Compiled by Dr Michelle Mulder
Idea to Industry cc
With contributions from Dr Torsten Henschel
Biotechnology Industry Consultant
National Biotech Survey 2003 2 EXECUTIVE SUMMAR Y
The present survey of biotechnology activities in South Africa (SA) was aimed at establishing the current state of the industry. This report provides an outline of the biotechnology industry in South Africa, and covers activities in academia, industry, government, and support organizations, based on both primary and secondary research.
Data for the survey was collected from secondary sources, an email questionnaire, and in-person and telephonic interviews. Data was accumulated for 84% of the research stakeholders and >90% of the companies. It is important that the results from the survey are interpreted within the following constraints: - biotechnology refers to a set of processes or technologies and is not an industry or output, therefore one cannot use a statistical industry-based framework for analysis - biotechnology spans a wide range of different sectors and activities and the boundaries are difficult to define - the industry in South Africa is fragmented and clouded in secrecy, which makes the identification of stakeholders and their respective activities challenging - due to the cross-cutting nature of biotechnology and the fact that it does not fall into any specific industry classifications, trade data is difficult to come by
The biotechnology industry in South Africa is small by international standards but has a substantial pipeline of potential new products and processes in the research and development stage. South Africa has great potential for the further development of the industry with the following contributing factors in its favour: - a sophisticated and lengthy tradition of first generation biotechnology - world-class researchers and research institutions - a pipeline of projects that could lead to new products or processes - an unrivalled biodiversity and biological resource base - indigenous medical knowledge going back centuries - access to a large human genetic diversity pool - access to a high number of clinical samples for major infectious diseases - a relatively low cost base for research, product development and manufacturing - a sound legal and regulatory framework, and a world-class banking system and ICT infrastructure
Despite these factors, IP generation and technology transfer in the biotechnology field to date have been slow and inefficient. The major factors inhibiting the biotechnology industry to date include: - a general lack of cohesion in research programmes - a shortage of market-focused research and a relatively low tendency among academics to commercialize research - a scarcity of suitably qualified R&D personnel, particularly at the MSc and PhD levels - a lack of clear IP policies that incentivize commercialization - an overall lack of confidence in African governments, which affects foreign investment - an increasing dependence on imported products, machinery, equipment, materials and technologies
National Biotech Survey 2003 3 - a relatively small local market - a severe shortage of entrepreneurial and technology transfer skills and mechanisms - insufficient public and private funding for research and product commercialization
Biotechnology activities in South Africa span the full pipeline from fundamental research to product development and commercialization, and include services that make use of biotechnologies as well as support services for biotechnology stakeholders. For the purposes of the survey, stakeholders were divided into the following categories: Research stakeholders Research projects • biotech projects/stakeholders - projects that are specifically intended to develop a new product or process for application in industry • potential biotech projects/stakeholders - projects that are not directly aimed at developing a new product or service but have potential applications in industry • biotech services - projects in which a service is provided in biotechnology, e.g. specific clinical trials, technology platforms etc. Biotechnology Companies • Core biotechnology companies - companies whose business is entirely or substantially biotechnology related and that have a significant commitment to technological innovation • Non-core biotechnology companies - companies that do not have biotechnology as their core focus but utilize biotechnology in some aspects of their general business activities or participate in biotechnology research and development
Biotechnology can be used in a large number of different industries and processes. A comprehensive review of all potential companies in South Africa that may utilize biotechnology to some degree was beyond the scope of this survey. Instead, the survey has concentrated on core biotechnology companies and companies that are participating in or co-funding biotechnology research and development. It is therefore unlikely that the database includes all non-core biotechnology companies in SA.
The survey identified 106 companies participating in biotechnology activities, including 47 core and 59 non-core biotechnology companies/organizations. Emphasis was placed on the modern biotechnology companies; therefore the list does not include the larger brewing, food & beverage, and wine companies, unless they are involved in developing innovative products using modern technologies. The majority of core biotechnology companies are situated in Gauteng (41%) and the Western Cape (37%). Kwazulu Natal also boasts a number of core biotechnology companies (15%), while the rest of the provinces do not feature significantly in this sample. The human health sector has the highest representation in terms of numbers of core biotechnology companies (39%), followed by the support services sector (13%). The rest of the companies are fairly evenly spread across the plant, animal health, food & beverage, industrial, and environmental sectors, with a small proportion of companies (3%) contributing to the “other” category.
National Biotech Survey 2003 4 At least 59 non-core biotechnology companies were identified. The majority of non-core biotechnology companies in the sample are situated in Gauteng (38%) and the Western Cape (37%), and are active in the plant sector (26%). The second largest sectors represented in this sample are the human health and industrial sectors (15% each).
A relatively small number of core biotechnology companies were established before 1986, followed by a period of inactivity in the late 1980’s and early 1990’s, and a relatively steady start-up rate of, on average, 2 new companies per annum between 1992 and the present. An analysis of 40 core biotechnology companies reveals a relatively even distribution of new start-ups, spin-offs from research groups, and spin-offs from another enterprise. Research groups represent an important source of new innovations for commercialization in the future. In line with international trends, the majority of core biotechnology companies in SA are relatively small, i.e. have a staff complement of less than 50.
The majority of core and non-core biotechnology companies in SA are involved in either the extraction or production of products using relatively “low-tech,” though modern methods. In many of these cases, the novelty is in the application of the products to new problems. This result reveals the hidden danger of excessive focus on terms such as 3rd generation biotechnology in the SA context, since our historic advantage is built on 1st generation biotechnologies, some of which are highly sophisticated and globally competitive.
A total of 622 research groups were identified as being involved in biotechnology-related activities, with 296 classified as “biotech,” 205 as “potential biotech,” and 178 as “biotech services”. 57 of the stakeholders in the latter group overlap with “biotech” and “potential biotech” stakeholders. The majority of relevant research stakeholders are operating from the Western Cape, followed by Gauteng, Kwazulu Natal and the Free State. Researchers developing biotechnology products are working predominantly in the human health sector, followed by the plant, industrial, and food & beverage sectors, in that order. Group leaders within departments were targeted in the survey, rather than only department heads, therefore the majority of the research groups are small, i.e. consist of 1- 10 people.
A total of 911 projects relevant to biotechnology were identified, including projects undertaken by both research and industry stakeholders. The majority of research projects are being conducted in the Western Cape, followed by Gauteng, Kwazulu Natal and Free State; while the dominant sector in terms of projects aimed at developing a product, is plant biotechnology, followed by human health and industrial. Research projects that have the potential to lead to a product fall predominantly within the human health sector, followed by the plant sector.
The overall dominant focus areas for each of the sectors are as follows: - human health - therapeutics, diagnostics, phytopharmaceuticals, natural health products and disease physiology - animal health - vaccines and diagnostics - plant - GM crops, plant propagation, traditional breeding, and biological control - food & beverage - food ingredients, food analysis, probiotics, nutraceuticals and food processing - industrial - enzymes, bioproduction and bioprocessing - environmental - waste treatment, bioremediation and water purification
National Biotech Survey 2003 5 - other - platform technologies, plant-based cosmetic products and aquaculture and mariculture - support services - product testing, core technology services, consulting, contract manufacture, and pilot production
Approximately 43% of the core and non-core biotechnology companies identified together employ a total of around 1020 staff in biotechnology-related activities, while approximately 26% of the research groups identified together employ a total of around 950 staff members/students that partake in biotechnology-related activities. Research groups and companies continue to be dominated by white researchers, though there is a less marked difference between the demographic groups in the companies. This indicates that the demographic transformation of research groups has not yet reached acceptable levels. Biotechnology companies show a relatively even distribution of employees by qualification. This is probably a function of the averaging out of R&D personnel and technical/production staff in a sample that includes R&D-intensive as well as production-orientated companies. As is to be expected, research groups are dominated by employees with at least a degree qualification, and frequently a post-graduate degree. Approximately 50% of companies and 81% of research stakeholders that participated in the survey indicated that they had experienced shortages in human resources. The majority of research stakeholders listed skilled scientists at various levels, particularly MSc’s and PhD’s, as being in short supply.
The biotechnology industry sector of biotechnology in South African is made up almost exclusively of private companies, most of which fall into the SMME category. There are relatively few exports to date, and this and other trade data is not readily available due to the crosscutting nature of the technology and a lack of appropriate classification. The bio-economy was therefore quantified in terms of numbers of companies, their annual turnovers, and revenues from products and services. The survey identified at least 106 companies participating in biotechnology activities with a total turnover for 2002 in excess of R300 million. More than 70% of the core biotechnology companies in this sample export their products or services.
At least 154 biotechnology products and/or services were identified, earning revenues of at least R368 million in 2002. The majority of these products fall under the human health (23%) and support services sectors (20%), followed by the plant sector (18%). These products/services include predominantly therapeutics, diagnostics, natural health products and phytopharmaceuticals in the human health sector; core technology services, contract research and contract manufacture in the support services sector; and GM crops, plant growth stimulants, and biological control products in the plant sector. 36% of the products and services listed involve first generation biotechnology, with only 10% involving genetic modification techniques.
At least 200 biotechnology-related patents were filed by SA inventors with the South African Registrar of Copyright Designs, Patents, Trade Marks between 1979 and 2002. SA registers around 100 patents per annum with the USPTO, however; only 65 biotechnology-related patents have been awarded to South African inventors between 1976 and the present. It is interesting to note that around 32% of these patents are assigned to non-South African entities. Approximately 86 Patent Co-operation Treaty (PCT) applications with South Africa listed as the inventor country were filed between 1986 and the present. These patent numbers are unlikely to represent the full complement of intellectual property, and particularly intellectual capital, emerging from SA.
National Biotech Survey 2003 6 Access to novel, cutting edge technologies and modern, state-of-the-art equipment is required for South African groups to compete globally. The majority of groups have access to generic, cross-cutting technologies such as cell or tissue culture facilities, general molecular biology technologies for DNA work and microbiology, and analytical techniques. The less widely accessible techniques are generally those that are more specialized and are likely to be required by a smaller number of groups. Future technology priorities emerging from the survey were DNA sequencing/synthesis/amplification techniques, cell/tissue culture, recombinant DNA technologies, bioinformatics, biochips, and molecular high throughput screening.
South Africa has a wealth of biological resources at its disposal that include a vast diversity of plant, animal and microbial life, an excess of clinical cases and pathology samples of globally important diseases such as HIV/AIDS, tuberculosis etc., and a human population that represents around 90% of the world’s genetic diversity. A number of research groups and companies have developed biological resource collections in the course of their work. A total of 42 such collections/centers were identified in the survey.
The biotechnology industry in SA is supported by a number of government departments, organizations and companies and is affected by health, biosafety and biodiversity legislation. The Department of Science and Technology (DST) is the lead department with respect to biotechnology (and R&D in general) in South Africa. DST is involved in the drafting and implementation of the National Biotechnology and National Research and Development Strategies, coordination of the GODISA programme, and overseeing the activities of the National Research Foundation (NRF), the major body responsible for funding research and human resource development at higher education institutes, and NACI, which is involved in managing and developing South Africa’s Innovation System. The South African National Biotechnology Strategy directly defines the Government’s intentions with respect to biotechnology, and the National Research and Development (R&D) Strategy modifies this slightly and contextualizes biotechnology within the broader intent of developing South Africa’s competitiveness in the global knowledge economy. The R&D strategy will be used to co-ordinate existing institutions and initiatives such as the biotechnology strategy and the incubation and economic development programmes, in order to improve the efficiency of South Africa’s R&D and innovation system. It depends on doubling government investment in science and technology over the next 3 years.
The Department of Trade and Industry (DTI) is focused on innovation and commercialization of biotechnology, although under the direction of DST. In particular the DTI is responsible for modification of the Patents Act and the establishment of a venture capital fund through its agency, the IDC. Support is provided in the form of funding through incentive schemes, information on potential markets, and marketing of local products abroad. The Department of Health will coordinate the National Bioethics Committee and advise the BAC. It is also responsible for the registration and regulation of medical products and the labeling of foodstuffs, e.g. the GMO content. The National Department of Agriculture implements the GMO Act and the Plant Breeders Act and is involved with the issues relating to indigenous knowledge systems. The Department of Environmental Affairs and Tourism is currently drafting the Biodiversity and the Protected Areas Bills, which aim to ensure the sustainable use of the country’s unique biodiversity. The Department of Labour (DoL) has committed to funding human resource development through the Skills Development Act and the Human Resources Development Strategy. A National Scarce Skills
National Biotech Survey 2003 7 Financial Assistance Scheme is currently being established by the NRF in partnership with the DoL and DST to address scarce skills, including those relevant to biotechnology. The Department of Education promotes curriculum development in line with the needs identified in the R&D strategy and determines the level of financial support of research at universities and technikons.
Legislation relevant to biotechnology includes the Patents Act of 1978 and two amendment bills passed in 1997, the Counterfeit goods bill and the Intellectual Property Laws Amendment bill; the Genetically Modified Organism Act, Act 15 of 1997; regulations for the labeling of food derived from genetic modification; the Cartagena Protocol on Biosafety; Act 36 of 1947 governing agricultural products; the Plant Breeders Act; the Biodiversity and Protected Areas Bills; and the Medicines Control Act no. 101 of 1965. In addition to the above legislation, South Africa has signed bilateral agreements with at least 12 countries that include co-operation on biotechnology
The total spend on support services in biotechnology for last year from those that provided this data was just over R2 million. This does not represent a significant market opportunity for the support services sector, and at present there are only a small number of dedicated biotechnology service providers. With the growth in the industry in response to government and other interventions, the demand for support services is set to grow. The survey identified at least 196 organizations and companies that currently offer direct or indirect support to biotechnology in SA, though only a small number of these are specific to biotechnology. These include entities that provide business or legal support, suppliers of raw materials and scientific tools, incubators, venture capital firms etc.
The most relevant support structures for the development of biotechnology in SA are the Biotechnology Regional Innovation Centres (BRICs), the National Bioinformatics Network, the GODISA-funded incubators, and the technology transfer offices associated with the universities. There are 4 BRICs in total, Cape Biotech, BioPAD, ECoBio, and PlantBio. An Inter-BRIC Forum allows collaboration between the BRICs and a forum for dealing with common issues. The National Bioinformatics Network (NBN) has been awarded funds by DST and the DoL for a period of three years to address the development of capacity and expertise in bioinformatics in SA. The GODISA Programme includes two incubators that focus on the biotechnology sector, eGoli Bio Life Sciences Incubator and Acorn Technologies. A small number of higher education institutions have a division designed to assist with the management and commercialization of research and IP emerging from the institution. Examples include UCT Innovation at the University of Cape Town; Unistel Technologies and the Office for Intellectual Property at the University of Stellenbosch; Research Enterprises at the University of Pretoria, and Wits Enterprise at the University of the Witwatersrand. The MRC and the ARC each have their own technology transfer offices responsible for the commercialization of IP generated by their respective units. In the private sector, there are a handful of companies offering dedicated biotechnology services, located predominantly in the Western Cape. In addition, there are a number of companies providing laboratory supplies, scientific equipment and raw materials to biotechnology stakeholders, though these service providers are not confined to the biotechnology industry.
National Biotech Survey 2003 8 Industry and government are the main funders of R&D in SA. The total estimated gross expenditure on science, engineering and technology R&D in 2000 was R5.725 billion, which amounted to 0.64% of GDP. Approximately 38% of core and non-core companies and 7% of research stakeholders were responsible for an estimated total spending on biotechnology of more than R280 million for 2002. In addition to this, R11.6 from the Innovation Fund was allocated to biotechnology projects in 2002, and R42 million was invested by South Africa’s only biotechnology-specific venture capital fund, Bioventures, in 2002 and the beginning of 2003. These estimates reflect at least a 50% increase in annual spending on biotechnology since 1998, i.e. over the last 4 years. Spending on biotechnology is set to increase further with a commitment in excess of R450 million from government for the BRICs over 4 years.
The results of the survey represent minimum figures for the described indicators. The challenges in defining and obtaining information on the industry have limited the extent of the data, and the results are reported within the constraints, with few assumptions being made. The survey has the potential, however, to serve as a quantitative baseline for measuring the growth of the industry over the coming years, particularly in response to new government interventions in the industry.
It was clear from the survey that South Africa has enormous potential with respect to biotechnology. The challenge is take advantage of the opportunities for the development of niche markets in which South African stakeholders can compete on a global scale. This can be facilitated by the creation of an enabling environment that allows stakeholders to maximize the benefit derived from the potential of biotechnology, whilst minimising the possible risks to the environment and human health. This enabling environment has to be developed in the context of South Africa’s particular circumstances and challenges, and must address the key financial, human resources and infrastructural deficits currently limiting the industry.
National Biotech Survey 2003 9 CONTENTS
Acknowledgements 14
Foreword 15
Abbreviations and Acronyms 16
SECTION A: INTRODUCTION 19 1. Definition of Biotechnology 19 2. The Importance of Biotechnology 20 3. The Global Biotechnology Industry 21 3.1 Size of the Global Biotechnology Industry 21 3.2 Biotechnology in Africa 21 3.3 Global Biotechnology Trends 21
SECTION B: THE NATIONAL BIOTECHNOLOGY SURVEY, 2003 23 1. Introduction 23 2. Methodology 23 2.1 Background to Methodology 23 2.2 Survey Sample 24 2.3 Survey Methodology 24 2.4 Definitions and Classifications Used for the Survey 25
SECTION C: GENERAL OVERVIEW OF BIOTECHNOLOGY IN SOUTH AFRICA 29 1. Background Information on Biotechnology in South Africa 29 2. Results of the National Biotechnology Survey 31 2.1 Stakeholder Participation in the Survey 31 2.2 Overview of Biotechnology Activities in South Africa 32 2.2.1 Number of Groups Active in Biotechnology 32 2.2.1.1 Analysis of Companies Active in Biotechnology 32 2.2.1.2 Research Groups Active in Biotechnology 38 2.2.2 Biotechnology Research Projects 40 2.2.3 Human Resources in Biotechnology 43 2.2.4 Size of the Bio-economy in South Africa 46 2.2.5 Intellectual Property 51 2.2.6 Technology Platforms 54 2.2.7 Biological Resources 58
National Biotech Survey 2003 10 SECTION D: The Biotechnology Industry Environment in South Africa 62 1. Government Involvement in Biotechnology 62 1.1 Department of Science and Technology (DST) 62 1.1.1 South African National Biotechnology Strategy, 2001 62 1.1.2 National Research and Development (R&D) Strategy 63 1.1.3 Biotechnology Road Mapping Exercise 65 1.1.4 GODISA Incubator Programme 66 1.1.5 National Advisory Council on Innovation (NACI) 66 1.1.6 National Research Foundation (NRF) 66 1.2 Department of Trade and Industry (DTI) 67 1.3 Department of Health (DoH) 67 1.4 National Department of Agriculture (NDA) 67 1.5 Department of Environmental Affairs and Tourism (DEAT) 68 1.6 Department of Labour (DoL) 68 1.7 Department of Education (DoE) 68 1.8 Legislation Relevant to Biotechnology 69 2. Support Services for Biotechnology 70 2.1 Market Opportunity for Support Services 70 2.2 Existing Support Services for Biotechnology 71 2.2.1 Biotechnology Regional Innovation Centres 71 2.2.1.1 BioPAD 72 2.2.1.2 Cape Bio 72 2.2.1.3 ECoBio 73 2.2.1.4 PlantBio 74 2.2.2 National Bioinformatics Network (NBN) 74 2.2.3 GODISA-Funded Incubators 75 2.2.3.1 eGoli Bio Life Sciences Incubator 75 2.2.3.2 Acorn Technologies 75 2.2.4 Other Support Services 76 2.2.4.1 Technology Transfer Offices at Universities 76 2.2.4.2 South African Research and Innovation Managers Association (SARIMA) 77 2.2.4.3 Africa Bio 77 2.2.4.4 A Harvest Biotech Foundation International 77 2.2.4.5 Biotechnology-Specific Service Providers 77 2.2.4.6 Technology Parks 78 3. Funding for Biotechnology 78 3.1 Funding for R&D in SA 79 3.2 Sources of Public Funding for Biotechnology 80 3.2.1 Biotechnology-specific public funding 81
National Biotech Survey 2003 11 3.2.2 Non-biotechnology-specific public funding 81 3.2.2.1 Incentives for R&D and Innovation 81 3.2.2.2 Incentives for Enterprise Development 82 3.2.2.3 Competitiveness and Export Incentives 82 3.2.2.4 Industrial development zones (IDZ) 82 3.2.2.5 European Union Sixth Framework Programme (EU6FP) 82 3.3 Private Funding for Biotechnology 83 3.3.1 Seed Capital 83 3.3.2 Venture Capital and Private Equity 83 3.4 Foreign Sources of Funding for Biotechnology 84
SECTION E: BIOTECHNOLOGY ACTIVITIES IN SOUTH AFRICA BY SECTOR 86 1. Human Health 86 1.1 The Application of Biotechnology to the Human Health Sector 86 1.2 Human Health Biotechnology in South Africa 86 2. Animal Health 89 2.1 The Application of Biotechnology to the Animal Health Sector 89 2.2 Animal Health Biotechnology in South Africa 90 3. Plant Biotechnology 93 3.1 The Application of Biotechnology to the Plant/Agricultural Sector 93 3.2 Plant Biotechnology in South Africa 94 4. Food & Beverage 97 4.1 The Application of Biotechnology to the Food & Beverage Sector 97 4.2 Food & Beverage Biotechnology in South Africa 97 5. Industrial Biotechnology 101 5.1 The Application of Biotechnology to the Industrial Sector 101 5.2 Industrial Biotechnology in South Africa 101 6. Environmental Biotechnology 104 6.1 The Application of Biotechnology to the Environmental Sector 104 6.2 Environmental biotechnology in South Africa 105 7. Other Biotechnology Focus Areas 108 7.1 Other Applications of Biotechnology 108 7.2 Other Applications of Biotechnology in South Africa 108 8. Support Services for Biotechnology 111
SECTION F: BIOTECHNOLOGY ACTIVITIES IN SOUTH AFRICA BY REGION 115 1. Gauteng 115 2. Western Cape 117
National Biotech Survey 2003 12 3. Kwazulu Natal 119 4. Eastern Cape 120 5. Free State 121
SECTION G: CONCLUSIONS 123
REFERENCES 124
APPENDIX A: CLASSIFICATIONS USED IN THE SURVEY 126 APPENDIX B: INTERNATIONAL PATENT CLASSIFICATIONS RELEVANT TO BIOTECHNOLOGY 131
National Biotech Survey 2003 13 ACKNOWLEDGEMENTS
I would like to acknowledge the input and support provided by eGoli Bio Life Sciences Incubator and the work conducted by Faghri February (PhD student), Morne Du Plessis (M.Sc student in Human Genetics), Tumelo Seameco (M.Sc student in Apoptosis), and Kaunda Kuanda (Undergraduate student) from the University of the Western Cape, who had the unenviable task of following up stakeholders telephonically.
