The Innovation Fund

General Application Guideline

1. What is the Innovation Fund? 

2. Objectives

3. Scope of projects

   1. The Promotion of an Information Society (maximum of three years funding)

      1. Local content applications

      2. Service delivery enhancement

      3. Advanced software development

      4. Decision-support for Government

   2. Biotechnology (maximum of three years funding)

   3. Value-adding drive (maximum of three years funding)

      1. Innovative use of South Africa’s natural flora and fauna

      2. Advanced Technologies: Materials and Manufacturing

   4. Grant limits

   5. Eligibility

   6. Evaluation criteria

      1. National Benefit

      2. Innovation

      3. Technical details

      4. Potential for utilisation of results / commercialisation / table of market returns

      5. Capacity

   7. Intellectual Property (IP)

   8. Referees

   9. Project selection process

   10. Call for proposals and closing date

1. What is the Innovation Fund?

The Innovation Fund is a programme designed to support large scale science, engineering and technology (SET) innovation programmes.

The Innovation Fund can be accessed by statutory research and technology institutions, the higher education sector, the business and industrial community and non-governmental bodies.

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2. Objectives

The key objectives of the Fund are to:

• promote technological innovation within the research community;

• permit a reallocation of funds from the historical patterns of government science towards the key issues of competitiveness, quality of life, environmental sustainability and harnessing information technology;

• increase the extent to which funds for the activities of Government SET institutions are obtained via competitive processes;

• promote cross-sectoral collaboration within South Africa’s national system of innovation.

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3. Scope of projects

The nature of the problems/challenges to be addressed by this Fund should be serious enough to impede socio-economic development or affect our ability to compete in products and services. The projects must therefore involve technological innovation with a large component being research and development (systematic and investigative or experimental activities). The projects should provide new knowledge, which will have specific practical application for the development of new or improved materials, products, devices, processes or services. The exploitation of the project results must be for the benefit of South Africa. There must be some indication of benefits extending beyond those accruing to a particular organisation/business (see 1.6 below).

Preference will be given to proposals submitted by consortia, however those submitted by individual organisations will not be rejected. The parties to the consortia may be drawn from statutory research institutions, the higher education sector, the business and industrial community, and organisations of the non-governmental research community. The composition of the consortia should be determined by the nature of the project.

The focus of projects in this first phase covers the following areas:

1. The Promotion of an Information Society (maximum of three years funding)

There are numerous forces driving the information revolution and South Africa and the developing world must be prepared to confront them with visionary leadership, and strategic planning and policy-making. The changing high-speed global political economy requires more knowledge intensive, disciplined and innovative approaches to the management of societies and economies than in previous eras. With these principles in mind the following key areas have been selected for support:

1. Local content applications

This focal area exploits the tremendous scope for the innovative development of applications based on existing software to improve the access of South Africans to the Information Society. Examples include distance learning support, extension of electronic commerce to a wider community, and information networks in support of cultural industries and tourism.

2. Service delivery enhancement

This focal area is intended to stimulate the development of more efficient technologies for telecommunications service delivery. Examples include bandwidth optimisation, and improved data compression techniques.

3. Advanced software development

In the past, particularly in the Defence Industry, South Africans developed advanced software unavailable on the international market. It was tailored specifically to solve strategic or industrial problems. The need for this type of innovation still exists, for example, in systems integration, process condition monitoring, pattern recognition applications (e.g. African language voice recognition) and environmental modelling. This focal area provides an opportunity for innovative advanced software development.

4. Decision-support for Government

This focal area is intended to stimulate the development of decision support software to assist Government in planning and co-ordination, for example, in the articulation of spatial development initiatives with other provincial and national thrusts.

2. Biotechnology (maximum of three years funding)

Biotechnology has the potential to influence economic, business and cultural aspects of life to a very large extent. International research investment strategies are sharpening in respect of the economic prospects in the life, materials and environmental science areas. This is an area where there is tremendous potential for increased numbers in start-up firms spinning-off from licensed usage of product and process technologies, developed through the integration of natural sciences and engineering sciences.

South Africa is considered a fast follower in biotechnology, but abysmally outclassed as an initiator, as very little that has emerged from this country, can be considered as novel. The Innovation Fund, as a policy instrument, aims to change this track record. The focus of support in this round will be in the following areas:

• Biomedicine;

• Diagnostics;

• Agriculture & Fisheries;

• Food & Beverages; and

• Minerals, Materials & Chemicals.

3. Value-adding drive (maximum of three years funding)

This third sector is really at the heart of what the Innovation Fund is intended to achieve, namely improvements to natural resources, products, systems or processes by knowledge addition. Such innovation has become a crucial survival issue. A society that pursues well being and prosperity for its members can no longer treat it as an option. Nevertheless, because of the extreme breadth of the term "value addition", it has been decided to consider proposals in the following area:

1. Innovative use of South Africa’s natural flora and fauna

South Africa has enviable but dwindling biodiversity resources, and it is an imperative for us to use them to our advantage in a sustainable way. This focal area provides an opportunity for the coupling of indigenous knowledge systems with strategic international market assessments and existing South African competence in systematics, to develop innovative uses for our natural flora and fauna.

