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Budget and Strategic Plan
FY 2008/9
David Phaho
Presentation
to the
PORTFOLIO COMMITTEE ON SCIENCE AND TECHNOLOGY
Date: 27 May 2008
Presentation Outline
Tshumisano’s Strategic Intent & Moral Purpose
Envisaged Outcomes for Business Plan FY 2008/9
Programme Review for FY 2007/8 Technology Stations and their scope
Performance Review FY 2006/7 – FY 2007/8
SWOT Analysis
Business Plan for FY 2008/9 Strategic Imperatives FY 2008/9
Income and Budget Forecast : FY 2008/9 – 2010/11
Strategic Intent: Strategic Intent:
To be within reach of every SME in To be within reach of every SME in the country through its Technology the country through its Technology Transfer and related activities at Transfer and related activities at
Universities.Universities.
Moral PurposeMoral Purpose
To do what is right:
The efficient and effective usage and
deployment of public funds.
To do what is worthwhile:
Providing world class technology solutions and
training to SME’s to enhance economic growth
in South Africa.
Envisaged Outcomes for Business Plan
Increase the number and quality of SME’s assisted
through referrals and linkages with other Agencies and Government Programmes.
Enhanced alignment with DST’s ten year Innovation Plan.
Enhanced Human Resource Development with specific emphasis on Internship Programme and Student involvement
Continuous Improvement to mitigate Structural Inefficiencies within the Trust.
Why SME’s??
SME’s generally have higher growth tendencies (sales, turnover, jobs) than larger firms
SME’s accounts for a disproportion number of gross jobs created
Benefit of Economics of Scope rather than Economics of Scale – nimble and shielded from Exogenous shocks
Tends to be more Innovation intensive than large firms
Ref. Schreyer, P. 2000. High Growth Firms and Employment, OECD Science, Technology and Industry, Working Papers, 2000/3
Technology Stations Programme
PROGRAMME REVIEW for FY 2007/8
Technology Stations and Their Scope
Agro Processing and Chemical Cluster
• To Support the Chemicals and the Agro-Processing Industry.
• Formulations, Pharmaceutical and the Natural/Indigenous Products, Detergent & Paint .
• Testing and analysis in manufacturing low-end products.
Primary Manufacturing Cluster
• The secondary manufacturing cluster focuses on advanced manufacturing and value adding services within three critical industrialized sectors
• Specialises focus is in product development and prototyping
• Application of Smart materials, textiles and reverse engineering
Secondary Manufacturing Cluster
• This is a support cluster , with service of system automation and processing of materials.
• Material compositions and casting (foundry) solutions.
Performance Review
FY 2006/7 -FY 2007/8
FY2006/7
First Six months of FY 2007/8
ProjectedFY
2008/9
FY 06/07 FY07/08 FY08/09
Activities for SME
Number of SME contacted _ 756 3000
SME assisted 1083 570 2600
Black Owned SME’s 200 118 290
Females owned/ managed 221 65 318
Training activities
For one client/participation SME _ 35 _
No of participating SME’s 332 184 400
Open to a group of SME / no of events _ 56 _
Technology services
Testing and Analytical Services _ 881 _
Manufacturing / Prototyping _ 125 _
Consultation, Technology Audit _ 54 _
Product or Process improvement _ 252 _
PROJECT: Applied Research, Design & Development. _ 117 _
PROJECT: Research & Development _ 64 _
Technology Demonstration and Training _ 163 _
Internship Program
Placed at Station 87 99 230
Place in related Industries _ 57 _
Manufacturing / Prototyping
8%
Technology Demonstration and
Training10%
Testing and Analytical Services
53%
PROJECT: Research & Development
4%
PROJECT: Applied Research, Design
and Devl. 7%
Consultation, Technology Audit
3%
Product or Process improvement
15%
Type of Technology support from TSP Type of Technology support from TSP
First six monthsFirst six months of FY2007/08 of FY2007/08
Comparing three (3) financial years of TSP growth
PastCurrent(Q1 & Q2) Projected
FY 06/07 FY07/08 FY08/09
Activities for SME.
Number of SME contacted _ 756 3000
SME assisted 1083 570 2600
Black owned 200 118 290
Females owned/ managed 221 65 318
Training activities
For one client/participation SME _ 35 _
No of participating SME’s 332 184 400
Open to a group of SME / no of events _ 56 _
Technology services
Testing and Analytical Services _ 881 _
Manufacturing / Prototyping _ 125 _
Consultation, Technology Audit _ 54 _
Product or Process improvement _ 252 _
PROJECT: Applied Research, Design & Devl. _ 117 _
PROJECT: Research & Development _ 64 _
Technology Demonstration and Training _ 163 _
Internship Program
Placed at Station 87 99 230
Place in related Industries _ 57 _
20% compound increase of Technology Stations clientele = aprox. 1300 Technology base SME
Product Development Example
Adept Airmotive Ltd and Three Technology Stations Consortium
(CUT, TUT and UJ)
Technology Transfer
Product Design & Development
Development and Application of New Technologies
Mechanical / Materials Testing Services
Project Management
Process Control and Monitoring
Customized Education and Training
Quality
System Analysis and Design
Part of South Africa 1st Light Aircraft Engine Development
Tooled, Manuactured and Tested in South Africa
Worldwide Inquiries
SWOT Analysis
Positive Negative
Strengths Weaknesses
Consolidated mandate within national SME Development structure
Program accessibility to variety of SME’s in relevant sectors
Rapidly expanding network of SME’s served by programme
The Concept of Technology Diffusion to SME’s not adequately articulated
SME development alignment with Innovation Imperatives
Inadequate research output leading to low level of technology diffusion to SME’s.
