South Africa’s R&D Decline Signals Systemic Strain
The latest South African Science, Technology and Innovation (STI) Indicators Report, compiled by the National Advisory Council on Innovation (NACI) for the Department of Science and Innovation, paints a sobering picture of the country’s research and development trajectory. Covering the 2018/19 period, the report reveals a continued erosion in investment levels, with implications that extend far beyond academic laboratories into the broader engineering and industrial ecosystem.
Gross expenditure on research and development (GERD) as a percentage of GDP fell from 0.83% in 2017/18 to 0.75% in 2018/19. This metric, closely watched by policymakers and industry leaders, reflects the overall national commitment to innovation. The decline is mirrored in business expenditure on research and development (BERD), which dropped by more than 12% over the same period. In constant 2010 values, BERD hovered near R10.5 billion for much of the past decade before sliding to R9.3 billion in 2018/19. Its share of GERD fell from 53.2% in 2009/10 to just 39.3%.
Dhesigen Naidoo, a NACI council member, underscored the significance of this shift: “One of the key points we used to herald in all of the international discussions is that while the numbers were low in the South African environment, the relative share between the private and public sector was very positive, with the business sector expenditure on R&D [BERD] being a little bit higher than government expenditure on R&D. We are far from that now.”
Naidoo argues that reversing the trend will require targeted public investment to catalyze private sector confidence. Historically, balanced contributions from government and industry have helped sustain innovation ecosystems, especially in sectors such as aerospace, automotive engineering, and advanced manufacturing, where long development cycles demand patient capital.
Foreign direct investment (FDI) into South African R&D has also contracted sharply. A decade ago, 60% of foreign-funded R&D was directed to the business sector; by 2018/19, that figure had collapsed to 10%. In monetary terms, foreign business expenditure on R&D fell from R1.5 billion in 2009/10 to R400 million in 2018/19. “The numbers have never been incredibly high, but they’re not exactly small either. We’re moving from 2009/10 of R1.5 billion, to R400 million in 2018/19 – that is a drop of two-thirds,” Naidoo stated. This contraction undermines South Africa’s stated ambition to position itself as a preferred destination for science, technology, and innovation.
The STI Indicators Report aggregates data from public and private entities, tracking metrics critical to the health of the National System of Innovation (NSI). Beyond expenditure, it assesses human capital development (HCD), innovation funding, entrepreneurship support, and outputs such as scientific publications and patents. HCD emerges as another area of concern. The World Economic Forum defines HCD as the formal education of the next-generation workforce and the ongoing upskilling of the current workforce. In South Africa, the proportion of students entering science, engineering, and technology fields was already below 35% before the pandemic, with Naidoo warning that post-pandemic numbers are likely to be even lower.
“Even before the pandemic, we’ve seen that the percentage of kids that actually went into the science, engineering and technology fields was less than 35%. Out of the pandemic, we’re going to see numbers even lower than that, which means the pipeline is in trouble,” he said. For sectors reliant on highly skilled technical talent—such as robotics, aerospace propulsion, and materials science—this narrowing pipeline threatens future capacity.
While Naidoo acknowledges that some fundamentals in the STI ecosystem remain intact, he stresses that the system is falling short of its ambitions. “The NSI clearly needs some structural renovation, and the white paper project and the consultations around the white paper is a very important start. There is emergency action that is required immediately, and upping our game in science, technology and innovation is key,” he concluded.
For engineers, students, and innovators, these figures are more than abstract policy indicators—they signal the availability of resources, the vibrancy of collaborative networks, and the long-term competitiveness of industries that depend on sustained research investment.