2. Advanced Technologies: Materials and Manufacturing

To become competitive in the face of rapid globalisation, South Africa needs to move away from a factor-driven economy towards an innovation-driven one. Developments in advanced manufacturing and other technologies will be key in this respect, particularly in terms of the following focal areas:

• system integration (design and engineering);

• net shape & rapid solidification processing;

• integrated sensor technologies (sensor technologies with embedded electronics and software) – also accommodated in 1.3.1;

• materials handling (e.g. automatic storage and retrieval); and

• materials beneficiation. 

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4. Grant limits

The fund is designed to support large collaborative projects. Therefore :

• a minimum threshold of R1 million per year, and

• a maximum of R5 million per year has been set.

The time limit for projects is three years. 

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5. Eligibility

Support will be for activities that can be defined as systematic, investigative or experimental. The intended result of the activities must be new knowledge (with specific practical application) or new or improved materials, products, devices, processes or services.

Non-R&D costs that will be considered include support for acquisition of patents, licensing, product design and product testing. These costs must be a component of the total cost, that is, the project will not be supported if it only entails acquisition of a license or some other non-R&D cost.

Capital expenditure, such as equipment, will be eligible as a component of the innovation proposal. Motivation will have to be provided for this expenditure and an operational and maintenance plan outlined for the optimal utilisation of the equipment. 

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6. Evaluation criteria

The proposals must involve projects that generate products/processes for commercialisation or new methodologies for development programmes orientated towards service delivery. Proposals will be evaluated in terms of the criteria listed below:

1. National Benefit

A clear illustration must be given of the problem/opportunity that will be addressed by the project, the intended project results and the beneficiaries.

The exploitation of the project results must be for the benefit of South Africa. There must be some indication of benefits extending beyond those accruing to a particular organisation/business. Examples of such include:

• The introduction to South Africa of new technologies and value adding operations;

• Improvement in the efficiency, productivity or competitiveness of South Africans in the production of goods or the delivery of services;

• Diffusion of technologies or value adding operations to industry or development sectors orientated to service delivery;

• increased employment;

• new capital investment;

• exports; and

• import replacement.

With the above objective in mind, it is essential that any intellectual property remains in South Africa, however licensing overseas is permissible and intent to do so must be indicated as part of the detail covering "exploitation of results", as stated at 1.9 below.

2. Innovation

A clear illustration must be given of the innovative nature of the projects.

Details must be provided on the current international and national trends in the particular project focus area.

An indication must be given of the technology take-up in that market or development sector.

3. Technical details

Details are required on the methodology for developing the technological innovation up to prototype stage or, in the case of process or service improvements, to the point where a new system is ready for implementation.

Information must be provided on the consortia’s capacity to undertake R&D or the strategy that will be adopted for contracting in the R&D capacity. (CVs to be provided of key personnel with the technical capabilities and experience for successful completion of the project).

An R&D plan will be required.

Details must be provided on available facilities. Where equipment is needed the strategy for acquiring it or securing the use of it must be outlined.

4. Potential for utilisation of results / commercialisation

A strategy for commercialisation / utilisation of results must be presented.

Details on projected market returns using the following format and providing an explanation of how the figures are derived:

TABLE OF MARKET RETURNS (five years)

An estimate is required of the benefits in terms of social objectives for those projects orientated towards service delivery for an improved quality of life. 

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5. Capacity

An indication of capacity in the following areas should be provided:

• Finances

• Infrastructure

• Human resources

• Management and planning skills 

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7. Intellectual Property (IP)

The intellectual property generated by the project will be vested in the consortium.

A legally binding Consortium Intellectual Property (IP) Agreement would be required, however, a memorandum of understanding signed by all parties to the consortium will be accepted at the proposal stage.

Project information regarded as proprietary must be clearly marked as such in the proposal and subsequent progress reports. Where the Innovation Fund Trust publicises information regarding the projects supported by this fund, the project co-ordinators will be briefed on the content beforehand.

Referees whose services are utilised will be contractually bound for a period of five years not to exploit the knowledge they were privy to in evaluating the project/s.

The Innovation Fund Trust reserves the right to claim ownership of the intellectual property rights if, after a period of five years, it is established that no attempt has been made to exploit the results of the project supported by public funds. 

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8. Referees

Details of at least three referees must be submitted. Of these three, at least one of these should have a commercial assessment background and the others technical expertise. If (under contract to the Innovation Fund Trust) their services are utilised, they will be required to write up an evaluation report. 

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9. Project selection process

The selection process will include the following steps:

1. A technical evaluation in terms of the evaluation criteria set out at paragraph 1.6;

2. Project selection with the technical reports serving as input to the selection process. 

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10. Call for proposals and closing date

The official call for proposals was first made on 27 October 2000.  The closing date for this fourth round is 17 January 2001 at 15h00.  Complete submissions must be addressed, in triplicate, to:

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