Using Nigeria’s oil to diversify the national economy

SKA won as science ranking dips

This article was originally published on Business Day Live. The article was written by David Gleason and was published on the 01 June 2012. 

NOT a single rand was raised in this country for investment in early-stage or venture capital-type investments last year. These are the investments that spawn new technologies out of which, if they are successful, new industries are grown and thousands of new jobs created.

Lack of investment

So why is there such a truly astonishing lack of investment? Speaking at the launch of the KPMG/ South African Venture Capital Association annual Private Equity Industry Performance Survey, KPMG director Warren Watkins told a meagre audience it wasn’t so much a lack of ideas and effort, since there is a more than adequate supply of these, but rather the comparative absence of incentives similar to those applied in other countries.

And this leaves me wondering to what extent the driving force of the Treasury, which is primarily to ensure that the state collects as much money as possible, doesn’t blind it to the long-term advantages that investment in science and technology can bestow. It is, after all, one thing to amass money and quite another to disburse it wisely.

And part of that debate involves something few people pay much if any attention to – and I strongly suspect the mandarins in the Treasury fall into precisely this bracket. An effort is under way through the machinery of the National Assembly to bring wholesale change to the manner in which intellectual property is legislated and administered.

Protecting patents and trademarks

The danger here is that the need to adequately protect South African patents and trademarks will take second place to perceived narrow party-political advantage. It may even, for all I know, extend to an abrogation of this country’s obligations in terms of its international patent law and intellectual property treaties. By way of example, the methods applied in ensuring that rights attendant on the Hoodia extract are owned by San people have raised a number of questions. It is clear this is a matter that needs to be pulled together under a single head.

Meanwhile, this is the year in which SA was awarded the lion’s share of the work and management attached to the Square Kilometre Array (SKA), the world’s largest radio telescope yet. But the country’s ranking among those funding research and development has fallen to 10th place, with indirect support through tax incentives easily overtaken by 20 countries. The target to reach 1% of gross domestic product spend on research and development by 2008-09 still hasn’t been met.

SA has dropped 16 places on the Global Innovation Index. The United Nations’ 2012 index is to be unveiled in Geneva on July 3.

Oh, and while I’m about it, will Science and Technology Minister Naledi Pandor please tell her director-general to get his act together and produce the department’s National Survey of Research and Experimental Development for 2009-10 and 2010-11? This manyana attitude really won’t do.

Examination of European dangers

JOHN Cleese, famous as the manager of Fawlty Towers, has issued a full examination of current European dangers, which I was happy to supplement.

The British may soon raise their security level to “A Bit Cross,” he says, the first time this warning has been issued since 1940 when tea supplies nearly ran out. The Scots have raised their threat level from “Pissed Off” to “Get the Bastards”. These are the only two Scottish levels, which explain why Scots have been used in the front line of the British army for the past 300 years.

The French government has raised its threat level from “Run” to “Hide”. Its only two higher levels are “Collaborate” and “Surrender”. Italy’s has gone from “Military Posturing” to “Change Sides”.

Germany has shifted gear to “Sing Marching Songs”. Its two higher danger levels are “Invade a Neighbour” and “Lose”.

Belgium hasn’t issued any threat warning. After 19 happy months without a government its only real worry is that Nato will leave Brussels. Spain is oblivious to all except its new glass-bottomed submarines, which it is using to take a really good look at the old Spanish navy.

Australia has raised its threat level to “She’ll be all right, mate”. Only one higher level remains: “You’re a sport, Sheila”.

In summary: Greece is collapsing and the pass at Thermopylae is unmanned; the Persians are getting aggressive; Rome is in disarray while its legions strike for better pension plans. Welcome to 430BC … TGIF.

The International Energy Agency special report

THE International Energy Agency asks in a special report dated last year whether the world is entering “a golden age of gas”. Gas certainly has lots going for it. It is flexible, resources are abundant and widely spread, it is a comparatively clean fossil fuel, and the agency reckons by 2035 it will account for more than 25% of world energy supply.

Of course, its increasing use will curtail spend on renewable energy sources such as solar and wind. And, since much gas will come from the hydraulic fracturing process (fracking), the environmental lobby will respond with increasing vigour.

A conference to consider fracking in the Karoo was held in Johannesburg this week – and wasn’t as emotionally charged as some expected. Of course, there are aspects to fracking that people want answered. To what extent, for example, can it pollute existing ground water supplies? Fracking requires considerable quantities of water anyway and, given the Karoo is perennially short of water, where is this to come from? Does it encourage earthquakes?

There are answers to these issues and I am sure (or rather, I hope) they’ll be addressed conclusively in the government report due out next month. Anglo American has been following fracking around the world and has a pretty solid grasp of the benefits and problems.

One thing’s for sure. The moratorium has to be brought to a final end. Only via commercial experimentation will it be possible to determine whether the Karoo’s deposits of shale gas can be exploited economically. Just because they are seen to be vast (they are) doesn’t mean they can be made to pay.

This article was originally published on Business Day Live. The article was written by David Gleason and was published on the 01 June 2012. 


David Okwara

, , , , , , , , , ,

No comments yet.

Leave a Reply

Twitter Linkedin Facebook YouTube RSS