This survey was sponsored by the Department of Science and Technology and eGoli Bio Life Sciences Incubator.
Please Note: All care and diligence has been taken in the compiling, processing and analysis of data for this report; however, Idea to Industry cc gives no warranty that the information or data supplied contains no errors. Idea to Industry cc shall not be liable for any loss or damages suffered by the Department of Science and Technology or eGoli Bio Life Sciences Incubator consequent upon the direct or indirect use of the information supplied in this report.
National Biotech Survey 2003 14 FOREWORD
Very little information has been published to date on the biotechnology industry in South Africa (SA). In 1993 the Foundation for Research Development (FRD) carried out a survey of active biotechnology projects in order to determine the level of biotechnology activity in the country. The survey was repeated in 1995 by Innovation Biotechnology and was used to publish the ‘Directory of Biotechnology in South Africa.’ This was updated a year later. The directory was aimed at supporting networking between biotechnology interest groups both within South Africa and with its neighbours. In 1998, the Council for Scientific and Industrial Research (CSIR) commissioned ProBio to undertake a review of biotechnology in South Africa in order to inform the organization’s ‘Biology Beyond 2000’ report (30). This data was subsequently used to update the FRD directory, which was posted on the National Research Foundation’s (NRF) website http://www.nrf.a c.za/ ).
This present survey aims to build on and update the previous survey results in order to establish the current state of the biotechnology industry in SA. The results of this survey will also serve as a quantitative baseline for measuring the growth of the industry over the coming years, in particular, the impact of the new measures being undertaken by the Department of Science and Technology (DST) to stimulate the bio-economy in South Africa (19; 22). In addition, the information will be used: • by international parties looking to form partnerships with local groups, • for marketing of existing biotechnology products and services offered by private sector companies, • by policy developers and planners to establish working groups and create an enabling environment, • by government to react to and communicate with biotechnology stakeholders, • by researchers to network effectively within and between sectors, • by biotechnology stakeholders as a benchmark against which the impact of the SA Biotechnology Strategy can be assessed in the next 4-10 years, and • by investors to assess opportunities, gaps and risks.
This report provides an outline of the biotechnology industry in South Africa, and covers activities in academia, industry, government, and support organizations, based on both primary and secondary research. The definition, importance and characteristics of a biotechnology industry are discussed. The methodology used for the survey is outlined, followed by an in-depth discussion of the results with conclusions and recommendations. A general overview of the results is provided, as well as a more detailed analysis of biotechnology activities in SA by sector and region. We do not expect to have 100% coverage of the industry; however, our investigations have been as broad as possible to ensure wide coverage of the major activities in biotechnology in SA and to give an informed overview of the current state of the industry. Every attempt has been made to be as objective and as accurate as possible. Stakeholders who have not participated in the survey or have not been reached are encouraged to contact eGoli Bio or Idea to Industry with any information that has been omitted.
National Biotech Survey 2003 15 ABBREVIA TIO NS AND AC RO NYMS
ACGT African Centre for Gene Technologies ARC Agricultural Research Council BAC Biotechnology Advisory Committee BBP Bumble Bee Programme BLCF Business Linkage Challenge Fund BRC Biological Resource Centre BRIC Biotechnology Regional Innovation Centre CF Competitiveness Fund CIP Critical Infrastructure Programme COS Community of Sciences CSIR Council for Scientific and Industrial Research DACST Department of Arts, Culture, Science and Technology DEAT Department of Environmental Affairs and Tourism DNA Deoxyribonucleic Acid DoH Department of Health DoL Department of Labour DST Department of Science and Technology DTI Department of Trade and Industry EIFAS Export Investment Financial Assistance Scheme EMEA European Medicines Evaluation Agency EPO European Patent Office EU European Union EU6FP European Union Sixth Framework Programme EC Executive Council FABI Forestry and Agricultural Biotechnology Institute FDA Food and Drug Administration FEST Foundation for Education, Science and Technology FRD Foundation for Research Development FTI Foundation for Technological Innovation GLP Good Laboratory Practice GMP Good Manufacturing Practice GMOs Genetically Modified Organisms HEI Higher Education Institute HIV/AIDS Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome HS Harmonization System HSRC Human Sciences Research Council IDC Industrial Development Corporation IDEA Initiative for Developing Enterprising Activities
National Biotech Survey 2003 16 IDZ Industrial Development Zones IF Innovation Fund IFC International Finance Corporation IP Intellectual Property IPC International Patent Classification IPF Intellectual Property Fund LMO Living Modified Organism MRC Medical Research Council NACI National Advisory Council on Innovation NBN National Bioinformatics Network NDA National Department of Agriculture NGO Non-governmental Organization NRF National Research Foundation NSI National System of Innovation IPO Initial Public Offering OECD Organization for Economic Cooperation and Development OVI Onderstepoort Veterinary Institute PCR Polymerase Chain Reaction PCT Patent Co-operation Treaty PII Partnership in Industrial Innovation PROMEC Programme on Mycotoxins and Experimental Carcinogenesis PUB Public Understanding of Biotechnology R&D Research and Development RTP Regional Technology Platform RU Rhodes University SA South Africa SAAVI South African AIDS Vaccine Initiative SABS South African Bureau of Standards SADC South African Development Community SANBI South African National Bioinformatics Institute SARIMA South African Research and Innovation Managers Association SET Science, Engineering and Technology SIP Strategic Investment Programme SMEDP Small and Medium Enterprise Development Programme SMMEs Small, Medium and Micro-Enterprises SPF Sector Partnership Fund SPII Support Programme for Industrial Innovation SSP Skills Support Programme TB Tuberculosis THRIP Technology and Human Resources for Industry Programme TISA Trade and Investment South Africa
National Biotech Survey 2003 17 TRIPS Agreement on Trade-Related Aspects of Intellectual Property Rights UCT University of Cape Town UNISA University of South Africa UP University of Pretoria US University of Stellenbosch USA United States of America USPTO United States Patents and Trademarks Office UWC University of the Western Cape VC Venture capital VETPLAN Vaccines and Enhanced Therapeutics Platform for Animals Wits University of the Witwatersrand
National Biotech Survey 2003 18 SECTION A: INTRODUCTION 1. Definition of Biotechnology
Biotechnology is a cross-cutting technology, which supports innovation in health, agriculture, food processing, industry and environmental management. It can be simply defined as the application of technology to utilize or modify living organisms for a particular benefit, such as the production of new knowledge, products, processes or services.
The South African National Biotechnology Strategy (19) defines biotechnology as “a set of technologies including, but not confined to, tissue culture and recombinant DNA techniques, bioinformatics and genomics, proteomics and structural biology, and all other techniques employed for the genetic modification of living organisms, used to exploit and modify living organisms so as to produce new intellectual property, tools, goods, products and services.” Biotechnology can encompass technologies at various biological levels including: - DNA: genomics, pharmaco-genetics, gene probes, DNA sequencing/synthesis/amplification, genetic engineering - Proteins and molecules: protein/peptide sequencing/synthesis, proteomics, lipid/protein/carbohydrate engineering, hormones and growth factors, cell receptors/signaling/pheromones - Cell and tissue culture and engineering: cell/tissue culture, tissue engineering, hybridization, cellular fusion, vaccines/immune stimulants, embryo manipulation - Process biotechnologies: Bioreactors, fermentation, bioprocessing, bioleaching, bio-pulping, bio-bleaching, biodesulphurization, bioremediation, and biofiltration - Sub-cellular organisms: gene therapy, viral vectors (18)
Biotechnology is typically classified as either first, second or third generation. First generation biotechnology involves the use of wild type or natural biological organisms to produce a product, for example, the use of yeast to make beer or wine. Second generation biotechnology refers to the production of specific products using a pure cell or tissue culture of organisms that have been specifically selected, through random cross-breeding or similar techniques, for their superior production or expression abilities without introducing foreign DNA. Third generation biotechnology involves manipulation of the genetic make-up of organisms, by introducing selected foreign (across the species barrier) DNA, through recombinant DNA technology, to make them produce small molecules, compounds or proteins they would not normally produce. More recently, first and second generation biotechnology have been referred to as ‘old biotechnology’ and third generation biotechnology has been referred to as ‘new biotechnology’ or ‘modern biotechnology.’
Biotechnology activities also include the support services that do not directly make use of biotechnology activities but provide essential support to those groups that do, e.g. legal services, business and financial support, equipment and reagent supplies etc. This group also includes organizations that form an essential part of the product/process development value chain in biotechnology, for example, clinical trial organizations, organizations conducting field trials for genetically modified organisms (GMOs), groups offering molecular modeling, combinatorial chemistry and molecular synthesis for drug discovery, organizations that assist with process and plant design and engineering etc.
National Biotech Survey 2003 19 2. The Importance of Biotechnology
Biotechnology is not a new field. The biological processes of microorganisms have been used for more than 5000 years to produce food and beverages such as bread, cheese, wine, etc., and to preserve dairy products. However, it was only during the 1960s and '70s that our understanding of biology reached a point where we could begin to use the cellular and molecular processes of organisms, in addition to using whole organisms, and to expand the use of biology to new products and processes.
A number of key scientific milestones in the second half of the twentieth century played a direct role in the rapid development of molecular biology techniques and modern biotechnology. In 1953, Watson and Crick announced their discovery of the double helix DNA structure, followed in 1964 by the demonstration that the sequence of nucleotides in DNA corresponds exactly to the sequence of amino acids in proteins, by scientists at Stanford. The first genetic engineering event was the insertion of a gene from another species into a bacterial DNA in 1973, by Stanley Cohen and Herbert Boyer. This was followed in 1982 by the first Food and Drug Administration (FDA) approval of a genetically engineered drug, a form of human insulin produced by bacteria. The development of the polymerase chain reaction (PCR) by Kary Mullis of Cetus in 1983, and the discovery of restriction enzymes have had a particularly significant effect on recombinant DNA technologies. The international Human Genome Project was launched in 1990, and the first complete draft of the Human Genome was released 10 years later, in 2000. Other significant milestones in this period include the cloning of Dolly the sheep in 1997, and early successes in the growing and differentiation of human embryonic stem cells in the late 1990’s (23). New technologies and scientific breakthroughs continue to emerge at an elevated rate, as do their potential applications in biotechnology.
As we move from a resource-based, industrial, manufacturing economy to a high technology, knowledge-based economy, biotechnology will play an increasingly important role in shaping economies. Biotechnology has wide applications in major economic sectors such as health, food production and processing, industrial processing and mining, agriculture and mariculture, environmental management etc., and a successful biotechnology industry has the potential to impact positively on the social and economic development of a country such as South Africa (SA). It can be used, in part, to address many of the major challenges facing the developing world, including food security through the development of genetically engineered crops that are more robust and have added nutritional benefits; affordable health care through the development of vaccines, rapid diagnostics and treatments for diseases such as HIV/AIDS, malaria and tuberculosis; and environmental sustainability through novel bioremediation or waste utilization processes that minimize environmental impact. The major advantage of using biotechnology is that cells and biological molecules are extraordinarily specific in their interactions, thus enabling the precise and predictable solution of specific problems, with fewer side effects and unintended consequences.
Biotechnology provides a tool that can be used to address a number of government imperatives. It is recognized as a high profit-generating activity, capable of contributing rapidly to economic growth as well as sustainable development for poverty alleviation. The development of the biotechnology industry is likely to lead to new small, medium and micro-enterprises (SMMEs) providing employment at different levels of expertise. A biotechnology industry also has the potential to address some of the historical and socio-economic imbalances in SA through skilled job creation, international partnering for skills transfer and export opportunities, improved research and commercialization capacity, and increased foreign direct investment. Furthermore, a substantial and successful
National Biotech Survey 2003 20 biotechnology industry will attract young students to science and technology education, as well as attracting the skilled scientists, engineers and entrepreneurs who have left South Africa to explore career development opportunities abroad, back into the country, thereby building globally relevant and competitive capacity.
3. The Global Biotechnology Industry
3.1 Size of the Global Biotechnology Industry The global biotechnology industry is substantial in size and has experienced high growth in the past. According to the latest Ernst &Young global biotechnology report (7), biotechnology companies generated more than US$41 billion in revenues in 2002, with US companies making up US$30 billion of this. There were just over 4300 biotech companies worldwide employing more than 193 000 people and spending US$22 billion on R&D. In total, companies recorded a loss of US$12 billion in the same year (7). According to BioWorld Financial Watch, a total of US$14 billion was invested in the biotechnology industry in 2001, broken down as follows: US$3.8 billion private companies, US$3.7 public offerings, and US$6.9 other financings (2). The biotechnology industry has been affected by the global slump in the markets; however, is has been pointed out that the sector “is at the beginning of a technology curve whose upside potential appears limitless” (7).
3.2 Biotechnology in Africa There is very little data available on the biotechnology industry in Africa; however, it is clear that, in general, the biotechnology industry on this continent lags far behind that of the developed world. Biotechnology research and development is conducted in most countries in sub-Saharan Africa, though the extent and focus varies from country to country. A number of countries have confined their biotechnology activities to traditional techniques such as fermentation, e.g. Somalia, Eritrea, Burundi, Sudan, while others, such as Tanzania, Zambia, Nigeria, Ghana, Ethiopia and Namibia, are using second-generation biotechnology such as tissue culture and in vitro techniques. South Africa, Egypt, Kenya and Zimbabwe are among the few countries in Africa engaging in third generation biotechnology using genetic engineering techniques. Biotechnology activities in most African countries are dominated by international, regional and national research institutions and universities, with very limited private sector involvement (3).
3.3 Global Biotechnology Trends The global biotechnology industry has grown and evolved dramatically over the last two decades. It is vital that South Africa pays careful attention to global trends in the industry in order to identify niches, to become globally competitive, and to learn from the mistakes of those who have gone before. Ernst and Young has identified a number of major global biotechnology trends in their Global Biotechnology 2002 report (6), some of which are listed below. These trends represent the ‘playing rules’ of global biotechnology competitiveness, and need to be carefully considered and interpreted by biotechnology stakeholders in SA.
The global economic slump is causing consolidation in the biotech industry in place of rapid growth, aggressive venture funding and initial public offerings (IPOs) Biotechnology companies are increasingly surviving through a short to medium-term focus on production and sales, in place of rapid innovation development and licensing or sale as an exit strategy. This allows them to retain global marketing rights to their core products, which builds more sustainable companies in the long-
National Biotech Survey 2003 21 term. The most successful biotechnology companies in terms of attracting investments appear to combine a platform technology with a market-ready product pipeline There is a strong demand for innovative products that reduce the medical and social costs of disease, fuelled by the recognition that sustainable development of developed countries includes taking care of public health and socio-economic challenges in developing countries. There is pressure to ensure equitable access to new biotechnological products and services, particularly in the case of basic or pandemic health care, but also to ensure access to breakthrough therapies for rare diseases, particularly in developing regions The trend towards personalized medicine has resulted in the development of many biopharma companies providing niche services that compete successfully with and, to some extent, threaten large pharmaceutical companies There is a growing intent to harmonize regulation on a global scale. The Japanese Ministry of Health is moving to harmonizing with the FDA, which will make the second largest market for biopharmaceuticals globally more accessible. The product registration process in Europe has improved dramatically with the establishment of the European Medicines Evaluation Agency (EMEA), opening up a large market rivaling that of the USA. The enactment of the Orphan Medicinal Products Directive has both incentivised companies to seek rapid marketing approval for their products in Europe and created opportunities in relatively unpopular, but significant, markets for products addressing rare diseases Although still volatile, the Latin American market with a population approaching 500 Million is beginning to command attention Biotechnology companies are increasingly looking to foreign countries for manufacturing, offering a combination of proximity to attractive markets, attractive economic incentives and skilled work forces Scientific and technical competitiveness is intricately linked to global collaborative arrangements. This specifically includes clinical research Competitive drug discovery is increasingly reliant on the speed to market, which necessitates awareness of global technologies available to achieve this goal The management of biotechnology companies is having to be astute in managing limited resources and collaborating pre-competitively to decrease costs Ethical and guiding principles relating to both biotechnology and business are becoming entrenched and are a prerequisite to sustainability. Ethical and public cross-roads have been reached with respect to stem cell and therapeutic cloning research and commercialization, with no certain direction Globalization increases the need for, awareness of, and sensitivity to local regulatory and market characteristics and diverse cultures and specific medical needs Securing and protecting global intellectual property (IP) rights is becoming increasingly important in order to address developing country needs, with TRIPS being a significant step in this direction Europe and Japan continue to resist GMO applications in food crops and plants The knowledge workforce is mobile and demands workplace quality beyond remuneration (6)
National Biotech Survey 2003 22 Section B: The National Biotechnology Survey , 2003 1. Introduction
In April 2003, the Department of Science and Technology (DST) and eGoli Bio Life Sciences Incubator (eGoli Bio) commissioned a National Biotechnology Survey for the purposes of: • identifying private entities currently offering or developing biotechnology products or services in South Africa • identifying the key biotechnology research organizations (including tertiary education institutes) and activities in South Africa • identifying and quantifying the market opportunity for the support services component of the national biotechnology sector • quantifying the approximate extent of the South African bio-economy in terms of total turnover, earnings, employment and number of companies • quantifying the approximate extent of biotechnology research including total number of projects, turnover and anticipated outcomes • identifying sources of funding including local and international public and private sectors, such as donors, private equity and venture capital. The results of the survey, reported here, have the potential to serve as a quantitative baseline for measuring the growth of the industry over the coming years, in particular, the impact of the new measures being undertaken by the Department of Science and Technology to stimulate the bio-economy in South Africa (19; 22).
2. Methodology
2.1 Background to Methodology In deciding on the methodology for the survey and drawing up the required questionnaires, careful attention was paid to the compatibility of the results with global biotechnology statistics and the indicators required by the end users. In order to measure the success of the biotechnology industry in SA, it is vital that we are able to compare key indicators with those of the biotechnology sectors in other countries. Thus, the definition of biotechnology used and the survey methodology were guided by previous international biotechnology surveys.
The Organization for Economic Cooperation and Development (OECD) has published two manuals that guide the collection and analysis of data for research and development (R&D) surveys in OECD countries, the Frascati and Oslo Manuals ( www.oe cd.or g ). The Frascati Manual guides the measurement of R&D inputs and has been used by the Human Sciences Research Council (HSRC) in their ongoing R&D survey ( www.hs rc.ac.za ), while the Oslo Manual guides the measurement of R&D outputs. The latter guide is being used in an innovation survey in Gauteng. Neither of these manuals provides suitable guidance for a biotechnology survey. The OECD has published a Compendium of Existing National Biotechnology Statistics (28), which aims to highlight the types of biotechnology data that are currently available and to encourage the future collection of internationally comparable statistics on biotechnology. They have presented the range of indicators that can be produced from existing statistics, as well as some of the statistical and methodological problems that exist in the current data. These include: how to define biotechnology, which sector (public or private) should be the target of measurement, differences of coverage
National Biotech Survey 2003 23 among national surveys and the classification of biotechnology international trade and patent data. To date there has been no uniform definition of biotechnology used in country surveys of the sector. The OECD has published a Discussion Paper in which it suggests uniform biotechnology definitions (18). The paper stresses that biotechnology refers to a set of processes or technologies and is not an industry or output, therefore one cannot use a statistical industry-based framework for analysis.
2.2 Survey Sample The OECD splits biotechnology into “old” biotechnology, which refers to fermentation-type biotechnology, and “new” or “modern” biotechnology, which refers to the use of DNA manipulation technologies. Most of the country surveys reported in the OECD compendium limit their survey population to those groups active in 3rd generation or modern biotechnology (18). In this present survey, both old and new biotechnology activities were examined on the research side, however, as with biotechnology surveys from other countries, the business activities of the larger traditional biotechnology companies such as the large breweries and yeast manufacturers, dairy processing companies, baking companies, wine producers etc., were not explored. Many of these companies are multinationals earning revenues in excess of R1 billion and their inclusion in the quoted figures would skew the results considerably. In addition, these companies are not the targets of new government interventions in the biotechnology industry in SA.
In Phase 1 of the survey, a list of existing biotechnology companies, projects, government groups, funding sources, key research organizations, researchers, and support services in South Africa was compiled from Idea to Industry’s own databases and secondary research sources, including: the previous South African biotechnology survey and directories, web searches, Biotechnology Regional Innovation Centre (BRIC), National Research Foundation (NRF) and Technology and Human Resources for Industry Programme (THRIP) project lists, the websites of South African tertiary institutes and research councils, Chambers of Commerce, related industry organizations and export councils (e.g. for pharmaceuticals, cosmetics, food, etc.), patent applications etc. The total numbers of potential biotechnology stakeholders identified were as follows: 1032 research groups, 106 companies, 1494 research projects, and 196 support service groups, including venture capital and private equity firms, government, and non- governmental and private organizations/departments.
2.3 Survey Methodology The OECD defines organizations “using biotechnology” as those that use a set of techniques leading to the transformation of a substance or production of a product, and where living organisms, or parts thereof, are involved. The living material may be the object that is transformed or produced or may be used in the manipulation or production process (18). This definition was used to identify stakeholders that should be targeted with the questionnaire or with interviews. A stakeholder was defined for these purposes, as any individual or organization that has an interest in or participates in biotechnology activities. The definition purposely did not specify a commercial intent in order to gain primary information on research groups and projects that may not be directed towards a product at present but have the potential to feed into the biotechnology industry in the future. Unfortunately a number of stakeholders declined to participate on the basis that they did not consider themselves to be “biotechnology” stakeholders, even though it is clear from the projects they are involved in that there is some commercial potential in their research. Although this may have been due to poor commitment in some cases, it is more likely a function of the challenge in defining the boundaries of biotechnology activities.
National Biotech Survey 2003 24 Secondary data was gathered on as many of the stakeholders as possible. An email questionnaire and interviews were used to confirm and update this information. The questionnaires used were guided by the Compendium of Existing National Biotechnology Statistics published by OECD (28), as well as the biotechnology surveys from Finland, Canada, and New Zealand (10; 20; 21), but were limited to the information specifically requested in the terms of reference for the survey as well as information required for DST’s Road Mapping Exercise. The questionnaires for the different stakeholder types differed slightly in the information requested. Questionnaires were emailed to 942 research groups and 87 companies believed to participate in biotechnology activities. A deadline for return of completed questionnaires was included to encourage stakeholders to attend to the questionnaire timeously, and was extended due to end-of-term time pressures on academics. Post-graduate Biotechnology students from the University of the Western Cape (UWC) were employed to follow up with research stakeholders telephonically and in-person, where necessary. Attempts were made to contact all stakeholders on the list, with particular emphasis on those that were clearly involved in developing and commercializing a product or process, and to encourage a response to the questionnaire.