Lack of understanding about the importance of Technology Diffusion to economic development.
Opportunities Threats
Integration of Tshumisano into the Technology Innovation Agency
National Supplier Programme @ Dept. of Public Enterprises
Project funding from other relevant SME Developing Agencies
Staff turnover at Technology Stations and IAT’s.
Uncertainty about industrial policy namely, MIDP review
Critical skills shortage in key economic sectors
Growing competition from low cost countries e.g. Clothing & Textiles
Business Plan
for
FY 2008/9
Strategic Plan Summary
2007 - 2011
Attribution Gap
Strengthen the Network of University based instruments servicing technology based Small and Medium Enterprises (SME’s) for participation in industrial value chains and promoting high growth economic sectors
Programme Objective
Component Objective
At least one Technology Station (TS) established in one of the 3 remaining provinces and planning phase underway for the other 2 provinces. At least 10 % of academics and consultants working on Tshumisano Projects engaged on Research to pursue Masters or Doctorates in Science and Technology (Engineering) by the end of 2009/10 (baseline 2007).At least 2500 SME’s assisted annually by Technology Stations and Institutes of Advanced Tooling (IATs) from 2007 until 2009/10
All government SME development and funding agencies and 1 in every 2 technology based SME’s aware of Tshumisano and its services.
Tshumisano occupying a permanent seat or allocated a permanent focal person in the Higher Education South Africa (HESA) and at least featuring once a year on the Agenda of the Council/Exco and reflected on the Annual Report of HESA by 2009.
All Tshumisano driven activities are meeting equity targets of at least 85% black people, 54% woman and 4% people with disability.
ProgrammeIndicators
The level of Skills Development and Training at Tshumisano Initiatives
enhanced
50% of the Universities (with TS/IAT’s) receiving funding from National Research Chairs.50% training offered by the Technology Stations are fully Sector Education and Training Authority (SETA) accredited.At least 85 interns admitted with the Technology Stations Program (TSP) per year and 80% of them placed in industry or becoming entrepreneurs within 6 months after training.
ComponentIndicators
At least 100 SME’s products tested or developed per Technology Station per year as from 2007 to the end of 2009.At least 10 SME’s secured contracts on tested products by stations by the end of 2009.At least 12 products/tools designed, prototyped and tested per IAT per year.
Technology based SME’s initiatives supported in adding value to
enhance the competitiveness of their products
The facilities of Tshumisano developed and fully utilized and the
capacity of its employees and project leaders
enhanced
1. Human Resource Development
Components 2. Smart Industries
Economic growth, wealth and employment creation, increased black and female business participatory and productive citizenship
Impact -Indirect benefit
3. Institutional learning and development
4. Economic value added
Tshumisano Trust activities strategically aligned with other
stakeholders and promoted and marketed amongst
target group
At least each TS working in collaboration with another on a specific project.
70/30 ratio usage of equipment by TS’s between SME related projects and University Research and Development (R&D) projects.
All staff members registered for academic qualifications and short courses and 80% successfully completed.
Tshumisano listed as a public entity by end of 2009
20% compound increase of Technology Stations clientele
One project implemented in collaboration with at least one stakeholder and/or agency
At least 8 SME’s referred to each Technology Station per year by another agency
20% annual increase in number of products, processing or services in the economy
Strategic Imperatives
for
FY 2008/9
Human Resource Development:
At least three (3) Technology Stations accredited with
their respective SETA
At least 120 interns admitted with the TSP program
and 80% placed in industry
Increase the Human Capacity at the Technology
Stations and the IAT’s to ensure increased output for
the program.
Smart Industries:
At least 100 SME’s products tested per Technology Station
At least 5 SME’s secured contracts on tested products per station
At least 12 products/tools designed, prototyped and tested per IAT
Additional Technology Stations (Mpumalanga and Northern Cape) -depends on availability of additional funding
Institutional Learning and Development :
Assist the Technology Stations within the clusters to work in collaboration with each other
Implement equipment audit with equipment usage log sheet at Technology Stations and IAT’s
All staff members at PMU and Centers registered for academic qualifications and 80% successfully completed
Economic Value Added :
20% increase on Technology Station clientele measured against targets for FY 2007/8
Increase number of projects in collaboration with other agencies, measure against numbers from FY 2007/8
Initiate a national marketing campaign for all stations to ensure uniformity and management of all marketing channels from the PMU.
