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The South African economy has displayed relative resilience to the global slowdown and the woes of emerging and developing markets. This positive stance is largely the result of our sound macroeconomic fundamentals. With the achievement of stability in this sphere, the government is correctly focusing attention on the dual challenges of raising growth rates and sustaining poverty reduction. In order to achieve these objectives, we have embarked upon appropriate microeconomic and institutional reforms to complement our macroeconomic stance.

For South Africa to be competitive in the world economy, our private and public sectors must be able to engage in trade, gain market share, and offer high quality products, processes and services. It is on this platform that we will ensure that our economic growth rates are accelerated and that we are enabled to improve the quality of life for all our citizens. Consensus exists in government that Innovation and Technological Advancement are vital to the achievement of our growth and developmental goals. Cabinet has adopted the National Research and Development Strategy to ensure that coherence is attained and that our interventions ensure positive systemic returns. This was also backed by increased science budget to indicate further commitment to supporting research and development.

The Department of Trade and Industry has also published the Integrated Manufacturing Strategy. This document recognises that our comparative advantage, based on our natural endowments in the form of raw materials and energy, is increasingly becoming less important for producers.

The structure of world trade has shifted away from commodity production and simple, raw material-intensive manufactured goods towards increasingly knowledge-intensive goods and services. Our future competitiveness will depend on the capacity of the manufacturing sector to master information technology, to innovate and to meet the precise needs of customers. These are all highly knowledge-intensive activities and are heavily influenced by our ability to integrate government's interventions.

The National Research and Development Strategy recognises that our local manufacturing firms spend little on innovation. We also acknowledge that the termination of key technology missions of the apartheid regime resulted in a reduction of the total research and development spend from 1.1% in 1990 to 0.7% of Gross Domestic Product in 1994. This reduction took place as our new democracy emerged and our National System of Innovation needed to expand to respond to the needs of 40 million people as opposed to a mere 5 - 6 million.

Innovation contributes to the creation of new goods, new services, new jobs and new capital. The application of technology improves productivity and the quality of products. It expands the range of services that can be offered as well as extending the geographic distribution of these services. The development and use of technology plays a major role in determining patterns of international trade by affecting the comparative advantage of industrial sectors.

Advances in science, the organisation and management of firms and government activities also influence technological progress. Innovation therefore has effects on the industrial landscape and trade independent of shifts in macroeconomic factors. New technologies offer the potential of compensating for possible disadvantages in the cost of capital and labour faced by firms. It is on this basis that our National Research and Development Strategy commits to the active promotion of commercial technological development and application. This approach has insured the success of newly industrialising economies and enabled them to harness the benefits of national growth and development.

Our current approach is steeped in a deep understanding of the dynamic nature of systems of innovation. We have recognised that innovations that do not require basic or applied research or development often occur; in fact, most innovations are incremental improvements to existing products or processes. Our National Research and Development Strategy considers the distinctions between the stages of research to be artificial. We recognise that the critical factor is the commercialisation of technology. Economic benefits and social development accrues only when a technology is brought to the marketplace where it can be transacted to generate incomes, increase productivity or ameliorate negative conditions.

We recognise that technological development involves numerous risks. Our National Research and Development Strategy seeks to minimise uncertainties regarding government's programmes and policies, and to thereby redress the perceived disincentives felt by private firms and industry. We specifically have articulated a vision that delineates our national objectives in the form of critical missions. It is hoped that this transparent expression encourages industry to engage in short-, medium- and long-tem research and development.

Technology and Innovation missions are central elements to accelerate economic growth, the creating wealth on a sustainable basis, and the improvement of the quality of life of South Africans. Such missions create conditions for accelerated innovation based on technology. The focus of the Innovation Missions is on key technological innovation, demonstration of technology, incubation of new businesses and enhanced networks of knowledge workers, and firms involved in technological innovation.

Manufacturing is a key of missions worthy of support in order to promote economic growth and social development. To enable delivery on this mission, the National Advisory Council for Innovation initiated the development of the Advanced Manufacturing Technology Strategy. This strategy aims to induce higher levels of technology use in industry as well as increase the innovativeness of local firms

In the current context of resource constraints, opportunities for quantum innovation are limited. There is evidence, however, that potentially good technologies are being lost or not being commercialised because of a lack of innovation resources. Public institutions, like our Science Councils, have considerable expertise in acting as supply measures to redress this gap.

In addition, there is a need for an enhanced role for the social sciences in understanding and providing strategies to enhance the rate of innovation. This includes issues such as the adoption of advantageous innovations by marginalised communities, institutional transformation and structural innovations, as well as the process of technological innovation itself.

In order to be successful, the technology and innovation missions should meet objective criteria relating to the outcomes expected there from. These outcomes are:
* Improvement in quality of life through enhanced adoption of positive innovations;
* The ability to generate wealth and employment based on enhanced adoption of imported know-how, an increased rate of innovation and improvement, and the incubation and establishment of new enterprises;
* An increase in technological support to existing firms in the target domain;
* Increases in the number of science, engineering and technology human resources;
* Levels of, and increases in, foreign direct investment;
* Real increases in private sector R&D spending;
* South African controlled global intellectual property licenses;
* Optimal exploitation of international resources.

Identification of technology and innovation missions is not an academic process, nor is it comprehensive with respect to all economic activity or all social challenges.

Knowledge intensity is having a direct impact on the advanced sectors of the manufacturing industry, and many of these industries, such as the automotive industry. These global industries assume levels of technological integration - such as in design, quality control and inventory management - that are not yet the norm in South Africa. Countries that make the necessary proactive investments will benefit with an increasing share of the knowledge-intensive aspects of automotive production in the future.
The relationship between government and industry is a major factor affecting innovation and the environment within which technological development takes place. It is increasingly apparent that cooperation between these two actors transcends the confines of domestic borders. This is especially recognised at the level of the global market where South African firms are competing with companies from countries where government-industry collaboration is the norm.

It is on this basis that the optimal allocation of resources between private and public sectors will ensure tangible and beneficial returns to both sectors, and ultimately create a sustainable partnership for growth and development. Our Advanced Manufacturing and Technology Strategy presents an opportunity for the emergence of a positive collaborative effort in this most vital sector.

It is my firm belief that by ensuring that business, labour and government collectively engage with our national assets in science and technology, we will expand our manufacturing industry and ensure that we achieve our broader national goals of growth and development. In this respect I would like to pay tribute to the many role-players who assisted in development of the AMTS, to NACI, which carefully governed the process and to the CSIR and its dedicated team that ran a multi stakeholder process over a considerable period, with strong academic, and industry support. This is no mean fear.

I would also like to thank Dr Roy Marcus whose personal energy and commitment was essential to the success of the strategy process.

Lastly, Ladies and Gentlemen, we must always keep in mind the transformation imperative. Our country requires an economy that can meet the needs of all our economic citizens - our people and their enterprises - in a sustainable manner. This will only be possible if our economy builds on the full potential of all persons and communities across the length and breadth of this country. As already mentioned, Government's objective is to achieve this vision of an adaptive economy characterised by growth, employment and equity by 2014.

It is therefore a pleasure to be involved in this important launch of the AMTS.

I thank you

Issued by the Ministry of Arts, Culture, Science and Technology, 29 September 2003