The majority of companies were initially targeted for interviews; however, a number of them indicated their preference to participate in the electronic survey. In-person interviews were conducted with 26 core biotechnology companies, 12 non-core biotechnology companies, 22 support service organizations/funders, and 7 research groups. Telephonic interviews were carried out with 3 biotechnology companies, 16 research groups, and 4 support service organizations/funders. In general, only the major biotechnology-specific companies providing support services were interviewed. Information on government groups active in biotechnology was obtained from the relevant websites, publications and strategy documents.
Due to the sensitivity of the information submitted by stakeholders for the survey, the confidentiality of the information will be maintained by eGoli BIO, DST and Idea to Industry. Only the aggregated data from the survey has been used in this report. No information on, or identifiable with, individual companies or organizations has been used, except where this information is publicly available, i.e. on websites, brochures, public reports etc., or where approval has been given by the organization in question.
2.4 Definitions and Classifications Used for the Survey Defining biotechnology and drawing the boundaries for the purposes of the survey were extremely challenging, particularly with respect to research groups and projects. Almost all research in molecular biology and medical disciplines such as pharmacology, human genetics, immunology, haematology, chemical pathology etc., as well some aspects of research in engineering, botany, zoology, agricultural and soil sciences, food science, entomology etc. has the potential to contribute to or utilize biotechnology to some degree. Since it is not practical or informative to report on all such research being conducted in SA, we have attempted to classify research projects, and their respective programme leaders, into the following 4 categories: • biotech projects/stakeholders - projects that are specifically intended to develop a new product or process for application in industry • potential biotech projects/stakeholders - projects that are not directly aimed at developing a new product or service but have potential applications in industry
National Biotech Survey 2003 25 • biotech services - projects in which a service is provided in biotechnology, e.g. specific clinical trials, technology platforms etc. • fundamental research - projects that are not likely to result in any products but provide a vital basis for the understanding of basic molecular biology, plant, human or animal processes, disease mechanisms, engineering and reaction principles etc.
The same labels are used to categorize the programme leaders associated with these research projects, i.e. research stakeholders. These research stakeholders include project or programme leaders from the higher education institutes and research councils in SA. The most relevant category for this study is the “biotech projects”. Many of these projects have been the subject of BRIC applications, have been awarded Innovation Fund grants, or are conducted in partnership with industry, as are a number of the “potential biotech projects.” In the discussion on biotechnology in SA in general, individual figures are given for the biotech projects, potential biotech projects and biotech services, while in the more detailed analyses by sector and region, the results for the 3 groups are combined.
Core biotechnology companies in the database are those whose business is entirely or substantially biotechnology related. The majority of these companies have a significant commitment to technological innovation. Non-core biotechnology companies include those companies that do not have biotechnology as their core focus but utilize biotechnology in some aspects of their general business activities or participate in biotechnology research and development. Biotechnology can be used in a large number of different industries for waste remediation, development of organic products, food processing, food safety monitoring, environmental monitoring, development and production of pharmaceuticals, fine chemicals and natural health products, development of aquaculture and mariculture methods and supplies etc. A comprehensive review of all companies from the chemical, pharmaceutical, minerals, food & beverage, agricultural products, natural products, cosmetics, aquaculture and mariculture industries that may utilize biotechnology to some degree is beyond the scope of this survey. Instead, the survey has concentrated on non-core biotechnology companies that are participating in or co-funding biotechnology research and development. It is therefore unlikely that the database includes all non-core biotechnology companies in SA.
Groups active in biotechnology can be classified according to the technologies they use or the sectors in which the outputs of the technologies are applied. There are a number of different ways in which the different technologies and sectors of biotechnology have been categorized in previous country surveys. The OECD has combined the technology classifications used in the French, Canadian and New Zealand surveys into one list (18). A slight variation of this list has been used in the questionnaire for this survey in order to map the capacity and shortfalls in technology platforms in SA (see Section C 2.2.6). The breakdown of biotechnology activities into output sectors in previous country surveys also varies widely. For the purposes of this survey, the biotechnology groups are classified according to the output sectors used by DST in the National Biotechnology Strategy (19), with a few additions, i.e. human health, animal health, industrial, environmental, plant, food and beverage, support services, and other. These are further subdivided into a number of focus areas (See Appendix A for a complete list).
National Biotech Survey 2003 26 Another level of classification used to categorize entries in the database is the type of biotechnology being used. The definitions of 1st, 2nd, and 3rd generation biotechnology and support services for biotechnology are given in section A.1. The difficulty in using these definitions is that a project needn’t be developing or working on genetically modified organisms to be using modern technologies. Thus, for example, a group using modern molecular technologies for the diagnosis of specific diseases or identification of the genetic basis of disease should, according to the definitions, be classified as 1st generation, since no actual genetic modification is occurring. Yet these projects may involve innovative and ground-breaking technologies. It therefore seems inappropriate to classify them together with projects that simply use yeast to produce beer. In addition, there are an increasing number of projects that involve the extraction of high value materials from plants, animals or microorganisms for use in health or industrial applications, which are not suitably categorized under existing groupings. For these reasons, we have developed the following categories and sub-categories for biotechnology type for use in the survey:
• Natural Products – Development and manufacture of products derived from natural living organisms or parts thereof, either directly or through extraction technologies, e.g. plant extracts, enzymes, seaweed products, algal products etc. • 1st Generation - Uses non-genetically modified and unselected living organisms or parts thereof Traditional Manufacturing – use of biotechnology in manufacturing or manufacturing of biotechnology products, e.g. yeast production; beer brewing; baking; wine production; dairy; manufacture of enzymes and biochemicals etc. Modern Technology – application of modern technologies to non-genetically modified and unselected living organisms or parts thereof, e.g. diagnostics using serology or DNA analysis; drug discovery on plant medicinals; process design for food processing; extraction or processing methods for natural products; design and testing of synthetic substances for use on natural organisms; drug delivery etc. New Application – use of non-genetically modified and unselected living organisms or parts thereof in new applications, e.g. naturally occurring microorganisms for biological control, waste remediation, bioprocessing, bioleaching, vaccines, probiotics etc.; biocatalysts for industrial processes; biofuels etc. • 2nd Generation - Uses living organisms that have been selected or bred for specific traits Novel Organism - development of improved organisms without genetic engineering, e.g. through marker- assisted breeding, conventional breeding techniques, selective pressure etc. Modern Technology – application of modern technologies to selected living organisms, e.g. as for 1st generation but living organisms used are generated through selective means New Application – use of selected living organisms in new applications, e.g. as for 1st generation but living organisms used are generated through selective means • 3rd Generation - Uses living organisms or parts thereof that have been genetically modified Novel Organism - development of genetically modified organisms using genetic engineering techniques Modern Technology – application of modern technologies to genetically modified living organisms or parts thereof, e.g. as for 1st generation but with GM organisms, e.g. viral vectors for drug delivery; recombinant vaccines etc. New Application – use of genetically modified living organisms or parts thereof in new applications, e.g. as for 1st generation but with GM organisms
National Biotech Survey 2003 27 • Technology Platform - Development or use of a novel or modern technology that can be applied to living organisms, e.g. imaging; bioinformatics; process control for fermentation or bioprocessing; physical technologies for diagnostics etc.; and core technologies such as sequencing; proteomics; microarrays etc. • Support Services - Services that provide support to biotechnology projects or companies, e.g. drug analysis; clinical trials; biosafety; contract or pilot scale manufacturing; raw material supplies; core technology services • etc.; or form part of biotechnology value chains, e.g. rational drug design; organic synthesis; combinatorial chemistry etc.
By classifying biotechnology groups and projects according to these groups, we are able to get a better idea of the level of sophistication of biotechnology activities in SA. Please note that, in some cases, insufficient information on a project was given to accurately assign biotechnology types.
National Biotech Survey 2003 28 SECTION C: GENERAL OVERVIEW OF BIOTECHNOLOGY IN SOUTH AFRICA 1. Background Information on Biotechnology in South Africa
According to the last survey done on biotechnology in SA (30), the total spend on biotechnology R&D until 1997 was R100 million, and until 1998 was approximately R200 million. This survey identified >600 biotechnology research projects and approximately 55 companies involved in biotechnology, spread across the biosafety, chemical, environmental, food, medical/pharmaceutical, plant, and veterinary sectors (30).
South Africa has been using modern molecular biology, genetic engineering, and chemical engineering techniques in research for decades, and yet very few local biotechnology products are currently on the market. By international standards, the biotechnology industry in South Africa is at present underdeveloped and lags far behind that of the European countries, the USA and other developed countries. It has, however, been acknowledged that our country has great potential for the successful development of such an industry. The positive aspects of the biotechnology industry in SA include: - a sophisticated and lengthy tradition of first generation biotechnology - world-class researchers and research institutions - a pipeline of projects that could lead to new products or processes - an unrivalled biodiversity and biological resource base - indigenous medical knowledge going back centuries - access to a large human genetic diversity pool - access to a high number of clinical samples for major infectious diseases - a relatively low cost base for research, product development and manufacturing - a sound legal and regulatory framework, and a world-class banking system and ICT infrastructure
South Africa has an advanced first generation biotechnology industry and its yeast, wine, and beer producers are amongst the finest in the world. In the private sector as well as in the tertiary education institutions, South Africa produces world-class researchers and products, and much intellectual property has been generated in its institutions. South Africa boasts a rich plant, and associated microbial, diversity that can be tapped into for biotechnology applications. Associated with this is a deep indigenous medical knowledge. Even today, approximately 80 – 85% of the population in SA relies on traditional medicines and on the 350 000 or so traditional healers in the country. The country also has access to African populations carrying 90% of the genetic diversity in the world. The high incidence of major infectious diseases such as HIV/AIDS, tuberculosis, malaria etc. in Africa has resulted in access to a large number of clinical and pathology samples with which to study these diseases and potential eradication strategies. SA has a well-developed agricultural industry, and the exceptional plant biodiversity provides significant opportunities for crop or product improvement and bioprospecting. SA’s first class researchers and infrastructure coupled, with third-world pathology and prices, make it an attractive investment option.
National Biotech Survey 2003 29 It is clear that there is potential for the development of a successful biotechnology industry in South Africa. In fact, SA is one of the top five developing countries earmarked internationally for biotechnology investment by SRI International (representing the World Bank, 2001), and the country is becoming an increasingly popular choice for investment and partnering for foreign companies and governments (e.g. those from Germany, Cuba, Japan and the USA). In addition, the international community is expanding its interest in and ability to promote the development of Africa as a whole.
There are, however, a number of factors that need to be addressed before a sustainable and globally competitive biotechnology industry in SA can become a reality. The biotechnology industry and the market for its products in South Africa are small and generally fragmented. Despite the fact that approximately R100-200 million has been spent on biotechnology research and development annually, IP generation and technology transfer in the biotechnology field to date has been slow and inefficient, and very few local products have been developed from scientific research (30).
The major factors inhibiting the biotechnology industry to date include: - a general lack of cohesion in research programmes - a shortage of market-focused research and a relatively low tendency among academics to commercialize research - a scarcity of suitably qualified R&D personnel, particularly at the MSc and PhD levels - a lack of clear IP policies that incentivise commercialization - an overall lack of confidence in African governments, which affects foreign investment - an increasing dependence on imported products, machinery, equipment, materials and technologies - a relatively small local market - a severe shortage of entrepreneurial and technology transfer skills and mechanisms - insufficient public and private funding for research and product commercialization
The development of biotechnology innovation and industry in SA is still very immature, with a general emphasis on institutional R&D. On the whole, research in SA is not carried out with commercialization in mind, and therefore lacks market focus, i.e. there is a technology push mindset rather than a market pull one. In SA, scientists are incentivised based on their publication output, rather than on the commercial value of their work. IP management is also a significant problem. In many cases, IP rights reside within universities, which have neither the means nor the incentives to develop, present, transfer or commercialize them. There is at present no equivalent of the Bayh Doyle Act in SA to deal with issues relating to rights to IP generated from government-funded research. In addition, the protection of IP has been extremely inefficient, often due to the high costs involved, resulting in the loss of a large amount of it to foreign interests. This is clear from the results of the patent searches, which show that a high proportion of patents with South Africa listed as an inventor country are assigned to organizations outside of the country (see section 2.2.5). It must be noted, however, that there is a substantial amount of ongoing research, which is generating an IP pipeline that may not yet have yielded protectable IP.
National Biotech Survey 2003 30 According to a 2002 NACI/DACST report (14), SA’s professional R&D workforce totals 30 000, equating to a paltry 7 researchers/100 000 members of the population, as opposed to 48 in Australia and 28 in Korea. Similarly the number of PhDs per capita is just over 10% of that in Australia and around 16% of that in Korea. A particularly worrying factor is the ageing of the research population. The number of A-rated scientists is declining annually, with a substantial number of them retiring, e.g. at UCT (25). In 1998, 45% of all research publications were by authors over the age of 50. In addition, the publications are still dominated by white (94%) and male (83%) authors, which suggests that progress in the demographic transformation of science and technology in SA has been slow. Thus there is a clear need to attract more young students, particularly from previously disadvantaged communities, to science and technology, and to support their development into world-class researchers and innovators.
There remains a lack of confidence in African governments in general, which serves as a hindrance to economic development and direct foreign investment. This situation has been exacerbated by the present government’s stand on HIV/AIDS and the situation in Zimbabwe. The limited size of the local market means that investors will only take on projects that have an export focus, to ensure a satisfactory return on investment.
One of the largest barriers to the development of a biotechnology industry in South Africa has been a shortage of the appropriate skills required for converting promising ideas and research into lucrative industries, i.e. a shortage of bio-entrepreneurs, and a lack of people with the passion to drive the commercialization of biotechnology projects. Such projects are frequently driven by researchers with no experience in, or passion for, entrepreneurial business management, and who are not prepared to hand over management responsibility to professional management teams. Funding for research and product commercialization remains an equally significant problem. In general, public funding of biotechnology R&D and early commercialization (incubation) is inadequate. This is compounded by a lack of incentives for privately-funded R&D, e.g. tax incentives. Another key issue is the requirement for updating and co-ordination of the legal and policy framework in SA in order for it to be effective in enabling the development of biotechnology start-up ventures.
2. Results of the National Biotechnology Survey
2.1 Stakeholder Participation in the Survey It is important to note that this study was intended as an survey of biotechnology activities in South Africa rather than a market survey. Attempts were therefore made to identify all relevant stakeholders and their activities, rather than defining and targeting a statistically significant sample to determine overall trends. Stakeholders and their activities were identified through secondary data sources. The email questionnaire and interviews were intended to provide confirmation of the credibility of the data and to obtain financial information for quantification of the bio- economy. It is internationally accepted that a response rate of 2% to an email questionnaire is good, while a response of 10% or higher is considered excellent. For this reason, the majority of core biotechnology companies were targeted for interviews, to ensure a higher response, particularly with respect to financial data. It was beyond the scope and budget of the survey to conduct interviews with all relevant research stakeholders.
National Biotech Survey 2003 31 Current secondary data was available for 84% of the research stakeholders listed in the database. Please note that, as is the nature of secondary information, some of it may be out of date, and some may be absent. Every effort has been made to ensure that the data is accurate and relevant. As can be expected from a questionnaire that requires some effort on the part of stakeholders with little reward, the response to the email questionnaire from the research community was disappointing, at only 22%, though excellent by accepted standards. It was clear from the completed questionnaires received that the secondary sources had identified >90% of relevant projects, thus confirming the credibility of the data. On the whole, the response from biotechnology companies was encouraging. Approximately 50% of the companies identified either agreed to be interviewed or to complete the questionnaire. The core biotechnology companies, in particular, were targeted. In this sample, 72% of stakeholders were either interviewed or completed the electronic questionnaire. A further 8% indicated their intention to participate in the survey but have not as yet contributed. Secondary data was available for the rest of the companies. The participation of those stakeholders that responded, and their contribution to the survey are gratefully acknowledged.
2.2 Overview of Biotechnology Activities in South Africa The results reported are based on both primary and secondary research on the industry and are extracted directly from a database of compiled information on research stakeholders, companies, research projects, and biotechnology products and services. Primary data was collected from a total of 90 interviews (telephonic and in- person) and 63 completed questionnaires (covering 85 different stakeholders). In general, information on human resources, turnover, expenditure, and revenues from products and services was only available for those stakeholders that participated directly in the survey. Where these parameters are discussed, the total number of entries on which figures are based is given. Please note when interpreting the results that, in many cases, stakeholders or projects fall within more than one biotechnology type, region, sector or focus area. Where pie charts are given, entries that fall under more than one category are equally fractionated to each, while bar graphs indicate absolute numbers and therefore the total contributions from the variables do not add up to 100%. Due to the limited contribution of stakeholders in Mpumalanga and the Limpopo Province, these are grouped under Gauteng for the analyses.
2.2.1 Number of Groups Active in Biotechnology 2.2.1.1 Analysis of Companies Active in Biotechnology The survey identified 106 companies participating in biotechnology activities, including 47 core and 59 non-core biotechnology companies/organizations. Emphasis was placed on the modern biotechnology companies; therefore the list does not include the larger brewing, food & beverage, and wine companies, unless they are involved in developing innovative products using modern technologies. A breakdown of core biotechnology companies by region and sector is represented graphically in Figure 1.
National Biotech Survey 2003 32 Figure 1. Distribution of c o re biotechnology companies in SA by a.) Region and b.) Sector (n=47) a.) Regional distribution of c o re biotechnology companies
Western Cape Free State 37% 41% Kwazulu Natal North West Province 0% Eastern Cape 4% 15% Gauteng 3%
b.) Sectoral distribution of c o re biotechnology companies
Human Health 13% Animal Health 3% Plant 39% 8% Food & Beverage 9% Industrial
8% Environmental 10% Other 10% Support Services
It is clear from the figures that the majority of core biotechnology companies are situated in Gauteng (41%) and the Western Cape (37%). Kwazulu Natal also boasts a number of core biotechnology companies (15%), while the rest of the provinces do not feature significantly in this sample. The human health sector has the highest representation in terms of numbers of core biotechnology companies (39%), followed by the support services sector (13%). The rest of the companies are fairly evenly spread across the plant, animal health, food & beverage, industrial, and environmental sectors, with a small proportion of companies (3%) contributing to the “other” category. All of the latter companies also fall under one or more of the other 7 categories.
A more difficult group of companies to quantify includes those that do not have biotechnology as their core focus, but utilize biotechnology in some aspects of their general business activities, for example, companies that utilize biotechnology processes to treat or remediate waste generated by conventional processes, companies that are turning their R&D to a biotechnology focus etc. The 59 non-core biotechnology companies in the database are broken down by sector and region in Figure 2. Please note that the number of companies in SA that may utilize biotechnology to some degree is likely to be higher than this (see section B.2.4).
National Biotech Survey 2003 33 Figure 2. Distribution of no n-core biotechnology companies in SA by a.) Region and b.) Sector (n=59) a.) Regional distribution of no n-core biotechnology companies
Western Cape Free State 37% 38% Kwazulu Natal North West Province Eastern Cape 3% 3% 18% Gauteng 1%
b.) Sectoral distribution of no n-core biotechnology companies
Human Health 5% Animal Health 13% 15% Plant 7% 8% Food & Beverage Industrial 15% 26% Environmental 11% Other Support Services
The majority of non-core biotechnology companies in the sample are situated in Gauteng (38%) and the Western Cape (37%), and are active in the plant sector (26%). This may be distorted to some degree by the inclusion of a number of multinational seed and agro-science companies, most of which have their local head offices in Johannesburg or Pretoria. These companies are generally subsidiaries of larger multinational agricultural companies that do not conduct research in biotechnology but carry out field trials in SA and sell the resultant products. The second largest sectors represented in this sample are the human health and industrial sectors (15% each).
Companies partaking in the survey were asked for their date of establishment or, in the case of non-core biotechnology companies, the year in which they initiated biotechnology activities, in order to determine trends in the development of new biotechnology companies.
National Biotech Survey 2003 34 Figure 3. Distribution of core biotechnology companies by age a.) Number of core biotechnology companies established per year (n=37)
6 s e i
n 5 a p
m 4 o C
f 3 o
r
e 2 b
m 1 u N 0 4 8 8 0 0 2 2 4 6 6 8 8 9 9 0 9 0 9 8 9 9 9 9 9 0 9 0 9 9 9 1 1 1 1 2 1 2 1 1 1 - e r P
b.) Cumulative number of core biotechnology companies per year (n=37)
40 s e i 35 n a
p 30 m
o 25 C
f 20 o
r 15 e
b 10 m
u 5 N 0 8 4 0 6 8 0 2 2 4 6 8 9 9 8 9 9 0 0 9 8 9 9 9 9 9 0 0 9 9 9 1 1 1 1 1 2 2 1 1 1
The age distribution of core biotechnology companies (Figure 3) indicates that a small number of companies were established before 1986, followed by a period of inactivity in the late 1980’s and early 1990’s, and a relatively steady start-up rate of, on average, 2 new companies per annum between 1992 and the present. An analysis of 40 core biotechnology companies reveals a relatively even distribution of new start-ups, spin-offs from research groups, and spin-offs from another enterprise (Figure 4). The latter group includes 2 companies that form part of large traditional biotechnology companies but are developing novel products or processes. The smallest group in this sample represents those companies established as spin-offs from research groups. This is not unexpected, given that the primary role of researchers at higher education institutions is in education and publishing, which often leaves little time for commercial activities, and may undermine IP value. However, these stakeholders represent an important source of new innovations for commercialization in the future.
National Biotech Survey 2003 35 Figure 4. Origin of core biotechnology companies (n=40)
New Start-Up 33% 37% Spin-off from Research Group Spin-off from Another Enterprise 30%
Figure 5 represents the size distribution of core and non-core biotechnology companies based on numbers of employees. The figures for non-core biotechnology companies represent only those employees that participate in biotechnology activities. Figures are only given for approximately 43% of the companies, however, the results are in line with international trends, which indicate that the majority of biotechnology companies are relatively small, i.e. have a staff complement of less than 50. Companies in this sample together employ a total of approximately 1020 staff in biotechnology-related activities.
Figure 5. Distribution of core and non-core biotechnology companies by number of employees
12 10
f s o e i 8 r n e a
b Core Biotechnology p 6 m m
u Companies o 4 N C 2 Non-Core Biotechnology Companies 0 1-10 11-20 21-50 51-100 >100 Number of Employees
Core biotechnology companies, n=30 Non-core biotechnology companies, n=16
National Biotech Survey 2003 36 The biotechnology companies were classified according to the biotechnology types defined in section B.2.4. The distribution of companies according to biotechnology type (Figure 6) indicates that the majority of companies are not working with genetically modified organisms, though most are using modern technologies or developing new applications. Please note that some companies fall under more than one category.
