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BY DR SHAWN CUNNINGHAM
18 JULY 2022

As we move between kinds of research programmes and publicly funded technology organisations, we are often struck by the diversity and sophistication of capability that exists in these organisations. The worst is that many of these organisations complain that the private sector is not really interested in what they have to offer.

It begs the question of how this scarce equipment, specialised expertise and sophisticated know-how disseminates to the private sector and the rest of the society.

Researchers often explain that technology from universities flows toward industry through licensing agreements, publications and various kinds of education programmes. Yet, when we speak to industry, we often hear a different story. Only a handful of pioneering companies successfully license technology from public research programmes.

With a few exceptions, most smaller and medium-sized companies do not approach universities or public research organisations to license or formally transfer technologies. This is mainly because most companies do not know where to find these public technology providers, or they do not know exactly what they need, or how much such a solution may be worth. This could also explain why the most sophisticated users of public research have working experience in public research programmes themselves. This is not a surprise because the most effective means of knowledge dissemination is often through the mobility of humans with appropriate knowledge and networks, for instance when a post-graduate researcher moves from a laboratory to a business.

To improve the technological capability and innovation in the private sector, we have to consider different ways to improve technology dissemination and technological absorption. Education is of course one crucial way of doing this, but that is a topic for another post.

A simple rule of thumb is to think of three modes of technology dissemination:

  • Technology transfer is usually based on a contract between a provider and the recipient that specifies the technology (hardware, software, routines and logarithms), the conditions of use, and other rights to the recipient. In South Africa, it helps that technology transfer from public organisations is regulated because the costs, processes and conditions are typically made clear upfront. Technology transfer also happens in the private sector between companies, or between local and international technology providers.
  • Technology development is usually project-based and involves the development of precise technological specifications for a client. When a small business approaches a university, public research programme, or even a private technology development company, it is crucial that it understands enough about the requirements and performance of the desired solution it is seeking and the complementary capabilities that are needed to make the solution work. To successfully outsource a technology development project, a recipient must be able to manage the process, the service provider and the associated risks.
  • Technology extension is usually more interactive in nature. A knowledge provider, like a university department, or a technology centre, extends its capabilities to complement what exists in the recipient enterprise. This can be in the form of technology demonstration, supporting the development and testing of prototypes, conducting simulations, or performing analytical services. Technology extension does not work well when the enterprise does not have a certain minimum competency of either its existing technological domains or intimate knowledge of the market requirements.

In the South African innovation system, all three of these modes are visible, often delivered by the same or closely related departments. However, South African innovation and industrial policies are skewed in favour of the more formal modes of technology transfer and technology development, while technology extension is undervalued or hardly supported.

I will only briefly state that this bias is largely because the more formal modes of technology transfer and also technology development can be measured more precisely. Also, better-resourced companies are able to manage and fund technology development and transfer projects to precisely fill gaps in their organisations.

Companies that employ scientists and engineers and that can manage complicated contracts are spoiled for choice in South Africa because many research departments and research organisations are desperate for third stream revenue.

The third mode, technology extension, is more valuable than the other two modes for most small engineering and manufacturing companies. Technology extension is when a laboratory or a technology centre offers problem-solving, technology demonstration, and advisory or analytical services to enterprises. Often, companies can approach these facilities to get help to design or improve a prototype, to assist with simulation or design services, or to conduct specific analytical or testing services. Even better, an expert can visit the premises to diagnose or provide advice. What makes technology extension difficult is that the advice and solutions must consider the existing competence, infrastructure and market conditions of the enterprise.

I can briefly give three reasons why technology extension is more valuable for smaller companies. Probably the most important reason has to do with the lack of functional specialisation in many small companies. Everything seems somehow interconnected in a small business, and solving a problem in one area might actually aggravate problems in other areas. Smaller companies often need advice on sequencing or prioritising technological improvements that consider their existing capabilities, finances and the market conditions they are facing. Second, it is often hard to figure out how much a technological solution is worth, and how this can be financed. Often small companies try to finance technology development projects from their cash flow, which could lead to disastrous consequences if there are any delays or cost escalations. Third, even when technology is transferred or developed according to a contract, a small company might simply not have the complementary capabilities, logistical or strategic market position to leverage the additional capacity that a specific technology has to offer. Of course, there are exceptions.

An example of a local technology extension service is the Centre for Rapid Prototyping and Manufacturing (www.crpm.co.za ) hosted by the Central University of Technology.

Entrepreneurs can visit this facility to see how industrial 3D printing is done, they can receive advice on how they must adapt their designs and processes to harness the features of additive manufacturing capabilities. The engineers can even demonstrate samples, software applications and other good practices with designers, or work with the company to integrate 3D technologies into its context. Before a company invests in its own 3D printer, it can use the CRPM on a pay per use basis for a range of services, from design, prototyping, and manufacturing, or even investing in its own additive manufacturing capability.

Even if these three kinds of technology dissemination have many characteristics in common, it is important to recognise that the means of delivery, the kinds of projects undertaken, the funding mechanisms, and also how to measure their value are very different.

It is even more important to recognise this when these three kinds of technology dissemination are delivered by the same organisation, like an engineering department.

The Technological Change and Innovation System and Observatory seeks to make the different technology extension, development and transfer organisations more visible and valuable to the South African manufacturing sector. We also want to advocate for a strong emphasis on publicly funded technology extension.