Income Statement and Budget Forecast
FY 2008/9 – 20010/11
Income Statement Projections for the MTEFBudget Budget Budget
Operating Statement 2008/ 2009 2009/ 2010 2010/ 2011Core Grant from DST 36,000,000 36,000,000 38,160,000Deferred Income from 07/08 870,000 0 0Ring Fenced Funds:Internships 6,600,000 6,000,000 7,500,000Ring Fenced Funds:IAT 7,500,000 2,500,000 0Interest Received 612,000 600,000 606,000
TOTAL INCOME 51,582,000 45,100,000 46,266,000ExpenditureHuman Resources/Salaries & Incentives 3,882,336 3,950,000 4,187,000Staff Development/Training 384,000 370,000 375,000Organisational Development 242,000 0 255,000Staff Recruitment 150,000 150,000 165,000Travel: Local & International 630,000 780,000 550,000Office Rental and Services 535,000 550,000 583,000Clleaning Services 2,500 2,800 3,100Insurance 320,000 350,000 320,000Communication Costs 300,000 350,000 300,000Stationery/Printing/Courier/Printing 345,000 355,555 255,000Subscriptions, membershipfees and resource centre 25,000 28,000 30,000Website Expenses 95,000 65,000 45,000Equipment Rental 120,000 125,000 128,000Vehicle expenses 30,000 35,000 38,000Office Maintenance and Alterations 15,000 18,000 5,000Entertainment expenses 50,000 65,000 50,000Audit Fees/Legal Services/Consultants 150,000 150,000 100,000Bank Charges & General Expenses & Interest Paid 50,000 45,000 45,000PR and Marketing 343,600 365,000 375,000Events and Conferences 507,100 450,000 550,000
TA Forum 113,464 30,000 35,000
Total PMU Expenditure 8,290,000 8,234,355 8,394,100Payments to Programmes Running Costs 21,000,000 22,260,000 23,571,900Major Equipment Funding 3,750,000 3,750,000 4,200,000Major Project Funding 4,500,000 3,130,645 4,500,000Interns 6,110,000 5,600,000 5,600,000IAT Programme 7,062,000 2,125,000 0Other Projects - Indo- Germany 120,000 0Provincial Government western Cape 750,000 0 0Total Payments to Programmes 43,292,000 36,865,645 37,871,900
Net Surplus to be carried forward to 2007/ 2008 0 0 0
GTZ Contribution
FY 2008/9
German Inputs BudgetEuro
Budget Rand
Exchange Rate:@10.6/€(30.01.0
8)
Bill of Quantity Kind of Contribution
1 12 PM Local Technical AdvisorOrganizational Development
32,000,-- 339,200,--
2 12 PM German Tooling Advisor for Institute of Advance Tooling Initiative
60,000,-- 636,000,--
3 International Consultancy Service;
up to 45 days @ €320/day
Short-term Visiting German Experts to Technology Stations/ IAT’s
100,000,-- 1,060,000,--4 Training Courses
up to 10 assignmentsFurther Education & Training Programmes in
Germany for Staff Members of Technology Stations / IAT’s
5 3 Trips Internships ( after completion of 1 year internship at station)
6 2 Trips;up to 10 participants
Information & Study Trips to Germany:- Stakeholder tour
- Project team
7 Local Consultancy Service 344 days:
@ 372 €
Local consultancy services:SETA accreditation/ISOE x 3Benchmarking (all stations)
RALIS X 5RALIS Reviews x 2
Review of RALIS tool
127,968,-- 1,356,466,--
8 International Consultancy Service 28 days:
@ 510 €
International consultancy service: RALISRALIS Review
Review of RALIS tool14,300,-- 151,368,--
9 2 x publications Publications 10,000,-- 106,000,--
10 GTZ Overhead Costs (15%) 50,000,-- 530,000,--
Total Budget 2008/2009€394,268 R4,179,240
Qua Vadis
Tshumisano Trust?
Department of Science & Technology’s Technology Innovation Agency (TIA)
TIA’s Core Mandate: Nurturing Innovation for Sustained
Economic Development and Growth
Basic Applied Tech Develop Transfer & Proliferation
NRF
SpecialistResearch Funds
InternationalResearch Funds
TIA
IDC
VentureCapital
SEDA
PBF
Publications/new knowledge Patents/new knowledge products
“Anchor Tenants” within TIA Tshumisano Trust – Technology Transfer and Diffusion from
Universities to Industry
Innovation Fund- Funding for protection of publicly funded research outputs
Biotechnology Innovation Centers – Biotechnology research and commercialization activities
Advanced Manufacturing Technology Unit (CSIR) – Development of advanced materials technologies; product and process technologies; ICT and logistics technologies
THANK YOU!!Tshumisano
Enterprise Centre, The Innovation Hub
Lynwood, Pretoria
Tel : +27(0) 12 844 0413
www.tshumisano.co.za
“Enhancing SME competitiveness through technology”