Figure 6. Distribution of core and non-core biotechnology companies by type of biotechnology
Core Biotechnology Companies Non-Core Biotechnology Companies
20
s 18 e i
n 16 a
p 14 m
o 12 C
f 10 o
r 8 e
b 6 m
u 4
N 2 0
1st 2nd 3rd
Core biotechnology companies, n=47 Non-core biotechnology companies, n=59
The majority of core and non-core biotechnology companies in SA are involved in either the extraction or production of products using relatively “low-tech,” though modern methods. In many of these cases, the novelty is in the application of the products to new problems. Only around 10% of the companies are partaking in highly innovative research and development that has the potential to result in groundbreaking technologies and/or products.
As mentioned previously, the list of core biotechnology companies in this study does not include the larger traditional manufacturing companies that use biotechnology in their core processes. South Africa has a strong tradition of first generation biotechnology and boasts world-renowned and globally competitive companies. These companies fall predominantly within the food & beverage sector, and are generally multi-million Rand operations. They include yeast, cheese and yoghurt manufacturers, baking companies, beer brewers and wine makers, all of which either produce microorganisms and/or enzymes, or use them for processing. In line with national biotechnology surveys from other countries, this survey does not include these companies in the analyses, nor were the companies targeted for participation in the survey, unless they were known to conduct innovative biotechnology R&D.
National Biotech Survey 2003 37 2.2.1.2 Research Groups Active in Biotechnology A total of 1032 research groups were identified as being potentially relevant to the survey. Primary and/or secondary data was available for 869 of these stakeholders (84%), and was used in the analyses below. As mentioned in section B.2.4, drawing the boundaries for researchers and research projects that should be included in this survey was extremely challenging. For the purpose of this survey, research projects and their respective programme leaders were divided into 4 categories, i.e. “biotech”, “potentially biotech”, “fundamental research”, and “biotech services”. Please note that a small number of projects and researchers that have been listed as “biotech” involve different parts of the biotechnology value chain that may not necessarily be using microorganisms directly, e.g. rational drug design using chemical techniques, synthetic routes to natural drugs etc. The proportions of researchers in each category are represented in Figure 7.
Figure 7. Distribution of research groups in the database by degree of relevance to biotechnology
11%
33% Biotech Potentially Biotech 32% Fundamental Research Biotech Services
24%
Please note that where stakeholders were classified as “biotech services” as well as one of the other categories, the other categories were given priority. Therefore the 11% in the figure represents stakeholders that have been classified as “biotech services” only, and the true number of stakeholders offering services is higher than this (178 in total).
In this sample, 296 researchers have been classified as being involved in biotechnology, with a further 205 classified as potential biotech stakeholders, and 178 stakeholders offering biotechnology services, 28 of which are also classified as “fundamental research,” 22 as “potential biotech,” and 35 as “biotech” stakeholders. The total number of stakeholders from research institutions identified as being involved in biotechnology-related activities is, therefore, 622. Those stakeholders involved solely in fundamental research are not included in any further analyses. The majority of relevant research stakeholders are operating from the Western Cape, followed by Gauteng, Kwazulu Natal and the Free State. Researchers developing biotechnology products are working predominantly in the human health sector, followed by the plant, industrial, and food & beverage sectors, in that order (Figure 8).
National Biotech Survey 2003 38 Figure 8. Distribution of research groups by a.) region, and b.) sector a.) Regional distribution of research groups
140
120
s 100 p u o r
G 80
f o
r Biotech e 60 b
m Potentially Biotech u
N 40 Biotech Services 20
0 e g n n u st t r l r l e n e e a e a e ce p t e p t t zu n a st W S st a a u
a a e vi C a C N h e w t o E e r r G W K r o P F N b.) Sectoral distribution of research groups
120
100 s p
u 80 o r G
f
o 60
r
e Biotech b
m 40
u Potentially Biotech N Biotech Services 20
0 l l t h h r t t a t e s a n l l r t e i & g r a a a o n
h l ce a t e e p e d st r P vi p O o H u H r m
u o ve l d e n n e a n F S o a I S r B m i m vi n u n A H E
National Biotech Survey 2003 39 Figure 9. Distribution of research groups by number of employees
30
25 s p u o
r 20 G
f
o 15
Biotech r e b 10 Potentially Biotech m u Biotech Services N 5
0 1-10 11-20 21-50 51-100 >100 Number of Employees
Biotech Research Groups, n=61 Potentially Biotech Research Groups, n=18 Biotech Services Research Groups, n=19
Human resources figures were only available from research stakeholders that participated in the survey. Figure 9 reveals that the majority of research groups in this sample are small, i.e. have between 1 and 10 people. This is probably due to the fact that group leaders within departments were targeted rather than only department heads. This sample represents a total of around 950 employees/students partaking in biotechnology-related activities.
2.2.2 Biotechnology Research Projects The majority of the research projects in the database were identified through current secondary sources, some of which were confirmed with primary data. It is assumed that information posted on websites, in publicly available university or departmental annual reports, local and international research publications, funded project lists etc., though it may be outdated, is accurate. The nature of research is such that projects can take many years to complete, and in some cases are continuously pursued. Changes in research programmes to accommodate new students and staff generally take place within the same theme. Since the projects in the database are classified into fairly broad themes, and the annual turnover of project themes is reasonably low, it is assumed that projects listed for the last 2-3 years remain relevant today. This has been cross-checked wherever possible. Secondary research will not identify projects that have not yet been publicized. These may include projects that have only been initiated recently or are too sensitive to publish at present. Information on some of these projects has been provided through completed questionnaires; however, we understandably have not been provided with access to all of them. It is impossible to estimate the number of projects in universities and with individuals that have not been identified and catalogued; however, we have used as many available channels as possible to identify biotechnology research activities and are reasonably certain that our database covers at least 80% of relevant projects and stakeholders.
The distribution of projects by degree of relevance to biotechnology is represented in Figure 10. The total number of research projects in the database is 1494. Approximately 30% of these (447) are classified as biotech, 25% (376) as potentially biotech, 39% (583) as fundamental research, and 6% (88) as biotech services. Taking into account the overlap between the projects classified as biotech services and the other categories, the total number of projects relevant to biotechnology is 911. This includes projects undertaken by both research and industry stakeholders.
National Biotech Survey 2003 40 Figure 10. Distribution of research projects by degree of relevance to biotechnology
6%
30% Biotech Projects Potential Biotech Projects 39% Fundamental Research Biotech Services
25%
The projects classified as fundamental research were generally obtained from websites where the posting of research being conducted by specific groups is inconsistent. Some university or departmental websites, for example, provide a fairly comprehensive list of the research activities of its staff, while others give few or no details, resulting in skewing of the data. In addition, these projects are not aimed at commercializing or offering a product or service. These projects and the corresponding researchers are therefore not included in any further analyses. The regional and sectoral distributions of the biotech, potentially biotech and biotech services research projects are represented graphically in Figure 11.
Figure 11. Distribution of research projects by a.) region, and b.) sector a.) Regional distribution of research projects
200 180 160 s
p 140 u o r 120 G
f
o 100
r Biotech e
b 80
m Potentially Biotech
u 60 N Biotech Services 40 20 0 e g n n u st t r l r l e n e e a e a e ce p t e t p t zu n a st W S st a a u
a a e vi C a N C h e w t E o e r r W G K r o P F N
National Biotech Survey 2003 41 b.) Sectoral distribution of research projects
160 140 s
p 120 u o r 100 G
f o
80 r
e Biotech b 60 m
u Potentially Biotech
N 40 Biotech Services 20
0 l l t h h r t t a t e s a n l l r t e i & g r a a a o n
h l ce a t e e p e d st r P vi p O o H u H r m
u o ve l d e n n e a n S F o a I S r B m i m vi n u n A H E
Biotech Projects, n=447 Potentially Biotech Projects, n=376 Biotech Services Projects, n=94 (6 projects also fall under one of the other categories)
The regional distribution of research projects mirrors that of the research stakeholders, i.e. majority in the Western Cape, followed by Gauteng, Kwazulu Natal and Free State; while the dominant sector in terms of projects aimed at developing a product, is plant biotechnology, followed by human health and industrial. Research projects that have the potential to lead to a product are predominantly in the human health sector, followed by the plant sector. The latter trend mirrors that of the research stakeholders. Please note that the entry of projects into the database is somewhat subjective. It is often difficult to determine whether a project has its own theme or whether it fits into a broader one. Therefore the absolute numbers of projects, and hence the sectoral and regional distribution of projects may not be the most accurate reflection of the distribution of biotechnology activities. If one looks at the distributions in terms of research stakeholders and research projects together, the clear trend is that the human health sector dominates, followed closely by the plant sector.
Comparison of the regional and sectoral distributions of “biotech” projects with those of applications received by the funders/incubators Bioventures, Catalyst Innovation Incubator, Acorn Technologies, and eGoli BIO over the last year (as of July 2003), reveals similar trends. Please note that the classification systems used in the studies differ slightly. Overall, the dominant activities are in the human health and plant sectors. The regional distribution of projects in the present survey shows a similar trend to that seen by Bioventures. The regional distribution of applications received by Catalyst, Acorn and eGoli BIO is biased by the location of these organizations.
Table 1: Distribution of research projects/applications by sector and region
National Biotech Survey 2003 42 Sectoral Distribution (%) Sector Bioventures Catalyst Acorn Technologies eGoli BIO† Present Study
Human Health 153 50 48 27 21 Animal Health <1 1 9 12 Plant 219 540 45 29 Food & Beverage 8 68 8 Industrial 312 10 718 15 Environmental <1 9 Other 48 20 4 Support Services 2
Regional Distribution (%) Sector Bioventures Catalyst* Acorn Technologies* eGoli BIO† Present Study
Western Cape 50 ~60 >90 37 Gauteng 34 ~30 <1 91 33 Kwazulu Natal 4 <1 <1 11 Eastern Cape 2 5 Free State 2 <1 9 6 Mpumalanga 2 2 Northern Cape 1 - Off-shore 5 5-10 -
1Includes Bioventures’s categories Pharmaceuticals and Fine Chemicals (28%) and Healthcare (25%) 2Agriculture including aquaculture, floriculture etc. 3Includes environmental biotechnology 4Genomics 5Includes a few aquaculture/mariculture projects 6Agrifood and health 7This figure is for industrial, mining and environmental projects *Please note that these are rough estimates only and that they are biased by their location in the Western Cape † Figures are based only on projects showing a strong interest in being incubated by eGoli BIO. The bias in regional distribution of applications is due to the location of eGoli BIO in Gauteng
2.2.3 Human Resources in Biotechnology This report is not intended to give a full overview of R&D personnel in South Africa. For broad figures on human resources in science and technology, the reader is referred to the NACI/DACST publication, South African Science and Technology, Key Facts and Figures 2002 (14). The difficulty is in identifying what portion of the total R&D capacity is attributable to biotechnology. Unfortunately it is not meaningful to allocate human resources according to research groups and industry in this study, since not all of the data is available, and there will be some bias towards industry where the response was better. It is also not possible to breakdown human resources according to sector since very few details were given on human resources allocated to specific projects. In addition, researchers within certain research groups may be involved in more than one project covering different sectors. Stakeholders were asked to indicate the approximate percentages of employees/researchers in their company/research group falling within certain demographic and qualification categories. These distributions, shown in Figures 13 and 14, respectively, are based on completed questionnaires and interviews. They represent only a small fraction of the total sample but give some indication of the trends. Staff numbers include research, admin and technical staff. Figure 13 plots the number of groups with >50% representation of each of the demographic groups.
National Biotech Survey 2003 43 Figure 13: Demographic distribution of human resources in biotechnology
45 s
r 40 e d
l 35 o
h 30 Research Stakeholders ke a
t 25 S
f 20 Core Biotechnology o
r Companies e 15 b
m 10 Non-Core Biotechnology u
N 5 Companies 0 >50% >50% >50% >50% Black Coloured Asian White
Research Groups, n=62 Core Biotechnology Companies, n=26 Non-Core Biotechnology Companies, n=15
It is clear that the demographic transformation of research groups has not yet reached acceptable levels (figures are for biotech, potentially biotech and biotech services groups combined). The groups are still dominated by white researchers. It was pointed out by a number of stakeholders that this trend is not through lack of effort. Many found it difficult to find suitably qualified researchers from other demographic groups. The demographic representation in biotechnology companies reflects some improvement, with a less marked difference between the demographic groups.
Figure 14: Human resource allocation by qualifications
18 16 14 s
f r o e 12
d r l Research Stakeholders e
o 10 b h
m 8 ke u a t N 6 Core Biotechnology Companies S 4 2 0 Non-Core Biotechnology a c e e i c % % % % D r
e Companies m n % % t r S 0 0 0 0 h o o 0 0 a l g 5 5 5 5 P M 5 5 N p e > > > > M i > > D D Qualifications
Research Groups, n=58 Core Biotechnology Companies, n=25 Non-Core Biotechnology Companies, n=15
National Biotech Survey 2003 44 Biotechnology companies show a relatively even distribution of employees by qualification. This is probably a function of the averaging out of R&D personnel and technical/production staff in a sample that includes R&D- intensive as well as production-orientated companies. As is to be expected, research groups are dominated by employees with at least a degree qualification, and frequently a post-graduate degree.
Approximately 50% of companies and 81% of research stakeholders that participated in the survey indicated that they had experienced shortages in human resources. The majority of research stakeholders listed skilled scientists at various levels, particularly MSc’s and PhD’s, as being in short supply. Particular areas where human resource gaps were identified include:
- engineers with appropriate biology background/training and good mathematical ability - polymer chemists - experienced scientists trained in human genetics environments - biometricians - technical personnel with experience in tissue culture and other analytical techniques - business plan writers with an academic background in biotechnology - laboratory technicians - bioinformaticists - biostatisticians - plant physiologists - well trained protein purification experts, especially those with experience in plant proteins - science managers - people with degrees or experience in botany and genetics - sugar technologists - legal professionals.
Biotechnology companies listed the following gaps in human resources: - scientists and researchers - engineers - accountants - good production staff - people with the relevant operating experience - managers, quality control staff and production engineers with pharmaceutical experience - good laboratory microbiologists - bioinformaticists - protein chemists - baking technologists - botanists - entrepreneurs - marketers. - trained laboratory and production personnel who understand GLP/GMP
National Biotech Survey 2003 45 Many of these shortages are within specialized areas, however the general trend is that more science and technology graduates and post-graduates are required to feed into the biotechnology research and industry environments. The shortages may be due, in part, to the fact that quality graduate, post-graduate and postdoctoral scientists leave South Africa to explore opportunities abroad. A successful biotechnology industry in SA that can offer improved local job opportunities in biotechnology, competitive remuneration and a challenging environment should serve to attract those graduates, as well as other international experts, back to the country. It should also encourage a larger number of learners to enroll in science and technology courses at universities and technikons.
2.2.4 Size of the Bio-economy in South Africa As mentioned previously, a biotechnology industry is very difficult to define. Biotechnology refers to a set of processes or technologies and is not really an industry or output. This, and the fact that the boundaries are hard to define, make it very difficult to quantify. The industry sector of biotechnology in South African is made up almost exclusively of private companies, most of which fall into the SMME category. There are relatively few exports to date, and this data is not readily available due to the crosscutting nature of the technology and a lack of appropriate classification by bodies such as Customs and Excise and the Department of Trade and Industry. Biotechnology products can be classified under a number of different Harmonization System (HS) codes, all of which are too broad to give meaningful figures.
As mentioned, there is no appropriately classified trade data available for biotechnology products and services in South Africa. Attempts were therefore made to quantify the size of the biotechnology industry in terms of numbers of companies, their annual turnovers, and revenues from products and services, through the questionnaires and interviews. Stakeholders were asked to define the broad categories of biotechnology products and services offered by them and the revenues earned from these products for the 2002/03 financial year. They were also asked to classify their turnover for the same period as being R0,
Figure 15: Distribution of core biotechnology companies by turnover
30
f o
s 25
e e i g n 20 a a t p
n 15 m ce o
r 10 C e
P 5 0 n n n 0 n 1 0 0 0 0 5 - 0 o o o 5 - - o 1 0 i i i 1 i l l l 5 0 - l l l l 1 1 0 . l R i i i R
i 0 5 5 0 R < > 0 m m m R m R R 0 5 Turnover
National Biotech Survey 2003 46 The majority of core biotechnology companies in this sample (71%) had a turnover of more than R1 million for last year, with 25% of the total earning more than R10 million. Taking an average for each of the ranges represented and a conservative of estimate of R10 million for the >R10 million category, the total turnover of this sample is estimated to be at least R133 million. The turnover ranges given in the questionnaire do not allow for quantification of companies with a turnover that is far in excess of R10 million; however, the revenues from products and services (discussed below) give some indication of the extent of earnings of such companies. At least one of the companies in the sample earned more than R150 million from biotechnology products last year. In addition, the sample represents only 60% of the total number of core biotechnology companies identified in the survey, and does not include the non-core biotechnology companies, a number of which are earning >>R10 million from biotechnology products and services. The total turnover for 2002 that can be attributed to biotechnology in the business sector is, therefore, likely to be in excess of R300 million.
At least 154 biotechnology products and/or services were identified from completed questionnaires and interviews (research groups and companies). They are classified by sector and type of biotechnology (Figure 16). The majority of these products fall under the human health (23%) and support services sectors (20%), followed by the plant sector (18%). These products/services include predominantly therapeutics, diagnostics, natural health products and phytopharmaceuticals in the human health sector; core technology services, contract research and contract manufacture in the support services sector; and GM crops, plant growth stimulants, and biological control products in the plant sector. 36% of the products and services listed involve first generation biotechnology, with only 10% involving genetic modification techniques.
Figure 16: Biotechnology products by a.) sector and b.) type of biotechnology a.) Sectoral Distribution of Biotechnology Products
Human Health
20% 23% Animal Health Plant
6% Food & Beverage 11% Industrial 5% Environmental 9% 18% Other 8% Support Services
National Biotech Survey 2003 47 b.) Distribution of Biotechnology Products by Type of Biotechnology
40 35 s 30 ce
f vi o r 25 r e e S b 20 s/ m ct u 15 u N d
o 10 r P 5 0
1st 2nd 3rd
Revenues for 2002 were given for 56 of these products and services (around 36%), and total R245.6 million. It is important to note that this figure is largely skewed by one company that earned R200 million in revenues last year. Therefore the remaining 55 products/services earned collective revenues of only R45.6 million. Eighteen other companies gave very broad estimates of revenues from biotech products and services, which together represent at least another R122.4 million. Thus, the revenues from biotech products and services listed for 2002 total at least R368 million. In some cases, products have not as yet earned any revenues and in other cases, services are exchanged for research grants or as a service to parent companies for no fee, which makes quantifying the value of these products/services difficult. The figure of R368 million represents only 48% of the products and services listed in the database, which, in turn, probably represents only a fraction of the total number of biotechnology products and services on offer in SA. As an example, 105 research organizations or departments were identified as offering services that utilize biotechnologies, such as molecular diagnostics for human, animal, and plant diseases, contract research, etc. These groups are not included in the above sample. An estimation of the true size of the bio- economy in SA is not possible without the full cooperation of all stakeholders.
The revenues earned in 2002 from biotechnology products and services are broken down in Figure 17 according to sector and biotechnology type.
National Biotech Survey 2003 48 Figure 17: Biotechnology revenues by a.) sector and b.) type of biotechnology a.) Sectoral Distribution of Biotechnology Revenues i.) All figures included
250
200 s) n o i l l i 150 m ( s e u
n 100 ve e R 50
0 l l t h h r t t a t e s a n l l r t e i & g r a a a o n
h l ce a t e e p e d st r P vi p O o H u H r m
u o ve l d e n n e a n F S o a S I r B m i m vi n u n A H E
ii.) Sectoral Distribution of Biotechnology Revenues Without outlying figure
60
s) 50 n o i l l
i 40 m (
s 30 e u n 20 ve e
R 10
0 l l t h h r t t a t e s a n l l r t e i & g r a a a o n
h l ce a t e e p e d st r P vi p O o H u H r m
u o ve l d e n n e a n S F o a S I r B m i m vi n u n A H E
National Biotech Survey 2003 49 \b.) Distribution of Biotechnology Revenues by Type of Biotechnology i.) All figures included
120
s) 100 n o i l l i 80 m (
s 60 e u
n 40 ve e
R 20 0
1st 2nd 3rd ii.) Distribution of Biotechnology Revenues by Type of Biotechnology Without outlying figure
35
s) 30 n o i
l 25 l i m
( 20 s
e 15 u n 10 ve e
R 5 0
1st 2nd 3rd
Please note that the sample used for the analysis in Figure 17, i.e. products for which companies were prepared to give financial data, is probably not a representative sample. In addition, many of the products are classified into more than one sector and biotechnology type. Therefore the figure should not be seen as a true reflection of the distribution of income in the industry. The distributions are shown with and without the R200 million outlier. The majority of revenues can be attributed to the industrial sector, followed by human health and food & beverage sectors. Second and third generation biotechnology account for the largest proportion of revenues. Again it must be noted that this is skewed by the one product set.
National Biotech Survey 2003 50 Stakeholders were asked to assign the % of their turnover attributable to exports to one of the following categories: <10, 10-20, 20-40, 40-60, 60-80, or 80-100 (Figure 18). Sales to neighbouring countries were also counted as exports.
Figure 18: Export of biotechnology products and services as a percentage of turnover
7 s
e 6 i n
a 5 p m
o 4 C
Core Biotechnology Companies f o
3 r e b 2 Non-Core Biotechnology m
u Companies
N 1 0 0 <10 10-20 20-40 40-60 60-80 80-100 % Exports
Core Biotechnology Companies, n=27 Non-Core Biotechnology Companies, n=16
The figure indicates that, for around 50% of the companies, exports account for <10% of turnover. However, it is interesting to note that >70% of the core biotechnology companies in this sample export their products or services. Therefore the existing biotechnology companies are actively pursuing markets outside of SA.
2.2.5 Intellectual Property A solid patent portfolio can be critical to a biotechnology company’s ability to attract investment and compete in the market. The numbers of patents emerging from biotechnology activities are an important indicator of the technology/innovation strengths of a country. Stakeholders were, therefore, asked to list the number of patent applications filed in SA and abroad. Due to an insufficient response to the survey, figures obtained could not be used to accurately quantify the total number of patents filed by SA biotechnology inventors. Broader figures were therefore sought from the respective patent offices.
The South African Patents Office (Registrar of Copyright Designs, Patents, Trade Marks), situated in Pretoria, houses hard copies of all patents registered in SA. Patents are arranged according to broad classes only. It is therefore not practical to search the office manually for biotechnology-related patents. Spoor & Fischer scans a copy of the majority of patents registered with the office and therefore has a fairly comprehensive database of SA patents. A list of all patents registered in SA in certain international patent classification groups (Appendix B) was obtained from their database. The 25 000 patents were scanned manually and those registered by foreign and unknown groups discarded. For the remaining 422 patents, titles were used, where possible, to determine which patents were related to biotechnology. This search revealed at least 200 biotechnology-related patents filed by SA inventors between 1979 and 2002. Please note that this is only a rough estimate. Classification was only possible where titles were descriptive, and it wasn’t always possible to determine the country of origin of the inventors.
