have

Presentation at the Conference for Putting a Price on Carbon: Economic instruments to mitigate climate change inSouth Africa and other developing countries. University of Cape Town, South Africa, 23-24 March 2010

3achieved a level of 30% to 60% of technology capability. The third categoryrepresents 79% of countries that have the lowest levels (<16%) of technologycapability.

South AfricaJapanGermanyFranceItalySouth KoreaNetherlandsChinese TaipeiRussiaMexicoSpainSwitzerlandBelgiumTurkeyPolandSweden01,0002,0003,0004,0000255075100

National Technology Capability (%)

G r o s s D o m e s t i c P r o d u c t ( B i l l i o n c u r r e n t P P P $ )

Figure 1.

Levels of national technology capabilityAnother aspect observed from these results is that countries such as the Netherlands,Italy, Chinese Taipei, Korea and France, which have approximately the same orsmaller population size than South Africa, achieved greater levels of technologycapability compared to South Africa in 2005. These countries also achieved greatereconomic prosperity compared to South Africa in 2005. On the other hand, the resultssuggested that countries that have low levels of technology capability tend to havesmall economies. These results also presented a unique set of countries such asRussia, Mexico and Spain, which have relatively large economies but have low levelsof technology capability. The findings presented in the existing body of literaturevalidated the results presented in this paper.This paper also verified the relevance of the NTC as an analytical tool to determineand benchmark the levels of NTC internationally, by establishing the relationshipbetween the size of national economies (gross domestic product) and their levels of technology capability (percentage). The purpose of this test was not to establish acausal relationship between the level of NTC and the size of the economy. The resultssuggest a very strong and statistically significant relationship between the levels of technology capability and the size of the national economies. These results indicatethat countries such as Japan and Germany, which have attained the highest levels onNTC (>60%), are also enjoying the highest levels of economic prosperity (GDP).