Low Investment In Research Hampers Agri Growth

Dr Sifiso Ntombela, a trade economist at the National Agricultural Marketing Council, writes that as technological advances are being achieved at an everfaster rate, countries that fail to invest sufficient resources in research and development risk falling behind and becoming uncompetitive.

Modern society is characterised by constantly changing technology, which has been enhanced by the arrival of the Fourth Industrial Revolution (4IR). The 4IR era requires countries to invest in adequate research, development and technology innovation to remain globally competitive. The pressure to stay ahead in this era is partly at the root of the ongoing trade war between the two global economic giants, China and the US. Recognising the need to strengthen research and development capacity, industrialised countries, especially those belonging to the Organisation for Economic Co-operation and Development, spend on average 2,3% of their gross domestic product (GDP) on these activities, while countries in subSaharan Africa spend on average 0,5%.

South Africa spends about 0,8% of GDP on research and development, which is equivalent to roughly R32 billion. The National Development Plan (NDP) has suggested that this figure be close to 1,5% of GDP to enhance innovation and attain a technology-inclined economy. This gap between current spending on research and development and the NDP’s target helps explain why the country has dropped in competitiveness rankings: the World Economic Forum’s Global Competitiveness Index shows that South Africa shifted from position 62 in 2017 to 67 in 2018 due to a decay in innovation and an enabling environment.

EXPENDITURE ON AGRICULTURE RESEARCH EVEN LOWER