National Biotech Survey 2003 51 The necessity for SA organizations to aim for a wider market than SA alone has meant that the majority of them apply for international patent protection, where financial constraints allow. According to statistics published by the United States Patents and Trademarks Office (USPTO) (26; 27), SA registers around 100 patents per annum with the USPTO. The number of patents increased from 101 in 1992 and 1993 to 137 in 2001. Between 1997 and 2001, the ownership of patents registered was as follows: 193 individually owned, 10 Sasol Technology, 9 Denel, 9 Water Research Commission, 8 Implico, 7 Eskom, 5 Atomic Energy Corporation, and 5 Farmac Nederland. The 4 technology classes accounting for the largest contribution over this period were drug, bio-affecting and body treating compositions (29), liquid purification or separations (26), communications: electrical (24), and hydraulic and earth engineering (15). The numbers given are for the total number of SA patents registered with the USPTO and is not confined to biotechnology patents. A search of the USPTO using the US classification code 435, which includes “molecular biology and microbiology” patents, and the relevant international patent classification groups revealed a total of 65 biotechnology-related patents awarded to South African inventors between 1976 and the present. It is interesting to note that around 32% of these patents are assigned to non-South African entities. Figure 19 indicates a clear increase in the number of patents awarded to South African inventors from 1999 to the present.
Figure 19: Number of US patents awarded to South African inventors per year
12 s
t 10 n e t
a 8 P
f o
6 r e
b 4 m u
N 2 0 5 4 6 8 2 6 0 8 0 2 8 9 9 9 0 8 0 8 9 9 9 9 9 9 0 9 0 9 9 9 1 1 1 1 2 1 2 1 1 1 - e r P
Patent Co-operation Treaty (PCT) patent applications were searched using the relevant ICP codes and South Africa as the inventor country. The search revealed 86 applications between 1986 and the present. The distribution of applications by year is represented in Figure 20. The overall trend is an increase in the number of filings per year.
National Biotech Survey 2003 52 Figure 20: Number of PCT applications filed by South African inventors per year
20 18
s 16 t n
e 14 t a 12 P
f
o 10
r
e 8 b
m 6 u
N 4 2 0 7 6 5 3 2 1 0 9 8 9 9 9 0 0 0 0 9 9 9 9 9 0 0 0 0 9 9 1 1 1 2 2 2 2 1 1
The European Patent Office (EPO) patent applications can only be searched if the inventor, patent number, filing date etc. are known, or by international patent classification (ICP) code. Biotechnology fits under a number of different IPC codes (see Appendix C). It was not practical to extract all patents under these codes and search through them manually to identify those with SA as the inventor country.
Comparing the patent output of SA with other countries, the NACI/DACST report (14) estimates that SA produces around 2.5 patents per million population as opposed to 75 in Australia and 779 in South Korea, and US$1.7 per 1000 population in royalties or from licenses as opposed to US$18.2 in Australia and US$9.8 in South Korea.
Therefore, SA lags far behind in terms of patent outputs when compared with other countries. A potential reason for this, substantiated by a selection of stakeholders in the survey, is the substantial expense involved in registering foreign patents. A number of groups in SA indicated that they could not afford to patent their IP internationally or were forced to let their patents lapse due to financial constraints. There is also a substantial amount of ongoing research, which is generating an IP pipeline that has not yet yielded protectable IP, but may do so in the future. In addition, the patent applications do not account for Intellectual Capital, i.e. knowledge that resides within an individual or group of individuals and is not in the public domain. Therefore, the patent numbers reported above are unlikely to represent the full complement of IP emerging from SA.
The publication output of SA biotechnologists was not explored. It was clear from the questionnaires received and the interviews conducted that those groups developing proprietary IP do not publish but rather go the patent route. According to the NACI/DACST report of 2002 (14), South Africa produces around 0.5% of the world’s research in terms of scientific publications in Institute for Scientific Information articles. The report indicates a slight decline in scientific output in terms of publications from 1996. They speculate that this may be due to an increase in contract research, which would not be published publicly. Readers are referred to this report for a detailed analysis of science and technology publications by South African groups.
National Biotech Survey 2003 53 2.2.6 Technology Platforms The availability of and requirement for various technology platforms for biotechnological innovation are addressed in detail in the final report from the DST Biotechnology Roadmapping Project, due to be released shortly (5). The current report, therefore, provides only a brief description of technology capabilities and requirements based on primary and secondary data. In the context of the National Biotechnology Strategy, Regional Technology Platforms (RTPs) are broadly defined as vital multi-use technologies that underpin broad areas of biotechnology research and development. These supporting technologies include molecular biological techniques, bioinformatics, large-scale culturing of organisms, process design and optimization, analytical techniques, product development etc. Without access to novel, cutting edge technologies and modern, state-of-the-art equipment, South African groups cannot expect to compete with their foreign counterparts.
A recent report identified the top 10 technologies for improving health in developing countries as being: - Modified molecular technologies for affordable, simple diagnosis of infections diseases - Recombinant technologies to develop vaccines against infectious diseases - Technologies for more efficient drug and vaccine delivery systems - Technologies for environmental improvement (sanitation, clean water, bioremediation) - Sequencing pathogen genomes to understand their biology and to identify new antimicrobials - Female-controlled protection against sexually transmitted diseases, both with and without contraceptive effect - Bioinformatics to identify drug targets and to examine pathogen-host interactions - Genetically modified crops with increased nutrients to counter specific deficiencies - Recombinant technology to make therapeutic products (for example, insulin, interferons) more affordable - Combinatorial chemistry for drug discovery (5)
The trend in molecular biology research is a move away from the “one-gene/one-protein” approach to investigating global cellular features. Disciplines such as genomics, transcriptomics, proteomics, metabolomics etc. are increasingly subscribed to for both fundamental research and for the development of new products and processes. The sequencing of the human genome, in particular, has opened the door to vast new opportunities for diagnostics, vaccine and drug development, and has contributed significantly to the genomics era. New technologies for application in these disciplines are continually emerging and must be made accessible to the South African research and biotechnology community to ensure global competitiveness.
In order to map the technology platforms available to biotechnologists in SA, stakeholders were asked to define which technologies their groups currently had access to, which technologies were required in their research but were unavailable to them, and which technologies they were likely to use in the future. The response to this question was variable and difficult to interpret. It was extremely difficult for stakeholders to attach accurate figures to human and financial resources assigned to particular technology platforms and, understandably, many stakeholders participating in the survey did not provide quantitative responses to this question. As an example, DNA sequencing facilities may be available within a particular research group and used erratically by all members of the group at some time or other within any given time period. Various components of equipment may be upgraded at different times and reagents used for other applications. In this scenario, which is common to most technology
National Biotech Survey 2003 54 platforms, except those run specifically for service provision, it is impossible to accurately quantify the human resources and funding allocated to the technology platform.
For the purposes of analyzing national strengths in technologies, the numbers of groups or departments having access to specific technology platforms, as determined from completed questionnaires, secondary data, and from a survey on biotechnology resources conducted earlier this year (13), are plotted in Figure 21.
The relatively low response to the questionnaire, coupled with the fact that many of the technology platforms exist in laboratories that saw themselves as not being relevant to the survey, means that it is unlikely to be a complete picture. It is clear from the figure that the majority of groups have access to cell or tissue culture facilities, general molecular biology technologies for DNA work and microbiology, and analytical techniques. The less widely accessible techniques are generally those that are more specialized and are likely to be required by a smaller number of groups.
A plot of the number of groups that will be requiring specific technology platforms within the next 5 years (Figure 22) indicates a requirement for DNA sequencing/synthesis/amplification techniques. In many cases the request was for funding to upgrade existing facilities rather than to establish a new facility, though the result also reflects a growing interest in whole genome sequencing. The high throughput generation of DNA sequence and molecular marker data is central to many areas of biotechnology, and there is clearly a growing demand for it in SA. The majority of institutions now own at least one automated DNA sequencer for relatively high throughput generation of sequence data, and many offer contract services in DNA sequencing. Other priorities emerging from this study are cell/tissue culture, recombinant DNA technologies, bioinformatics, biochips, and molecular high throughput screening. Bioinformatics plays an important role in the development of biotechnology, particularly with respect to data production, processing, analysis, storage, visualization and dissemination. The development of bioinformatics capacity is being addressed by the National Biotechnology Strategy and is discussed in more detail below.
Access to state of the art equipment is, in some cases, available to research groups and companies in SA; however, there remains a shortage in equipment and expertise in many areas. In addition, there is a general lack of integration of equipment, and hence sub-optimal usage and economy. The major problems with developing capability in technology platforms are the high costs of purchasing, running and maintaining equipment, and the lack of qualified staff with expertise in the relevant technologies. A significant investment into equipment, infrastructure and human resources is required to develop capacity in key technology platforms. This is being addressed in the National Biotechnology Strategy (19), The R&D Strategy (22), and the Biotechnology Road Mapping Exercise. A portion of the BRIC funding will be allocated to the expansion of existing regional technology platforms (RTPs) and the development of others. The R&D strategy provides for increased spending on science and technology equipment as well as the development of new technology platforms for biotechnology. The Biotechnology Road Mapping Exercise, discussed in more detail below, is mapping current capabilities and the technologies required for the future development of biotechnology in SA. It will provide a clear road map of technology requirements in SA over the next 10 years, based on existing capabilities and market demands.
National Biotech Survey 2003 55 Cell/tissue culture
Microbiology/ Virology/ Microbial Ecology
General Molecular Biology Techniques
Recombinant DNA technologies
Bioreactors
Enzymology
Genomics
Bioprocesses
Bioinformatics
Pilot Scale Manufacture/Processing
Molecular modelling
Antibodies
Structural Biology
Classical/Traditional Breeding
Product Development
Biomaterials
Proteomics
Processing of Blood Products and Substitutes
Cell Receptors/ Signaling/ Pheromones
Drug Delivery
Tissue engineering
Combinatorial Chemistry
Lipid/protein engineering Figure 21: Capacity in Various Technology Platforms
Molecular High Throughput Screening
Cellular fusion
0 10 20 30 40 50 60
National Biotech Survey 2003 56 DNA Sequencing/ Synthesis/ Amplification
Bioinformatics
Cell/tissue culture
Bioprocesses
Recombinant DNA technologies
Molecular High Throughput Screening
Biochips
Peptide/Protein Sequencing/Synthesis
Fermentation
Genomics
Gene probes/DNA markers
Diagnostics
DNA work
Bioreactors
Proteomics
Enzymology
Microbiology/ Virology/ Microbial Ecology
Vaccines/Immunology
Bio-nanotechnology
Antibodies
Pharmaco-genomics
Transgenesis
Extraction/ Purification/ Separation
Lipid/protein engineering
Hormones and growth factors
Molecular Synthesis
Drug Delivery
Cell Receptors/ Signaling/ Pheromones
Classical/Traditional Breeding
Molecular modelling
Hybridization
Embryo manipulation
Natural Products Chemistry
Structural Biology
Protein Work
Combinatorial Chemistry
Tissue engineering Figure 22: Requirements for Various Technology Platforms
Viral vectors
Processing of Blood Products and Substitutes
Biomaterials - 0 2 4 6 8 10 12 14 16
National Biotech Survey 2003 57 2.2.7 Biological Resources A number of biological resource centres have been established by research groups and companies in the course of their work. These are listed in Table 2. They have been identified through secondary sources and may not represent a complete list. South Africa has a wealth of resources at its disposal that include a vast diversity of plant, animal and microbial life, an excess of clinical cases and pathology samples of globally important diseases such as HIV/AIDS, tuberculosis etc., and a human population that represents around 90% of the world’s genetic diversity. These resources are potentially invaluable sources of novel molecules and information on disease mechanisms, drug efficacy etc., and need to be preserved and protected to ensure that maximum benefit is realized locally. The establishment of a biorepository in South Africa has been proposed by a consortium in the Western Cape. The biorepository would allow the supervised exploitation of our vast clinical and pathological resources for the development of breakthrough diagnostics, prognostics and therapeutics. It has been proposed that the biorepository serve as a central store for clinical samples available to all stakeholders involved in human health research and development. It is important that more such initiatives are established and that measures are taken to avoid the flow of our resources and potential IP out of the country.
Table 2. Resource Collections in South Africa
Organization Collection Description
University of Stellenbosch, Brain bank Fully archived surgical and medical neurology, paediatric neurology Neuropathology Unit and forensic neuropathology samples collected since 1977, in many instances with relevant CT/MR images. The collection is being continually updated and is a national resource, available for research by all academic institutions.
ARC-Infruitec-Nietvoorbij, Viticulture Grapevine Genebank The grapevine gene bank provides genetic resources for viticulture, Division: Wine, Table and Raisin material for cultivar evaluation, and raw material for taxonomic, Grapes physiological and plant pathological studies. A database for ampelographic, phenological and viticultural data of different cultivars has also created and can be used by students and researchers. University of Cape Town, Division of UCT Wildlife Cell Bank A major fibroblast cell culture collection of free-ranging Southern Chemical Pathology African wildlife developed over the last 18 years. The collection includes more than 50 species of mammal, and large numbers of individual samples for some species represented in the bank. This represents probably the second largest such bank in the world, and is unique in the variety of species represented.
University of Cape Town, Tissue South African Dialysis and The unit collects and collates information and publishes an annual Typing Unit, Department of Transplantation Registry report for the South African Dialysis and Transplantation Registry that Immunology covers activities of all the units in South Africa where dialysis and/or transplantation is performed.
University of Cape Town, Tissue South African Bone Marrow The South African Bone Marrow Registry collects and lists Typing Unit, Department of Registry prospective bone marrow donors locally and serves as a hub for Immunology procuring unrelated donors for both local and international transplantation.
Medical Research Council, TRAMED-III - traditional medicines The traditional medicines database, TRAMED-III, has information on Department of Pharmacology, database botanical taxonomy; plant vernacular names; and reported medicinal University of the Western Cape treatments, chemical information, pharmacological and toxicological content.
Medical Research Council, Cancer Registry PROMEC operates a population-based cancer registry in the Programme on Mycotoxins and Transkei region of the Eastern Cape Province. The registry provides ExperimenNationaltal Biotec Carcinohgen Sesisurvey 2003 basic data on spatial and temporal changes in cancer patterns in th5e8 (PROMEC) region, particularly with respect to oesophageal cancer. Organization Collection Description
Programme on Mycotoxins and Transkei region of the Eastern Cape Province. The registry provides Experimental Carcinogenesis basic data on spatial and temporal changes in cancer patterns in the (PROMEC) region, particularly with respect to oesophageal cancer.
Medical Research Council, MRC Fungal Culture Collection More than 7 000 cultures, mainly Fusarium species, other toxigenic Programme on Mycotoxins and species and medically important fungi, are preserved and maintained Experimental Carcinogenesis by either lyophilisation (freeze-drying), at -80°C in glycerol, distilled (PROMEC) water or agar slants. The collection is unique from both a food-borne and pathogenic fungal point of view and is one of the largest collections of Fusarium cultures as well as toxigenic fungi in the world
Medical Research Council, Clinical & WHO TB specimen bank This is a collaborative project with the WHO and two other countries Biomedical Tuberculosis Research aimed at developing a well-characterized specimen bank from TB Unit patients from various feeder clinics in the urban and peri-urban areas of Durban.
University of Stellenbosch, Culture collection of food bacteria A culture collection of bacteria relevant to the food industry Department of Food Science
Rhodes University, Department of Herbarium Approximately 200 000 plant specimens Botany, Selmar Schonland Herbarium
National Botanical Institute, Herbarium Data bank and information centre on the winter-rainfall flora of South Compton Herbarium Africa
National Botanical Institute, National Herbarium Largest herbarium in Africa and includes the Saasveld Herbarium and Herbarium Pretoria the Forestry Herbarium. National Botanical Institute, Audrey Herbarium Herbarium run by the George Botanical Gardens. Moriarty Southern Cape Herbarium Medical Research Council, South African Trials Register (ATR) The African Trials Register is a database of controlled trials performed African Cochrane Centre in Africa. There are currently 2250 records in the register, 1417 of which are RCTs and 794 CCTs. The remaining 39 records are cohort and other non-randomised trials. A total of 1160 records were identified from journals published on the African continent, with the remainder from journals published elsewhere.
Natal Herbarium Herbarium The Natal Herbarium is a centre for the study of the indigenous plants of the eastern region of South Africa. This region includes three of the IUCN internationally recognised centres of plant diversity
University of the Free State, MIRCEN Yeast Culture Collection An extensive and unique yeast culture collection which consists of Department of Microbial, and database more than 2 000 yeast cultures representing 90 different genera and Biochemical & Food Biotechnology more than 420 species. The collection is continuously expanded by the depositing of yeasts with unique characteristics isolated from various southern African habitats. It also serves as a depository for cultures from S.A. Breweries, SASOL Ltd and AECI Ltd.
University of the Free State, STR allele frequencies database A database for STR allele frequencies for the population of the Free Department of Haematology and State. Cell Biology
University of Pretoria, Forestry and TPCP Culture Collection The culture collection of the TPCP currently consists of more than 10 Agricultural Biotechnology (FABI) 000 cultures of mainly plant pathogenic fungi related to forestry diseases. This includes one of the largest collections of Ophiostomatiod fungi in the world, as well as populations of Sphaeropsis, Botryosphaeria, Cryphonectria, Lasiodiplodia and Fusarium.
University of Pretoria, Faculty of Onderstepoort Animal Blood bank Animal Blood bank Veterinary Science
Technikon Pretoria, Centre for Tissue bank Cell and tissue banking and transplantation Tissue Engineering National Biotech Survey 2003 59 Organization Collection Description
Tissue Engineering
University of the Free State, Mucoralic Fungus Culture Mucoralic Fungus Culture Collection Department of Microbial, Collection Biochemical & Food Biotechnology
University of Stellenbosch, Fungal Culture Collection Fungal Culture Collection Department of Plant Pathology
ARC-Plant Protection Research National Collection of Fungi National Collection of Fungi Institute
SA Bureau of Standards SABS collection of Bacteria and SABS collection of Bacteria and Fungi Fungi
University of the Witwatersrand, Culture Collection of medically Culture Collection of medically important Bacteria and Fungi Pneumolocal Diseases Research important Bacteria and Fungi Unit
Medical Research Council, National South African Mycobacterial Culture South African Mycobacterial Culture Collection Tuberculosis Research Programme Collection
ARC-Infruitec-Nietvoorbij Infruitec Culture Collection Infruitec Culture Collection
ARC-Plant Protection Research South African Rhizobium Culture South African Rhizobium Culture Collection Institute (Roodeplaat) Collection
University of the Witwatersrand, DNA databank The DNA databank, comprising of patient specimens is continually Department of Haematology being added to over time. There is an on going collaboration with the SAPS forensic sciences laboratory in setting up a National DNA database and DNA bank, for the purposes of forensic identification, validation of STR technology and the identification of possible diagnostically important loci. Potchefstroom University for CHE, Data bank on pharmaceutical raw These specifications will include data on inter alia crystal size and School of Pharmacy material specifications form, optical and chiral purity and any other property necessary to ensure product safety, quality and efficacy Potchefstroom University for CHE, Uni-algal culture collection Algal species found in water systems Department of Botany
Health Knowledge Network Health Knowledge Network The health knowledge network is a health information resource that ( h t tp://www.sahealthinfo.org / ) offers information on HIV AIDS, alcohol and drug abuse, chronic disease prevention, novel drugs, nutrition, tuberculosis, malaria and other health issues in Southern Africa
National Botanical Institute, Ria Herbarium This collection covers material collected from rivers, estuaries and the Olivier Herbarium ( sea. The herbarium consists primarily of specimens collected along the Eastern Cape coastal plain and contains a collection of macroalgae. Medical Research Council, Cancer South African National Cancer South African National Cancer Registry Epidemiology Research Group Registry
ARC-Small Grain Institute Small Grain Germplasm Collection The collection represents the only one of its kind, and is available to all interested parties in South Africa
ARC-Grain Crops Institute Groundnut, Soybean and Sunflower The sunflower germplasm collection consists of 1075 entries which Germplasm Collections are renewed in a ten year cycle. The soybean germplasm bank at Potchefstroom consists of 2162 true breeding lines and populations. The working collection consists of 250 of these entries and the base collection includes the other 1912 entries. A database with all the relevant information is kept and updated annually. The collection is freely available to interested persons.
ARC-Vegetable and Ornamental Fynbos genebank A unique collection of living plants, identified for their economic Plant Institute horticultural traits and representing biodiversity in the species
National Biotech Survey 2003 60 Organization Collection Description
ARC-Onderstepoort Veterinary Type and secondary worm Type and secondary worm collection including more than 100 Institute collection species, described first in South Africa, that affect animals
ARC-Animal Improvement Institute National Allele Database and A national reference DNA catalogue to store and index DNA samples National DNA Reference Catalogue collected by animal owners
Council for Scientific and Industrial Mycelial fungi, yeast and bacterial Includes >4,500 isolates from >400 species of mycelial fungi, yeast Research, Bio/Chemtek culture collection and bacteria
Council for Scientific and Industrial Indigenous Plant Extracts Library Collection >11,000 plant extracts Research, Bio/Chemtek
National Biotech Survey 2003 61 SECTION D: THE BIOTECHNOLOGY INDUSTR Y ENVIRONMENT IN SOUTH AFRICA
This section discusses aspects of the environment in which biotechnology groups operate in SA, including the various organizations that lend support to biotechnology stakeholders, legislation relevant to biotechnology, the role of government in biotechnology, strategies and initiatives that affect the industry, and funding for biotechnology.
1. Government Involvement in Biotechnology
There are a number of different departments in national government playing a role in the biotechnology industry in SA. These departments and their involvement in the industry are detailed below.
1.1 Department of Science and Technology (DST) The Department of Science and Technology (DST) is the lead department with respect to biotechnology (and R&D in general) in South Africa. It also co-ordinates the biotechnology-related activities of all other departments and interacts directly with Treasury with respect to public funding of biotechnology interventions. DST’s involvement in biotechnology includes, among others, the drafting and implementation of the National Biotechnology and National Research and Development Strategies, coordination of the GODISA programme, and overseeing the activities of the NRF and NACI.
1.1.1 South African National Biotechnology Strategy, 2001 ( http://www.ds t.gov.za/programmes/biodiversity/biotechstrategy.pdf ) The South African National Biotechnology Strategy, published in June 2001 (19), outlines the intentions of government to focus and co-ordinate interventions aimed at stimulating the development of biotechnology (particularly 3rd generation) in South Africa. The strategy was developed by a core academic and policy team under the direction of DACST, and also involving the Department of Trade and Industry (DTI), the Department of Health (DoH), the Department of Environmental Affairs and Tourism (DEAT), and the National Department of Agriculture (NDA). It was passed by cabinet following a public feedback process.
