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Pandemic has ravaged business research in South Africa

Image: Canadian Nuclear Laboratories [CC BY-ND 2.0], via Flickr

Reduced spending and staff layoffs threaten R&D performance

The Covid-19 pandemic caused almost immediate harm to South African businesses R&D, according to data published this week by the Human Sciences Research Council.

About 38 per cent of R&D-performing businesses cut their R&D expenditure in May last year when the country was at level 4 lockdown, data gathered by the national statistics bureau and studied by HSRC analysts show.

This reduction could have dire effects on South Africa’s research performance, the analysts write in a policy brief posted on the HSRC website. “The consequence is that R&D intensity will decrease in the long term unless strong corrective action is taken.”

The drop comes in the wake of sustained declines in the proportion of South Africa’s gross R&D expenditure originating in the private sector. In the 2007/08 financial year businesses accounted for 60 per cent of South Africa’s R&D spend. A decade later, business R&D made up only 40 per cent of the country’s spend.

In the lockdown data, investment slumps were particularly eye-catching in the construction sector (where more than 60 per cent of firms reported cutting R&D spend), mining and quarrying (50 per cent) and electricity, water and gas supply (50 per cent).

More than half of the R&D-intensive businesses laid off research staff in the period reviewed, the study found. “This would leave these firms with a reduced ability to compete in a post-Covid business environment,” write the authors.

Quick bounce-back unlikely

The brief’s authors recommend that the Department of Science and Innovation provides funding support to R&D firms and that the DSI develops programmes to retain researchers who lost their jobs, either by subsidising their re-employment in industry or by finding them jobs in the public sector. “This could mean increasing support for public sector R&D,” they conclude.

The data on which the policy brief draws is from a window early in South Africa’s Covid-19 pandemic. But author Nazeem Mustapha, chief research specialist from HSRC’s Centre for Science, Technology and Innovation Indicators, says he does not believe there’s been a recovery in industry R&D spend in the year since the data was collected.

“If I were a gambling man, which I am not, I wouldn’t bet on a bounce-back in business R&D expenditure any time soon,” he told Research Professional News in an email. He explains that the job losses suggest that R&D will remain depressed in the short- to medium-term as “specialised personnel tend to be harder to replace”.

But the long-term picture could be more rosy, he writes. “Looking further into the future, perhaps renewed government expenditure and policy attention in the health sector as a response to Covid-19 may stimulate growth in business R&D in the health sector.”