In developing the strategy for South Africa the expert panel considered experience and benchmarks from other countries, successful in biotechnology. The main conclusions drawn from this exercise included the need for a well- resourced body to champion biotechnology nationally, a deliberate effort to build scientific and technological capacity and the need to do the latter in response to explicit national and international needs for products and processes. The key interventions currently being implemented as a result of the strategy include the following: - The creation of a number of Biotechnology Regional Innovation Centres (BRIC’s) to manage the dissemination of funds for biotechnology projects and to stimulate the creation, successful protection and exploitation of new intellectual property - The creation of a National Bioinformatics Network (NBN) to develop capacity and support services in bioinformatics
National Biotech Survey 2003 62 - The development of Biological Resource Centres (BRC’s) to ensure the adequate protection and optimal use of SA’s biodiversity - The establishment of a Biotechnology Advisory Committee (BAC), which will be the responsibility of National Advisory Council on Innovation (NACI), to implement the strategy, co-ordinate R&D, and address national ethical issues - The establishment of a Bioethics Committee - The development of public understanding of biotechnology Other issues requiring attention, discussed in the strategy, include the incentivising of investment in the BRIC’s by the biotechnology industry through the DTI; the prioritization of specific national imperatives such as the development of a HIV vaccine; the review and amendment of the existing legislative framework, e.g. revision of the Patents Act; the seeking of international co-operation for technology procurement, particularly through the BRIC’s and existing bilateral agreements; the establishment of a venture capital fund and incentives to support private sector R&D; and the development of the appropriate human resources.
The BRICs and NBN are discussed in more detail in Section 2. The Public Understanding of Biotechnology (PUB) programme will promote clear, balanced, and broad understanding and public awareness of biotechnology and its potential applications. The Foundation for Education, Science and Technology (FEST), which now falls under the NRF, is the appointed implementing agency of the PUB programme. FEST has been granted R15 million from DST over a three-year period to promote dialogue and debate on biotechnology issues, including genetic modification, and to provide a single biotechnology vision for South Africa. The target audience includes all facets of society, with an emphasis on consumers, educators and learners. PUB will focus on new, innovative approaches to reach and involve diverse audiences, and will disseminate accurate and factually correct information on biotechnology.
1.1.2 National Research and Development (R&D) Strategy ( http://www.dst.g ov.za/legislation_policies/strategic_reps/sa_nat_rd_strat.pdf ) South Africa published its R&D strategy in August 2002. The biotechnology strategy directly defines the Government’s intentions with respect to biotechnology, and the R&D strategy modifies this slightly and contextualizes biotechnology within the broader intent of developing South Africa’s competitiveness in the global knowledge economy. The R&D strategy was also published a year later and suggests further development in the South African Government’s strategy. As an example, the R&D strategy places relatively more emphasis on integrating the National System of Innovation. It recognizes that meaningful innovation occurs at the interface between research institutions and industry, and that only industry can create products and services, employment and wealth.
The concept of a National System of Innovation (NSI) was first introduced in the White Paper on Science and Technology published by DACST in 1996 (4). The NSI is defined as "a set of functioning institutions, organisations and policies which interact constructively in the pursuit of a common set of social and economic goals". Enhanced innovation in SA has the potential to achieve the following national development imperatives: • accelerated economic development • sustainable development for poverty alleviation • rural development
National Biotech Survey 2003 63 • small business development • human resource development • black economic empowerment • infrastructure development
The NSI depends largely on the science and technology institutions and on the development of highly skilled manpower. The government is encouraging innovation through the establishment of programmes to support the development, commercialization and application of new biotechnologies and to facilitate technology transfer and technology diffusion. Also being addressed are the improved use of value chains and the existing science and technology infrastructure, and further integration of these into local economic and provincial growth and development strategies. The R&D strategy will be used to co-ordinate existing institutions and initiatives such as the biotechnology strategy and the incubation and economic development programmes, in order to improve the efficiency of South Africa’s R&D and innovation system, which has been fragmented to date.
The R&D strategy rests on 3 pillars, namely: Innovation Science, engineering and technology (SET) human resources and transformation Creating an effective government science and technology system
The innovation pillar involves the creation and funding of a range of technology missions. One of the key missions is biotechnology. A dedicated institution, the Foundation for Technological Innovation (FTI) will operate as a knowledge-based financing agency concentrating on innovation within each of the technology missions. It will fund innovation across public and private sectors, and across the value chain from concept to market and will be directed by DST. Its key focus is high-cost development and market acceptance stages through commercialization, incubation and diffusion.
The strategy recognizes an important systemic weakness in South Africa, described as the ‘innovation chasm’, the gap between research and successful and sustainable commercialization. This gap needs to be bridged by appropriate long-term measures and dedicated institutions providing innovation support. Specifically, disparate innovation, incubation and diffusion initiatives need to be coordinated and focused on strategically important technology missions. The strategy suggests that national excellence can be achieved by focusing our basic science on areas where we are most likely to succeed because of important natural or knowledge advantages. One of these key areas is the confluence of indigenous knowledge and indigenous biotechnological resources, such as plants or microorganisms.
An important new intervention proposed by the strategy is the establishment and funding of an Intellectual Property Fund (IPF), which will assist in identifying and protecting competitive IP, so that it can be exploited to the benefit of the country. Another vital area is human resource development. The NRF is adopting a highly targeted approach towards increasing excellence in mathematics and the sciences among black matriculants and young women. It is recognized that the establishment of new Centres of Excellence will be required in order to draw young people towards careers in scientific research and to ensure that such careers are sustainable.
National Biotech Survey 2003 64 With respect to appropriate and effective government support, the strategy specifically recognizes the importance of integrated and seamless funding of the functions of basic research, innovation and venture capital. Venture capital stimulation and fiscal incentives to stimulate the private sector are the responsibility of the Department of Trade and Industry and its agency, the Industrial Development Corporation (IDC). All government departments contributing to the innovation system will be coordinated by the DST. The R&D strategy depends on doubling government investment in science and technology over the next 3 years and is consequently characterized by the introduction of key measurable performance indicators as benchmarks.
1.1.3 Biotechnology Road Mapping Exercise The Biotechnology Roadmapping Project, initiated in 2002, is linked to the implementation of the National Biotechnology Strategy, and follows on from DST’s Foresight study. The latter identified the key technology areas that will play a pivotal role in driving and growing existing and new economic areas as being Information and Communication Technology, Advanced/New Materials and Biotechnology. The Biotechnology Roadmapping Project was initially aimed at mapping future human resource, research and development, and infrastructure needs and identifying strategic actions to ensure the future competitiveness of the industry. The focus has since shifted to mapping issues directly related to competitiveness. Thus, the final plan will assist in developing strategies for future markets and technological products or services to support the country’s competitiveness, and will influence the application of government instruments within the next 1-3 years, with longer-term consequences. The project has been coordinated by the Medical Research Council (MRC) and is in the final stages of development.
Several working groups were established in 2002 to develop roadmaps for the various focus areas, e.g. human health, plant biotech, animal health and animal production, industrial processes, mining and environmental biotechnology, new biotechnology platform/clusters (e.g. marine & aquaculture biotechnology, speciality biotechnology, bioneutralising technology to neutralize bioweapons, bioenergy), and human resources and skills development, infrastructure needs and funding requirements. The technology roadmaps developed by these groups have been assembled into a final report summarizing the future technology requirements for SA (5).
Five key platforms have been identified as being high priority, i.e. genomics, transgenesis, cell and tissue culture, process and product technologies and convergence technologies. A number of sub-technologies and subsidiary technologies were defined for each and analyzed in terms of existing capacity, and major gaps and barriers to its further development. Sub-technologies common to all 5 platforms were found to be functional genomics, high throughput screening, bioinformatics, gene expression analysis, biosafety and high throughput genome sequencing. This list closely mirrors the key technology platforms identified in the current survey as being required by stakeholders within the next 5 years, i.e. DNA sequencing/synthesis/amplification techniques, cell/tissue culture, recombinant DNA technologies, bioinformatics, biochips, and molecular high throughput screening. The report, due to be released shortly, maps a plan for the development of the key technologies over the next 5-10 years and provides an in depth analysis of the driving forces behind the opportunities for improvement.
National Biotech Survey 2003 65 1.1.4 GODISA Incubator Pr ogramme The GODISA programme is managed by the DST, and supported by the DTI, the Department of Labour and the European Union. It focuses on stimulating the SMME sector by establishing sector-specific incubation facilities, support centres and technology demonstration centres. Facilities established to date include the following: Technology Incubation Centres: - eGoli BIO Life Sciences Incubator - Acorn Technologies - Brainworks Technology Incubator - Gauteng Software Incubator (SoftStart) - South African Chemical (SAC)/CHEMIN Incubator - Timbhale Technology Incubator Technology Demonstration Centres: - Zenzele Technology Demonstration Centre Innovation Support Centres: - Kwazulu Natal Innovation Support Centre (Voxel Support Centre)
The eGoli BIO and Acorn Incubators, situated in Modderfontein and Cape Town, respectively, are focused on biotechnology, and are discussed in more detail in Section 2.
1.1.5 National Advisory Council on Innovation (NACI) ( www.na ci.org.z a ) The National Advisory Council on Innovation (NACI) was created by legislation [NACI Act of 1997] to advise the Minister of Science and Technology on the role and contribution of science, mathematics, innovation and technology, including indigenous technologies, in promoting and achieving national objectives. NACI falls under the auspices of DST and is particularly involved in managing and developing South Africa’s Innovation System. It played a key role in the development of the R&D strategy and is likely to play a pivotal role in its implementation. The NACI website is a particularly useful source of links to information on science and technology in SA and different national and international funding streams
1.1.6 National Research Foundation (NRF) ( www.nr f.ac.za ) The National Research Foundation is an autonomous statutory body established “to support and promote research through funding, human resource development and the provision of the necessary research facilities in order to facilitate the creation of knowledge, innovation and development in all fields of science and technology, including indigenous knowledge and thereby to contribute to the improvement of the quality of life of all people of the republic.” The ultimate aims of the NRF are to improve the quality and quantity of research outputs and patents, and the numbers of R&D staff and researchers, hopefully resulting in increased participation in the global knowledge economy and increased competitiveness. The NRF is the major body responsible for funding research and human resource development at higher education institutes (HEI’s) in SA, and is a key player in the National System of Innovation. It is responsible for the full innovation value chain and manages the National Facilities as well as the Innovation Fund (17). The foundation therefore plays a vital role in the development of biotechnology in SA.
National Biotech Survey 2003 66 1.2 Department of Trade and Industry (DTI) The DTI is mandated to support industry development with technology, and specifically biotechnology, as one of its focal areas. Support is provided in the form of funding through incentive schemes, information on potential markets, and marketing of local products abroad. Whilst DST is more concerned with R&D the DTI is focused on innovation and commercialization of biotechnology, although under the direction of DST. In particular the DTI is responsible for modification of the Patents Act and the establishment of a venture capital fund through its agency, the IDC. It will promote South African biotechnology internationally and seek further investment for the industry, for example, by interacting with industry and the Treasury to identify appropriate incentive and fiscal measures to stimulate the local biotechnology industry. The DTI specifically represents the interests of the private biotechnology industry sector.
The IDC also invests in specific, usually relatively large (in excess of R50 Million), projects related to particular industries. Although biotechnology is not a current industry sector, the IDC does invest in both agro-industries and the chemical sector, each of which applies biotechnology. The IDC also supplies consultants to assist with business planning and research. The DTI and the IDC have made significant contributions to the development of at least 3 of the existing core biotechnology companies in SA through investment and assistance with foreign trade. In addition, the IDC contributed to the establishment of SA’s first dedicated biotechnology venture capital fund, Bioventures.
Trade and Investment South Africa (TISA), a division of the DTI, liaises with provincial agencies to co-ordinate export and investment opportunities. In particular, TISA focuses on promoting sectors of the South African economy that show the greatest growth potential and marketability. These sectors include: agro-processing, textiles and clothing, leather and footwear, automotive and transport industries, cultural industries, tourism, information and communications technology, chemicals and biotechnology, and metals and mineral beneficiation and capital equipment.
1.3 Department of Health ( D o H) The DoH is particularly concerned with identifying new prevention and treatment strategies for pandemics and diseases such as HIV/AIDS, TB and malaria. It will support the development of and will use, for example a HIV vaccine developed by means of biotechnology through the South African AIDS Vaccine Initiative (SAAVI). The department is also concerned with ethics, and will coordinate the National Bioethics Committee and advise the BAC. Legislation falling within the responsibility of the DoH that is relevant to biotechnology includes the registration and regulation of medical products and the labeling of foodstuffs, e.g. the GMO content.
1.4 National Department of Agriculture (NDA) The NDA implements the GMO Act and the Plant Breeders Act and is involved with the issues relating to indigenous knowledge systems. It is specifically involved with biosafety issues and will advise the BAC on this. The department has released a Strategic Plan for South African Agriculture in which it defines its future role in the sector. A major function of the department is the conservation of natural resources through sustainable agricultural practices.
National Biotech Survey 2003 67 1.5 Department of Environmental Affairs and Tourism (DEAT) The Department of Environmental Affairs and Tourism’s primary involvement in biotechnology is in developing indigenous knowledge protection legislation under the leadership of DST, and regulations for the exploitation of our biodiversity. The department has published a White Paper on Conservation and Sustainable Use of SA’s biological diversity ( www.po lity.org.za/govdocs/white_papers/diversity.html ) and is currently drafting the Biodiversity Bill and the Protected Areas Bill, which could have significant implications for all levels of government, industry and business. The broad aim of the 2 bills is to ensure the sustainable use of the country’s unique biodiversity and to ensure that it remains for the “common good.” Biodiversity inherently belongs to all and consideration needs to be given to the application and distribution of rights for the marketing, development and use of biodiversity. The Biodiversity Bill will set the guidelines for the sustainable use of biodiversity and, as such, will be crucial legislation in defining and determining biodiversity’s role in biotechnology. Also relevant to biotechnology is the DEAT’s role in regulating the transfer of technology and materials into and out of South Africa.
1.6 Department of La bour ( D oL) The DoL has committed to funding human resource development through the Skills Development Act and the Human Resources Development Strategy. A National Scarce Skills Financial Assistance Scheme is currently being established by the NRF in partnership with the DoL and DST to address scarce skills, including those relevant to biotechnology. These departments will be responsible for ensuring scarce skills training especially in SET in HEI’s. The allocation of resources from the National Skills Funds for bursaries and scholarships will be recommended by the DoL. Funding for the training of black and woman students in scarce skills will be prioritized, with an emphasis on quality. It is recognized that a long-term commitment is required to ensure that students are guaranteed funding for the completion of their studies. As a part of the scarce skills schemes, DoL will provide funding amounting to R10 million for human resource development in bioinformatics, in partnership with the National Bioinformatics Network. These funds will be managed by the NRF. Other programmes for training in scarce skills relevant to biotechnology are planned.
1.7 Department of Education ( D o E) The DoE promotes curriculum development in line with the needs identified in the R&D strategy – essentially for mathematics, science and life skills. It is the department responsible for coordinating tertiary level education, for example specialized biotechnology education, and it determines the level of financial support of research at universities and technikons. The department’s National Plan for Higher Education was developed for the transformation of and the provision of increased and broadened access to higher education. An important objective is the development of human resources to provide the necessary skills for the knowledge economy and to ensure that staff profiles begin to reflect the race and gender balance of SA. Other issues include language policies in higher education, especially in relation to indigenous languages, and a greater emphasis on research.
Included in the National Plan is the intention to reduce the number of universities in SA to 11 and technikons to 6 through a series of mergers, and to add 4 “comprehensive institutions” and 2 National Institutes for Higher Education in provinces where no higher education facilities currently exist. The Department of Education will be responsible for the mergers, and the Government will provide the financial resources necessary to facilitate the
National Biotech Survey 2003 68 mergers and to ensure the stability and sustainability of institutions. It is anticipated that the first group of mergers will take place in January 2004 and the second group in 2005. In addition to the mergers, National Institutions for Higher Education will be established in Mpumalanga and the Northern Cape, to allow for the coordinated provision of higher education in regions of the country where there is no university or technikon. Resources have been set aside for the establishment of a National Higher Education Information and Applications Service. The two most significant outcomes of the National Plan on Higher Education with respect to research are research concentration and funding linked to outputs, and increased graduate enrolments and outputs at the masters and doctoral level. The implementation of the National Plan for Higher Education will have a significant impact on the biotechnology industry, both in terms of human resource development to feed into the industry and the increased integration of diverse research activities to create collaborative, multi-disciplinary research efforts that have sufficient critical mass to make an impact.
1.8 Legislation Relevant to Biotechnology Patents in SA are governed by the Patents Act of 1978. Two amendment bills were passed in 1997, the Counterfeit goods bill and the Intellectual Property Laws Amendment bill, to bring South Africa's laws into conformity with international trade obligations under the trade related intellectual property agreement of the World Trade Organization. The National biotechnology Strategy highlights the requirements for a review of the patent legislation, which will be the responsibility of the DTI.
The Genetically Modified Organism Act, Act 15 of 1997 (GMO Act), implemented in November 1999, covers biosafety issues for most genetically modified products, including the requirement for a full risk assessment before the introduction and commercialisation of GM crops in South Africa. It provides for the establishment of an Executive Council (EC), which makes decisions on all applications for work with GMOs, a Scientific Advisory Committee, which reviews the human and environmental safety of GMOs and advises the EC, a Registrar to administer the GMO Act on behalf of the Minster of Agriculture and issue permits, and an Inspectorate to monitor and inspect local work with GMOs. The EC is made up of representatives from 6 government departments, while the Scientific Advisory Committee consists of a panel of scientists. The Act also makes provision for public notification of GMO work.
Also related to GMOs are the regulations for the labeling of food derived from genetic modification, released by the Department of Health, and the Cartagena Protocol on Biosafety, which is the responsibility of the Department of Environment and Tourism. Agricultural products, including biological control products, are regulated by the Department of Agriculture through Act 36 of 1947, while the development of new crop cultivars is governed by the Plant Breeders Act. The Biodiversity and Protected Areas Bills will guide the use of biodiversity for biotechnology. The Medicines Control Act no. 101 of 1965 governs the registration and use of any substances of medical importance, excluding medical devices. A review of this act is pending. In addition to the above legislation, South Africa has signed bilateral agreements with at least 12 countries that include co-operation on biotechnology.
National Biotech Survey 2003 69 2. Support Services for Biotechnology
2.1 Market Opportunity for Support Services A clear constraint in the biotechnology industry in SA is the lack of business support for commercialization of IP, particularly for those stakeholders from the research community. As part of the survey, stakeholders were asked to indicate which support services they currently make use of, which support services they require but are unavailable to them, and which support services they are likely to require within the next 5 years. The results are represented in Figure 23. The aim of the question was to assess the market opportunity for support services in biotechnology. Therefore, where stakeholders indicated that the services were provided in-house or were not for biotechnology, these entries were not included in the analyses. The figure therefore represents only those support services that are likely to be outsourced (60/73 stakeholders that answered the question).
Figure 23: a.) The Current Use of and Future Requirement for Support Services in Biotechnology
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National Biotech Survey 2003 70 Figure 23.a does not show any clear trends in support service usage or requirement, except for the fact that financial management and legal services are used by the highest number of participating stakeholders. In most cases, the financial management services are attributed to surveyors, rather than to the provision of strategic input into financial management. A smaller number of stakeholders than expected indicated that they would be requiring support services in the future.
The highest revenues were spent on marketing, followed by legal services and financial management. If one ignores those revenues attributable to surveying services, the total spend on support services in biotechnology for last year from those that provided this data was just over R2 million. This does not represent a significant market opportunity for the support services sector, and at present there are only a small number of dedicated biotechnology service providers. The primary difficulty in this regard is the inherent shortage in funds for commercializing products, which means that even less money is available to pay for consulting services in this area. This is where the government- funded incubators and BRICs will play a crucial role, in that they are designed to provide services at subsidized rates and can therefore reach a higher number of stakeholders. With the growth in the industry in response to government and other interventions, the demand for support services is set to grow. This relates not only to business support services but also to other types of support services, such as laboratory and raw materials suppliers, core technology services, product testing services etc.
2.2 Existing Support Services for Biotechnology The survey identified at least 196 organizations and companies that currently offer direct or indirect support to biotechnology in SA. These include entities that provide business or legal support, suppliers of raw materials and scientific tools, incubators, venture capital firms etc. It is not practical to list all potential companies that may indirectly interact with or assist biotechnology stakeholders. The database, therefore lists only those that have shown a direct interest in biotechnology to date, with the exception of the venture capital/private equity firms, which are all listed regardless of whether they have expressed an intention to invest in biotechnology or not.
The most relevant support structures for the development of biotechnology in SA are the Biotechnology Regional Innovation Centres, the National Bioinformatics Network, the GODISA-funded incubators, and the technology transfer offices associated with the universities.
2.2.1 Biotechnology Regional Innovation Ce ntres As mentioned previously, the National Biotechnology Strategy (19) makes provision for the establishment of BRICs, which will serve as a vehicle for the channeling of funds into biotechnology by DST. The first BRICs were established early this year. There are 4 BRICs in total, Cape Biotech, BioPAD, ECoBio, and PlantBio. An Inter-BRIC Forum allows collaboration between the BRICs and a forum for dealing with common issues. The Cape Biotech, BioPAD, and ECoBio BRICs have been awarded R12.5m for 2002, R32 million for 2003, R39 million for 2004 and R52 million for 2005, while the PlantBio BRIC will receive a minimum of R7 million in years one and two and R42 million in year 3. The strategies of the individual BRICs are discussed below.
National Biotech Survey 2003 71 2.2.1.1 BioPAD ( www.bi opad.org.za ) The Biotechnology Partnerships and Development (BioPAD) BRIC was established by DST as one of five national innovation and support centres following the publication of the National Biotechnology Strategy. A CEO was appointed for BioPAD early this year, and, more recently, an Operations Manager. A trust will be established to administer the funds from DST. A key goal of BioPAD is to set up companies and stimulate economic growth. The BRIC has committed to funding a broad portfolio of projects in the areas of animal health, industrial, mining and environmental biotechnology. Four strategic thrusts have been initiated, viz, 1. BioPAD Seed Capital Alliance Platform for Enterprise (BioSCAPE): Via BioSCAPE additional funds will be leveraged from other investment sources to supplement DST support and to create a seed capital fund. 2. Vaccines and Enhanced Therapeutics Platform for Animals (VETPLAN): World renowned Institutes active in the area of animal health and production, such as the University of Pretoria, Onderstepoort Veterinary Institute (OVI), and Onderstepoort Biological Products, will be supported via platforms to cover areas such as DNA vaccines, unique drug delivery systems, and genetic approaches to breeding disease resistant animals. 3. Bioresource Centres Platform (BioCEP): Seed collections, Fungi collections Gene libraries and breeding programmes at various institutes will be supported in order to maintain and exploit our natural heritage. 4. Microbial Technology Platform (MiTEP): The exploitation of microorganisms and enzymes in the areas of environmental bioremediation, waste beneficiation, bioconversion industries and process research underpins the core activity of this initiative.
BioPAD will take equity in key ventures and royalties from others. It will also work closely with eGoli Bio and industrial partners for the incubation of projects. BioPAD has recognized its role in facilitating increased networking by engaging its stakeholders and other industry sectors in order to build a collaborative network that supports the development of new biotechnology businesses. BioPAD will seek to harness the national skills, expertise and technology platforms whilst acquiring cutting edge technologies internationally where appropriate. The BioPAD BRIC will fund consortium-based, biotechnology projects at different stages of the development value chain through a number of models, including venturing and licensing.
2.2.1.2 Cape Biotech ( http://www.c apebiotech.co.za/ ) The Cape Biotechnology Initiative (CBI) was established in December 2001 to facilitate networking and information sharing among biotechnology stakeholders in the Western Cape. The CBI, now known as Cape Biotech, was incorporated as a section 21 company in 2002 and led the Western Cape’s bid for a BRIC. Cape Biotech was awarded funding by DST to develop projects in the human health and industrial bioprocessing focus areas. The Cape Biotech team includes a CEO, appointed in January 2003, a business analyst, a knowledge/public relations manager, a chief financial officer and an executive assistant. A project manager will be appointed at a later stage. Cape Biotech promotes and develops the Biotechnology sector in the Western Cape, and represents the interests of all stakeholders in the region, including industry, academia, government and service providers to the sector. Its two major functions are industry stimulation and capacity creation, and investment of government funds in promising biotechnology projects. A trust is being established under the banner of Cape Biotech to manage this process.
National Biotech Survey 2003 72 16 projects, approximately 75% of which are in human health and the rest in industrial biotechnology, have been short-listed for potential inclusion in Cape Biotech’s project portfolio. A strategic framework has been developed to guide investment decisions. The strategy provides for the identification of relevant technology projects based on market attractiveness and current capacity and strengths in the region, with the aim of developing technology platforms that will increase the competitiveness of regional projects. An assessment tool that considers 75 different aspects of the biotechnology projects across 3 high level dimensions was developed to score projects aimed at developing specific products or services. Projects selected using this system will undergo a due diligence and contracting process before funding is committed.
2.2.1.3 ECoBio ( http://www.e cobio.co.za ) The East Coast Biotechnology Consortium (ECoBio) includes a number of biotechnology stakeholders primarily from the East Coast region, including the area stretching from Nelspruit, through Durban, Pietermaritzburg, to Grahamstown, and Port Elizabeth. ECoBio has been awarded funding by DST to set up a BRIC that will fund projects in human health and bioprocessing. A business plan was submitted to DST in mid-February and approved in late March. The CEO post has been advertised, and is likely to be appointed in September 2003. ECoBio has appointed a board of trustees and is finalizing the registration of a trust (Deed of trust was lodged with the Master of the High Court in June). The University of Natal is the lead organization in ECoBio, and will enter into a financial management contract with the trust to administer the BRIC funds. ECoBio is setting itself up to provide business and commercialization support services, including legal, accounting, financial, personnel, business planning, and IP management services to funded projects, occasionally using external service providers. Five projects from a total of 33 applications have been reviewed and short-listed for funding in the first phase i.e. first half of the current financial year. An independent IP due diligence is currently underway, after which full business plans will be commissioned. The first biotechnology projects will be funded later this year. A decision has been taken on 3 Regional Technology Platforms that will be funded in the short term, with seed funding being controlled by ECoBio. These include: the setting up of an integrated functional genomics and proteomics platform; establishment of a contract/clinical research organization and a data management system for clinical trials; and establishment of a semi-commercial bioprocessing facility for the development of large-scale biotechnology processes. A fourth technology platform centred on the biological control industry will be funded at a later date.
2.2.1.4 PlantBio ( http://www.e cobio.co.za ) The original BRIC Expressions of Interest submitted to DST by the Western Cape, Gauteng and Kwazulu-Natal consortia in July 2002 lacked critical mass in the area of Plant Biotechnology. Expertise in plant biotechnology is spread out across SA, and is also a contentious public issue. DST therefore called for a fresh proposal specifically in Plant Biotechnology.
After intensive planning, and with the support of the three BRICs and DST, it was agreed that PlantBio would be established as an independent National Plant Biotechnology Innovation Centre. The PlantBio BRIC will receive a minimum of R7 million p.a. for the first 2 years and R42 million in Year 3 to invest in plant biotechnology projects. The implementation of PlantBio is a few steps behind that of the other BRICs, and is being carried out by an Acting CEO/Interim Director, Prof Mark Laing, at the University of Natal, Pietermaritzburg, where the BRIC will be housed initially. A trust and a Board of Trustees are currently being set up. The trust will be independent of the University
National Biotech Survey 2003 73 but will use their financial systems in order to conform to the Public Funding Management Act (PFMA). The position of CEO will be advertised at a later stage. PlantBio will be run as a Portfolio Manager rather than a grant agency. A proactive strategy will be used to identify new projects and guide research directions in plant biotechnology. The primary focus of PlantBio will be on 4th generation genomics, 3rd generation gene manipulation and 2nd generation plant propagation methods. D ST has requested that funding initially focus on food security crops, e.g. cassava, sorghum, maize, etc. Fo restry and industrial crop projects will be considered by PlantBio in subsequent years.
2.2.2 National Bioinformatics Network (NBN) ( http://www.nbn.a c.za ) At present, SA lacks trained personnel, adequate computing, networking, teaching, training and laboratory facilities for bioinformatics. The development of bioinformatics in the country will require a substantial investment in infrastructure, particularly in computing and communications. The National Bioinformatics Network (NBN) has been awarded funds by DST and the DoL for a period of three years to address the development of capacity and expertise in bioinformatics in SA. The NBN business plan (16), developed by an interim Executive Chairman and Committee, outlines a 4-phase action plan, i.e. the initial launching phase from January – April 2003, with a projected budget of R15 million; a consolidation phase until April 2004, with a projected budget of R25 million; an expansion and consolidation phase of approximately two years with a projected budget of R25 million; and a future phase covering the next five years. The committee has recently appointed a CEO. A Board of Trustees, consisting of an Executive Chairman and a representative from each node and DST, will determine the policies and guidelines of the NBN, and will be responsible for the budget and finances. An Executive Committee will oversee the general running of the NBN and a Scientific Advisory Board (SAB), consisting of internationally recognized individuals, will provide advice on research, teaching and training programmes. The mission of the NBN will be: - To provide the information, tools, research, capacity development and solutions to serve the development and exploitation of biotechnology and the advancement of fundamental life sciences in South Africa, and - To ensure that the rapidly accumulating body of information from molecular and high throughput biology is centralised in the country and available to the South African community in ways which accelerate and promote scientific progress and global competitiveness.
An administrative node will be set up at SANBI to oversee the administration and communication and all planning aspects of the institution. A second center at UP will coordinate the activities of the nodes in that region. The funds will be administered by a trust and will initially be allocated to 6 nodes, University of Pretoria (UP) and the CSIR, under the auspices of the African Centre for Gene Technologies (ACGT); University of the Witwatersrand (Wits); University of Western Cape (UWC); University of Cape Town (UCT); Rhodes University (RU); and University of Stellenbosch (US). Applications for additional nodes from other institutions are invited. Each node will be managed by a node director, responsible to the home institution and to the NBN. Nodes will offer local research, training and teaching programmes, and will participate in the joint activities of the NBN group. Individuals working at non- participating institutions will also be able to apply for funding for specific projects. NBN funds will only be used to support Open Source projects. In situations where a BRIC requires a bioinformatics project to be contracted with the NBN, and the NBN accepts funds, the development of software will be performed according to the structure required by the funder. The NBN and the BRICs will interact closely, with the NBN providing bioinformatics support
National Biotech Survey 2003 74 to the BRICs, including the use of data banks and other facilities. The NBN will seek to stimulate the development of bioinformatics as an internationally competitive scientific and applied discipline in South Africa, to build human resources, to assist with the application of bioinformatics in business and academia, and to conduct research in locally relevant problems (16).
2.2.3 GODISA-Funded Incubators The SA government has recognized the importance of incubation and other support structures for the development of SMME’s, particularly those involved in the technology industries. The GODISA ("Nurturing - helping to grow") Programme is a South African Government initiative designed to address SMME development and hence economic growth and employment creation. The programme provides for the nationwide creation of Pilot Centres and Technology Incubators, each with its own sector focus, which will contribute to the enhancement of technological innovation, improvement of productivity, and acceleration of international competitiveness. The GODISA programme is managed by the DST, and supported by the DTI, the DoL and the European Union. eGoli Bio Life Sciences Incubator and Acorn Technologies are 2 GODISA-funded incubators that focus on the biotechnology sector. They are both funded with approximately R3 million p.a. to cover salaries and general running expenses as well as marketing, the organization of networking events, and other direct costs involved in providing business support to incubatees.
2.2.3.1 eGoli BIO Life Sciences Incubator ( www.e golibio.co.za ) The eGoli BIO Life Sciences Incubator was established as a result of a joint initiative between the CSIR, Bio/Chemtek, the Innovation Hub and AfricaBio, and was officially launched in February 2003. The ultimate goal of the incubator is to support at least 20 biotechnology companies as tenants, and to assist with the commercialization of life sciences research, products, services and technology platforms, by providing business infrastructure, guidance, strategy and financial and legal advice. In addition, it will actively source funding streams for individual tenants and/or projects and assist in the procurement and management of such funds. The incubator will seek to create an environment of learning and sharing in which information, experience and ideas are freely exchanged.
The incubator has access to the CSIR Bio/Chemtek’s wet labs and pilot production plants as well as the bioethics expertise of the University of the Witwatersrand’s Faculty of Health Sciences. Up to 70 people in 15 start-up companies can be accommodated at any one time at eGoli Bio’s newly refurbished premises in Modderfontein, Johannesburg. eGoli BIO is at present incubating 2 companies, one of which is an anchor tenant and one an incubatee, and is consulting to several clients/projects that do not reside as tenants within the incubator. In addition, there are several other projects that may need incubation in the near future, including 4 BioPAD projects. eGoli BIO recently launched V-Match, an innovative entrepreneur & venture matching program in which entrepreneurs are being matched with latent smaller research projects from various institutions and corporates to create new businesses that will be incubated by eGoli BIO.
2.2.3.2 Acorn Technologies ( www.a corn.org.za ) Acorn Technologies, is a non-profit (Section 21), government-funded life sciences incubator based in Cape Town. It focuses on the medical technology, biotechnology and pharmaceutical sector. The primary objective is to create
National Biotech Survey 2003 75 successful businesses, whether start-ups or existing entities. Clients are sourced on a national basis, from industry and Tertiary Educational Institutions according to selection criteria. Acorn was formed in March 2002 by a consortium which includes: the University of Stellenbosch Office for Intellectual Property, University of Cape Town (Faculty of Health Sciences), the Bioengineering Corporation (Pty) Ltd. and Catalyst Innovation Incubator (Pty) Ltd. Acorn offers on-site and 'virtual' incubation & mentoring, with services that include IP, legal management and protection, business planning, market research, strategic and financial evaluation, and logistical services. Importantly, the Incubator assists clients in raising the requisite finance, and to date has leveraged almost R50 million on behalf of its client portfolio. Acorn also provides residential & laboratory facilities, which offer a supportive environment for entrepreneurs. Acorn will incubate late stage R&D projects (<18 months to market) that are based on an innovative technological idea with export potential. The project should have an entrepreneurial team and the IP of the project should reside in South Africa. Projects that make it through an initial screen are taken on as incubatees. Incubation begins with full due diligence on the projects by Acorn, followed by the development of a business plan. Acorn does not invest directly in projects nor take equity in them; however, a primary role is the sourcing of the entrepreneurial finance for incubatees on leaving the incubator. Acorn is at present incubating 13 projects, 2 of which are housed on Acorn’s premises.
2.2.4 Other Support Services 2.2.4.1 Technology Transfer Offices at Universities The majority of the HEIs in SA have Research Offices that are responsible for the institution’s research management system. These offices monitor the quality of research and postgraduate teaching and co-ordinate and administer research funding. They also facilitate communication between researchers and potential funders. A small number of institutions have an additional body specifically designed to assist with the management and commercialization of research and IP emerging from the institution. Examples include UCT Innovation at the University of Cape Town; Unistel Technologies and the Office for Intellectual Property at the University of Stellenbosch; Research Enterprises at the University of Pretoria, and Wits Enterprise at the University of the Witwatersrand. These offices are responsible for managing and commercializing all research emerging from their relevant institutions, and their resources are, therefore, thinly stretched. This, together with the fact that such offices exist in only 4 out of more than 35 HEIs, illustrates the severe shortage of skills and support for entrepreneurship and biotechnology commercialization in SA.
The MRC and the ARC each have their own technology transfer offices responsible for the commercialization of IP generated by their respective units. Again, the capacity of these offices is insufficient to effectively beneficiate all emerging IP. Although not aimed directly at biotechnology, a number of business schools associated with HEIs are starting to focus on entrepreneurship and to provide support for new ventures, e.g. the Centre for Entrepreneurship and Innovation at UCT’s Graduate School of Business. In many cases, business planning, market research etc. are provided pro rata or at reduced rates to promising ventures as a part of the business curriculum.
National Biotech Survey 2003 76 2.2.4.2 South African Research and Innovation Managers Association (SARIMA) ( http://www.s arima.co.za ) The South African Research and Innovation Managers Association (SARIMA) was established in Feb 2001 to strengthen the research and innovation system in SA. It grew out of the Research Directors Forum (RDF), and is funded by a number of international institutions. SARIMA spans the divide between academia and business, and will provide training and development programmes for professional staff as well as attending to the implementation of the national strategic initiatives in science and technology innovation. Other objectives include the promotion of best practice in the management and administration of research and innovation, the advocacy of appropriate national and institutional policy in support of research and innovation, and participation in the development and testing of policy. SARIMA is developing and piloting standardized institutional research and innovation information management systems. The Association is open to everyone in both public and private organizations working in research and related technology transfer and innovation support activities
2.2.4.3 Africa-Bio ( www.a fricabio.com ) Africa-Bio is a non-political, non-profit biotechnology stakeholders association that serves as a forum for informed debate on biotechnology issues. Its primary role is to disseminate accurate information on biotechnology and facilitate networking among biotechnology stakeholders. Networking functions include breakfast sessions with invited speakers on a range of different topics. Public awareness is raised through workshops on biotechnology and biotechnology policy, trade and markets, information days, brochures, and introductory courses on biotechnology. Africa-Bio provides accurate information on biosafety regulations and develops brochures for information transfer for groups within the SADEC region. The organization has a global network and is affiliated to all of the foreign national biotech associations.
2.2.4.4 A Harvest Biotech Foundation International ( www.a hbfi.org ) A Harvest Biotech Foundation International is a US company, with offices in Washington DC, Nairobi and Johannesburg, that was set up to oversee technical and communication programmes for poverty alleviation, using biotechnology tools. Programmes to date have focused on tissue culture techniques for bananas and clonal trees to provide clean materials to farmers. In SA, A Harvest will concentrate on capacity building and communication outreach, particularly in the black communities, to ensure that the biotechnology industry in SA adequately reflects the demographics of the country. Activities will include working closely with government to review legislation relevant to biotechnology, e.g. the GMO Act, and drawing grassroot communities into the biotechnology industry. A Harvest has a comprehensive database of individuals involved in biotechnology in Africa, and is able to disseminated information to stakeholders, as required.
2.2.4.5 Biotechnology-Specific Service Providers In the private sector, there are a handful of companies offering dedicated biotechnology services, located predominantly in the Western Cape. Services on offer include business support services, project management, and legal services for biotechnology stakeholders. In addition, there are a number of companies providing laboratory supplies, scientific equipment and raw materials to biotechnology stakeholders, though these service providers are not confined to the biotechnology industry. The biotechnology industry in SA is at present too small to support more than a few dedicated biotechnology service providers. Although the biotechnology industry is fairly specialized and requires a different approach to other industries, a number of generic services available in SA can be used by
National Biotech Survey 2003 77 stakeholders in the industry. The number of dedicated biotechnology service providers is likely to grow in the future, in response to growth in the industry itself.
2.2.4.6 Technology Parks A popular concept in the global biotechnology industry is the development of science or technology parks that facilitate the proximal location of companies active in the high technology sector. These parks are often associated with universities and generally include an incubator. As yet, there are no dedicated biotechnology parks in SA. This is probably a function of the fact that there isn’t sufficient critical mass at present to sustain such a park. There are, however, a number of “technology” parks either in existence or in the planning stage that do/will cater to high technology companies, e.g. the Technopark at Stellenbosch and the Innovation Hub in Gauteng. Although the benefits of clustering stakeholders within the same industry into common geographical locations are clear, it is important that initiatives to this effect remain realistic about the demand for such an effort. There are a number of worldwide and local examples of ambitious attempts to establish technology parks that cannot be filled, and hence are not sustainable. Thus it is important that clustering initiatives in SA are integrated and are guided by market demand.
3. Funding for Biotechnology As with the other issues discussed thus far, the cross-cutting nature of biotechnology as well as the lack of clear boundaries in biotechnology activities make defining the funding opportunities for biotechnology challenging. It is not the intention, nor is it within the budget or timeframe, of the survey to capture every potential avenue for the funding of scientific research in SA, nor is it useful to list all venture capital and private equity firms in the country, even if they may indirectly have contributed or intend to contribute to biotechnology. We have therefore focused in this survey on only identifying the more prominent and specific avenues for accessing funds for biotechnology in SA. The majority of organizations that have contributed funding to biotechnology projects are listed in the database where available, however, many are applicable only to specific problems, e.g. diabetes, cancer etc., while others provide support for general scientific research and do not specifically target biotechnology projects.
Funding sources for biotechnology can be divided into public (government-backed) and private sources. Public funding is channeled through various departments or agencies. Some funds are generic and others specific to stimulating biotechnology. The survey has focused on the latter category. Public funds can be structured as grants, loans, rebates, tax incentives or co-investments, as well as venture capital (VC). Private funding can be divided into seed/incubation funding, angel investments, venture capital and private equity, and private donations, trusts or foundations. The main public and private funding mechanisms relating to biotechnology in South Africa are described below.
In addition to local funding sources South African biotechnologists have access to many different international funding sources. A comprehensive analysis of foreign funding available to biotechnology stakeholders in SA is a full study in itself, and falls outside the scope of this report. The database does, however, list some foreign agencies that have funded South African biotechnology projects to date, where available. The majority of these funding sources fall under the category of donor funding agencies, which provide funding to SA research groups on a competitive basis. They do not specifically target biotechnology research but may have originally funded research
National Biotech Survey 2003 78 that has led to a potential biotechnology product. Exhaustive lists of foreign donor agencies supporting general scientific research can be obtained from university research/contracts offices and are not covered in this survey. Another particularly useful source of foreign funding agencies is the Community of Sciences (COS) database for which a subscription is required.
3.1 Funding for R&D in SA General figures on R&D spending in SA are available from a number of government studies that have been commissioned over the years (14). The most recent completed R&D survey was conducted in 1997. Another R&D survey is currently being conducted by the Human Sciences Research Council (HSRC), and will provide updated figures. Recent estimates of the allocation of government funding to R&D are given in the NACI/DACST report (14). According to the report, in 2000, R&D performing science councils received a total of R970 million research funding from the parliamentary grant and R740 million from contract income. According to a CENIS survey in 2001 (CENIS:2002b), R&D income in the higher education sector in 2000 totaled R1.1 billion, with the sources broken down as follows: 14% internal funds, 18% agency funding, 10% THRIP, and 58% contracts (14). Government funding for R&D is generally channeled through the NRF. In 2002, the NRF’s core grant was R334 million, excluding funding for the Innovation Fund and THRIP. The budget allocation for 2003/04 is R377 million, including funding for FEST, which represents roughly a 10% increase from 2002. The core grant for the Research and Innovation Support Agency (RISA) of the NRF was R178 million in 2002/03 and is R188 million for 2003/04. The increase in the NRF allocation was limited resulting in little or no growth in grants, bursaries, the number of grants etc. The NRF has indicated the need to increase the NRF core grant to R1 billion over the next 3 years, in line with the amount proposed to fund the human resource development component of the R&D strategy (17; 22).
The 2000 R&D spending of the business sector was estimated by NACI to be R2.5 billion, based on the previous R&D surveys with 5% annual increases. Based on a limited survey of 17 corporations by DACST in 2002, R&D expenditure by business decreased from 1.46% of total company budget in 1997 to 0.97% in 2001, and the percentage of research work outsourced increased from 7% to 26% over this period. The report concludes that industry and government are the main funders of R&D in SA. The total estimated gross expenditure on R&D in 2000 was R5.725 billion, which amounted to 0.64% of GDP (14). These figures represent total R&D spending in SET and are not confined to biotechnology.
The 1998 report on biotechnology in SA (30) recorded a spending of around R200 million on biotechnology R&D in that year. The present survey aimed at quantifying recent spending on biotechnology through specifically targeted questions. Stakeholders were asked to indicate in which range of figures their annual expenditure on biotechnology, including running costs and salaries, for the last financial year should be classified. The results for those stakeholders that responded to this question are represented in the figure below. It is clear that the majority of research groups spent between R51 000 and R500 000 on biotechnology research in 2002, while the majority of core biotechnology companies showed spending in the R1-5 million range.
National Biotech Survey 2003 79 Figure 24: Distribution of research groups and companies by spending on biotechnology activities for 2002
20 18
s 16 p
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f Research Groups o 10
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e 8 b
m 6 Core Biotechnology Companies u
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5 Companies - o o o 0 - 0 o 1 i i i 1 i l l l 5 - l 0 l l l 0 1 5 . l i i i
R - i 5 0 0 R 0 > 1 m m m 0 R m 5 R 5 R R < Expenditure
Research Groups, n=41 Core Biotechnology companies, n=24 Non-core Biotechnology companies, n=16
Only 38% of core and non-core companies could provide details of total spending on biotechnology for 2002. Taking an average value for each of the ranges represented in the figure, and a conservative estimate of R10 million for the >R10 million category, the estimated total spending on biotechnology for this sample was R203.9 million. Approximately 7% of research stakeholders provided financial information amounting to an estimated R77.8 million spent on biotechnology activities in 2002. The Innovation Fund provided a further R11.6 million for biotechnology R&D during 2002, bringing total spending on biotechnology research and development for 2002 to in excess of R293 million. Although these are conservative estimates they reflect a 50% increase in annual spending on biotechnology since 1998, i.e. over the last 4 years.
Approximate funding amounts were given for 130 of the 911 projects listed as “biotech,” “potentially biotech” and “biotech services” projects (14%). These total around R256 million. It should be noted, however, that these figures reflect spending throughout the duration of the relevant projects, and are not confined to spending in 2002. A breakdown of funding and expenditure by sector, based on the available data, is unlikely to accurately reflect the relative spending in each, since a large proportion of the stakeholders are active in more than one sector and there is no indication of the proportion of funds allocated to each sector for these stakeholders.
3.2 Sources of Public Funding for Biotechnology Public funding and incentives are designed to deliver on the South African government’s strategic plans. The main imperatives include, but are not limited to, sustaining globally competitive innovation and R&D capacity, capital investment for critical industrial mass, job creation, particularly for previously disadvantaged individuals, technical competitiveness and technology transfer, empowerment, export development, social improvement and infrastructure development.
National Biotech Survey 2003 80 3.2.1 Biotechnology-specific public funding The biotechnology strategy has provided for specific funding interventions, channeled through DST, directed at the development of biotechnology in South Africa. The BAC will be funded with approximately R2 million to cover salaries of the chairperson and secretariat and to fund policy studies. The 3 primary BRICs have been awarded R12.5m for 2002, R32 million for 2003, R39 million for 2004 and R52 million for 2005, while the PlantBio BRIC will receive a minimum of R7 million in years one and two and R42 million in year 3. This represents a total biotechnology-specific funding commitment in excess of R450 Million over 4 years.
The two biotechnology-focused GODISA incubators, eGoli BIO Life Sciences Incubator and Acorn Technologies, are each funded with approximately R3 Million p.a. The funding has been committed for a period of 3 years. As a part of the R&D strategy, DST is in the process of establishing a patent fund, initially resourced with approximately R10 Million. A series of Biological Resource Centres will also be funded.
3.2.2 Non-biotechnology-specific public funding
Non-biotechnology-specific public funding for research and development in science and technology has, in some cases, been used to fund biotechnology projects. The majority of public funding for R&D is administered through the NRF as a parliamentary grant or through science councils. In addition to these funding avenues, the following incentive schemes are funded and administered by the DTI. These schemes are not directed specifically at biotechnology, but many of them are utilized by biotechnologists, both in the public and private sectors.
3.2.2.1 Incentives for R&D and Innovation The Technology and Human Resources for Industry Programme (THRIP) provides funding to innovative research programmes that involve an industry partner. The programme aims to increase the quality and number of appropriately skilled people for the management of technology for industry, to promote increased interaction between public researchers and industry, and to increase investment in research. In 2002/03 a total of R131.285 million was granted through the THRIP programme. This will increase to R199.584 in the next year (17). The major project categories used to classify THRIP-funded projects are fairly broad and more than one of them could include biotechnology projects, therefore the proportion of THRIP funding allocated to biotechnology cannot be determined from the THRIP annual reports.
The Support Programme for Industrial Innovation (SPII) is available to private sector enterprises, and aims to promote R&D of innovative products or processes. The Partnership in Industrial Innovation (PII) is available to manufacturing and IT industries and provides funding to stimulate R&D for high potential products and processes. The Innovation Fund (IF) was established by DST to promote technological innovation, increased networking and cross-sectoral collaboration, and competitiveness, quality of life, environmental sustainability and the harnessing of IT. In the IF’s business plan for 2003/04, there are plans to introduce the following new initiatives (funding streams) to enhance innovation: • Technology Missions to fund enabling technology platforms in existing, attractive economic sectors • Technology focus areas to promote innovation in new technology frontiers • Initiative for Developing Enterprising Activities (IDEA) to promote entrepreneurship through the commercialization of innovations from young entrepreneurs
National Biotech Survey 2003 81 • Technology promotion to promote R&D collaboration and entrepreneurship within the business and research community, especially inter-racial networking • Patent and technology Transfer Office to offer a comprehensive service with respect to patent applications and technology transfer for publicly funded research • Seed and start-up financing to finance the development of a product or prototype, proof of concept and initial marketing (17) The fund’s 2002/03 budget was R136 million, and will increase to R158 million in 2003/04. The latest available details of projects funded by the IF are for Round 3, i.e. 2000/01-2003. In this round, funding for Biotechnology projects totaled R37.5 million, with R11.6 of this allocated to year 3, i.e. 2002.
3.2.2.2 Incentives for Enterprise Development Fiscal incentives for SMME development include: • Small and Medium Enterprise Development Programme (SMEDP) - investment by SMME’s in assets • Foreign Investment Grant - investment in foreign-sourced capital equipment in South Africa • Skills Support Programme (SSP) - training costs for new or expanding SMEDP projects • Strategic Investment Programme (SIP) - tax deduction for investment into capital equipment by private companies • Critical Infrastructure Programme (CIP) - infrastructure development to fill gaps
3.2.2.3 Competitiveness and Export Incentives The Competitiveness Fund (CF) covers 50% of marketing, product, company and service development costs of South African manufacturers and service providers with the aim of encouraging them become globally competitive. A component of the CF is the Bumble Bee Programme (BBP), which provides free consulting services to micro- manufacturers with less than 20 employees. The Sector Partnership Fund (SPF) is available to partnerships of 5 or more companies aimed at increasing sector competitiveness and productivity. The Business Linkage Challenge Fund (BLCF) covers costs associated with the development and implementation of business linkages and improvement of competitiveness. Fiscal incentives for export development include the Export Investment Financial Assistance Scheme (EIFAS), which provides partial rebates on specific costs related to export marketing, e.g. travel, accommodation, transport, stands, marketing material, patents etc., and Import Duty Drawbacks, which aim to stimulate local value addition through manufacture and export.
3.2.2.4 Industrial development zones (IDZ) Although there are no current IDZ’s related to biotechnology, this incentive is nevertheless worth considering in terms of biotechnology clustering initiatives focused on industry. IDZ’s are industrial estates that enjoy duty-free production for exports and provide transport routes, facilities and services tailored for export-oriented industries. They would characteristically be situated adjacent to a port or an airport to facilitate immediate access to overseas markets.
3.2.2.5 European Union Sixth Framework Programme (EU6FP) A major source of public funding is through the EU6FP. The programme promotes the development of collaborative partnerships between EU members and other scientists and innovators around the world, particularly in developing
National Biotech Survey 2003 82 countries. The intended output is scientific and technological products and services, which can address health related challenges in the EU. The proposals must include at least one EU collaborator to qualify, and the programme is geared towards investing in larger, multi-collaborator and frequently multi-centre research and development projects. The most recent Sixth Framework Programme call for proposals covers the thematic research priority: "Life sciences, genomics and biotechnology for health," with a total indicative budget of Euro 411 million. DST is promoting and facilitating access to this extensive programme in South Africa, and offers a form of bridging finance for the development of proposals. DST’s FP6 Seed Funding Instrument provides financial support to enable South African researchers to visit Europe to meet with potential FP6 partners.
3.3 Private Funding for Biotechnology Private funding for biotechnology can be divided into institutional and private funding and funding of specific innovation budgets within companies. Private funding can be further divided into incubation funding, angel investments, venture capital and private equity, and private donations, trusts or foundations. A systemic funding gap has been hypothesized as being a key constraint in the development of the South African biotechnology market. This gap is best described as the early seed to seed investment stage, and tends to coincide to a large degree with the innovation chasm, described in the national R&D strategy. Within the biotechnology context the combination of direct incentives and investments and incubation and support environments aims to decrease the investment risk in biotechnology start-up ventures, making them more attractive to private investors and gradually closing the funding and innovation chasm.
3.3.1 Seed Capital This includes early stage funding for new ventures that require funding to enter into the commercialization process or are already in the initial phases of commercialization. This funding instrument is not directed towards R&D, and is high risk capital. There are private funding sources, which are stimulating the development of new biotechnology SMME’s by means of seed funding. Coupled with the judicial use of fiscal measures, these start-ups have been funded by angel investors. The angel investors are not easily apparent by virtue of the type of person involved. There also does not appear to be an obvious angel investor network, as can be seen in some larger economies. Nevertheless, analysis of the sources of funding used by the existing South African biotechnology SMME’s indicates the strong presence of angel investors.
The next funding stage, which forms the natural exit opportunity for angel investors or self-funded entrepreneurs, should be VC’s or private equity investors. In the case of biotechnology, however, the stage of development of the start-up venture usually coincides with proof of concept or a prototype. Existing VC investments in biotechnology in South Africa fall into 2 categories: there are a few investments in truly sustainable and competitive South African companies, with the remainder funding the final development, marketing and licensing or sale of South African innovations to internationally competitive, non-South African companies.
3.3.2 Venture Capital and Private Equity Private equity is late stage funding typically reserved for existing businesses with established track records of profitability that wish to expand operations. This instrument is also utilized in the funding of management buy-outs and similar deals. The private equity investment community in SA has made no direct investments in biotechnology
National Biotech Survey 2003 83 to date, although some of the funds have indicated an interest in funding or co-funding biotechnology investments. Venture capital represents later stage funding that is usually invested by specialized VC firms who manage funds on behalf of investors. Investments are usually made into medium to low risk ventures for a significant equity stake in the business.
South Africa has one VC fund dedicated to biotechnology investments, i.e. Bioventures. This R80 Million closed fund was established in 2001 and has made 6 investments to date totaling R42 million (as of July 2003), with an additional R3 million committed. The Cape Town-based company, Catalyst Innovations, has invested a total of around R32 million in biotechnology and medical device SMME’s to date. Although the company holds investments in biotechnology-related companies, it is not currently positioned as an investment fund. Chrysalis Biotechnology Holdings is a black economic empowerment company with and initial investment focus on established businesses and biotechnology service providers. A number of other VC funds have expressed an intention to invest to some degree in biotechnology, though this is not their core focus.
The IDC is state-owned and was established in 1940. It operates as a private company and looks at development in SADC. The IDC makes a profit and is self-financing. Its aim is the development of sustainable industries in SA. The IDC provides equity and loan financing, and focuses on manufacturing (core business), agribusiness (food, and beverages), mining, tourism, and techno industries. They have around R30 billion in total assets and an R800 million operating budget. Many large companies today were initiated by the IDC, e.g. Sasol, Alusaf etc. The IDC has made contributions to the development of at least 3 of the existing core biotechnology companies in SA through investment and assistance with foreign trade, and has contributed to the establishment of SA’s first dedicated biotechnology venture capital fund, Bioventures.
3.4 Foreign Sources of Funding for Biotechnology There is no evidence of South African private trusts or foundations investing in biotechnology. There are, however, international foundations, which specifically target South Africa and invest in biotechnology projects, particularly related to the biomedical field. Some of these include: Bill and Melinda Gates Foundation Ellison Medical Foundation Kirsch Foundation Rockefeller Brother Fund – South Africa Open Society Foundation for South Africa The Mellon Foundation The Carnegie Corporation of New York The Charles Stewart Mott Foundation The WK Kellogg Foundation
Additional sources of funding for biotechnology-related projects originate from foreign public funders and NGO’s such as the World Bank, through its subsidiary, the International Finance Corporation (IFC), USAID, UNDP and OECD, to name a few. The IFC has expressed an interest in funding biotechnology in South Africa. Most of these funders target poverty alleviation directly through SMME development, but some recognize and promote technology transfer and innovation support programmes through SMME’s.
National Biotech Survey 2003 84 Venture capital is an international activity, which means that South African ventures can approach VCs from any country for funding. The UK has a well-established venture capital sector that is one of the most active in Europe, particularly in biotechnology and healthcare. Major firms involved in the biomedical sector include 3i, Abingworth, Advent, Apax, Merlin Bioscience and Schroder Ventures. The USA also has a very wide selection of potential investors in biotechnology. An exhaustive list is beyond the scope of this study.
The funding sources for biotechnology described above and listed in the database do not represent the full complement of potential funding sources. Two useful portals for exploring other possible funding opportunities, including donor funding, are the Business Referral and Information Network ( www.bra in.org.za ) and the COS database ( www.c os.com - subscription required).
National Biotech Survey 2003 85 SECTION E: BIOTECHNOLOGY ACTIVITIES IN SOUTH AFRICA BY SECTOR
1. Human Health
1.1 The Application of Biotechnology to the Human Health Sector The applications of biotechnology in human health are extensive, and include strategies that employ the human body’s own resources such as proteins, enzymes, antibodies, as well as other naturally produced substances for disease prevention, treatment and diagnosis. Modern molecular technologies are being used to identify new markers for diseases and for disease-and drug-resistance that can be applied to the development of new preventive measures, therapeutics, and novel and rapid diagnostics. In addition, living organisms are increasingly being explored as potential sources of new biologically active molecules as well as new systems for the large-scale production of bio-molecules.
The market attractiveness and benefits to mankind make the human health sector the largest contributor to biotechnology activities globally. The annual global market for health products and services, which includes pharmaceuticals, medical devices and health care related services, is estimated at more than US$2 trillion. Biotechnology has the potential to address current healthcare challenges such as HIV/AIDS, tuberculosis, and malaria as well as developing novel therapeutics for rare diseases, for diseases that do not as yet have cures, for diseases where high levels of resistance to existing drugs are experienced, for diseases where progression and response to treatment are dependent on the genetic variability of patients, and for new diseases that are emerging, particularly in aging populations. The extraordinary specificity of cells and biological molecules and their interactions enables the development of precise and predictable solutions to specific health problems, with fewer side effects and unintended consequences. In addition, biotechnology enables cheaper, safer and more ethical production of a growing number of traditional as well as novel drugs and medical services.
1.2 Human Health Biotechnology in South Africa The medical challenges facing Africa are among the most extreme in the world, and directly stifle economic and social development. Focused and sustainable interventions are required to address these challenges. The results of the survey indicate that the majority of research groups, core biotechnology companies and biotechnology products and services currently offered are operating or applied in this sector. Healthcare products such as biopharmaceuticals and vaccines, produced by genetically modified organisms, have been available in South Africa for some time e.g. Human insulin, human growth hormone, and vaccines, however, the emergence of novel biotechnology health products from SA has been slow. This is clearly not due to a lack of focus on health issues in research, though it could be due to the long development periods generally associated with drug discovery, as well as the challenges in registering new health products in SA and internationally. The research groups and companies active in the human health sector of biotechnology and the research projects relevant to human health are broken down by region and focus area in Figures 25 and 26, respectively. Please note that figures for research groups and projects are for the 3 different categories, i.e. biotech, potentially biotech and biotech services, combined, while figures for companies include those for core and non-core biotechnology companies combined.
National Biotech Survey 2003 86 Figure 25. Distribution of a.) research groups, b.) biotechnology companies, and c.) research projects in human health by region a.) Research Groups
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Research Groups, n=256 b.) Biotechnology Companies 0 3
f s o e 0 i
r 2 n e a b p m m u 0 o 1 N C 0 g n e n e u t r l r l e ce n e e h a e a e t r st p n e t t p r t zu e F a st st vi S a a o u a a e C o a N W C N r w E W G P K
Biotechnology Companies, n=40 c.) Research Projects
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Research Projects, n=315
National Biotech Survey 2003 87 The trends are identical for all 3 categories, i.e. the largest number of groups and projects in human health are in the Western Cape, followed by Gauteng, Kwazulu Natal, and the Eastern Cape. The concentration of human health research in the Western Cape is probably due the presence of the headquarters of the MRC as well as 5 tertiary education institutes, 2 of which have sizeable and world-renowned health faculties.
Figure 26. Distribution of a.) research groups, b.) biotechnology companies, and c.) research projects in human health by focus area a.) Research Groups
100 90 80 s p
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National Biotech Survey 2003 88 c.) Research Projects
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Figure 26 represents only the top 14-15 focus areas for each biotechnology group. It is clear from the figure that the major focus areas in human health in SA overall are therapeutics, diagnostics, phytopharmaceuticals, natural health products and disease physiology, though the distributions of these focus areas differ for each group. The study of disease physiology and general disease mechanisms provides a foundation for development in other focus areas. The identification of drug targets, disease markers, and host and pathogen genes associated with disease provide a basis for the development of novel therapeutics, serological, molecular and physical diagnostic techniques, and preventative measures for the relevant diseases. The major diseases under investigation in this sample include HIV/AIDS, tuberculosis, malaria, and a number of inherited metabolic disorders.
2. Animal Health
2.1 The Application of Biotechnology to the Animal Health Sector Biotechnology has similar applications in animal health to those described above for human health, i.e. the development of rapid diagnostics, and new vaccines and therapies, but also includes animal production and improvement and animal nutrition (including probiotics and animal feeds). Biotechnology can be used in animal breeding, the preservation of animal genetic and reproductive material for conservation purposes, and reproductive technologies such as embryo transfer. In terms of nutrition, new biological products are being developed for use in animal feeds to enhance productivity and to provide additional fortification against common animal diseases.
The animal health and production sector generally has a lower profit margin in industry, especially products for livestock, since farmers cannot afford expensive diagnostics and vaccines. However, the application of technologies from the human health sector to veterinary problems reduces the development time and costs, and a number of large pharmaceutical companies have a minor veterinary division that is highly profitable. More than $4 billion was spent on animal health products in the United States in 1999, around 66% of which was spent on livestock and farm animal care (1). The animal feed market is currently worth approximately US$36 billion in annual revenues (9). Animal health is inextricably linked to the food supply chain, the demand for which is increasing rapidly with the growing global population. In addition, animal health issues can impact on human health in terms of the spread of zoonotic diseases, such as mad cow disease (BSE).
National Biotech Survey 2003 89 2.2 Ani mal Health Bi otechnology in South Africa SA is an important producer of animal products such as meat, hides, skins, wool and milk. In 2000 the national herd was estimated at 28,6 million sheep, and 13,5 million commercial cattle. In fact, animal production accounts for around 35% of South Africa’s total agricultural turnover (15). The health of livestock is therefore a vital factor in agricultural productivity and plays an important role in South Africa’s ability to export animal products. Approximately 10% of core biotechnology companies and 11% of research groups fit into the animal health sector, and the sector ranks 4th out of the 8 sectors among biotechnology research projects. Relatively few stakeholders are active in animal health, and most of them are associated with the Onderstepoort Veterinary Institute or the University of Pretoria. BioPAD is the only BRIC to be awarded funding for the animal health sector. Activities in animal health in SA have, however, not been insignificant. The Onderstepoort Veterinary Institute has played a prominent role in veterinary health in SA since its establishment in the early 1900’s, and has traditionally enjoyed a reputation as the top veterinary institute in Africa. Innovations feed into Onderstepoort Biological Products, which supplies vaccines to countries across the continent. A recent milestone for the animal health sector in SA was the announcement of the first cloning of a cow, achieved by the Embryo Plus Centre in Brits.
The research groups and companies active in the animal health sector of biotechnology and the research projects relevant to animal health are broken down by region and focus area in Figures 27 and 28, respectively.
Figure 27. Distribution of a.) research groups, b.) biotechnology companies, and c.) research projects in animal health by region a.) Research Groups
60 s p
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u 10 N 0 g n e n e u t r l r l ce e n e e h a e a e t r st n p e t p t r t zu e F a st st vi S a a o u a a e o C a C W N N r w E G W P K
Research Groups, n=89
National Biotech Survey 2003 90 b.) Biotechnology Companies 0 1
f s o e
i r n e a 5 b p m m u o N C 0 g n e n e u t r l r l e ce n e e h a e a e t r st p n e t p t r t zu e F a st st vi S a a o u a a e C o a C W N N r w E G W P K
Biotechnology Companies, n=15 c.) Research Projects
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Research Projects, n=94
As expected, the largest number of groups and projects in the animal health sector are from Gauteng. The region with the next highest capacity in terms of biotechnology companies active in animal health is the Western Cape, followed by Kwazulu Natal. The majority of companies in this sample are classified into more than one sector, with animal health being only a subsidiary interest. The Free State also makes a notable contribution to animal health research groups and projects.
National Biotech Survey 2003 91 Figure 28. Distribution of a.) research groups, b.) biotechnology companies, and c.) research projects in animal health by focus area a.) Research Groups
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b.) Biotechnology Companies
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r 4 G
f
o 3
r e b 2 m u N 1
0 g s n l g ct l y s cs n cs e r o cs a n i i h i u a i i i g t t t ct r n l d d u m u o ct st ve st u i u a r i e i o t e l u o e d n r e cci b e D a p e r d n T o a A o P H r a r N o g B D r V r P a P e i p h e D T R
Biotechnology Companies, n=15
National Biotech Survey 2003 92 c.) Research Projects
35
s 30 p u
o 25 r G
f 20 o
r 15 e b
m 10 u
N 5 0
Research Projects, n=94
Vaccines and diagnostics are the major focus areas in animal health for all 3 categories. This is followed by disease physiology for research groups, therapeutics for biotechnology companies, and, animal breeding for research projects. Animal nutrition is becoming an increasingly popular research subject, particularly the areas of probiotics and feed supplements. The majority of the research and development in diagnostics, vaccines and therapeutics in this sector in SA is being conducted on diseases affecting livestock and poultry, though a small fraction of groups are researching diseases of domestic animals.
3. Plant Biotechnology
3.1 The Application of Biotechnology to the Plant/Agricultural Sector Africa has an extremely high rate of population growth, resulting in an increasing demand for food. Biotechnology has the potential to address food shortages through the development of crops with increased resistance to diseases and drought, increased tolerance to herbicides, increased nutritional benefits, and improved processing qualities. Additional applications of biotechnology in the plant sector include the development of biological agents, soil agents and plant growth stimulants for the improvement of crop performance, clonal propagation methods for the large-scale propagation and conservation of plant species, the use of molecular techniques for plant species and plant pathogen identification, and bioprospecting for novel molecules that can be applied to the human health, animal health and industrial sectors. Biotechnology has the potential to impact on forestry, particularly the improvement of tree production and wood quality. Plants are also now being engineered to produce biochemicals on a large-scale for application in the human health, animal health and industrial sectors. If managed correctly, plants represent a renewable source of raw materials and products; therefore, conservation plays a vital role in plant biotechnology.
The predominant focus area of global plant biotechnology is genetically engineered (GM) crops. The value of the global market for genetically engineered crops was between US$2 billion and US$3 billion in 2000 (8). GM crops already on the market include papaya, soybeans, maize and cotton. GM foods remain a contentious issue in some circles, particularly in the European Union and Japan.
National Biotech Survey 2003 93 3.2 Pl ant Bi otechnology in South Africa Agriculture contributes approximately 5% to SA’s GDP and is the biggest employer of labour in the rural areas. Approximately 13% of South Africa's surface area can be cultivated, though only 22% of this is classified as high potential arable land. At present, just over 1,2 million hectares are under irrigation. The agricultural sector accounted for 7% of the total SA exports for 2000, with a foreign exchange value of R14.5 billion. SA exports maize, sugar, wine, citrus fruit, grapes, preserved fruits and nuts, as well as cut flowers and bulbs. South Africa is also well known for the high quality of its deciduous fruit, up to 32% of which is exported. In addition, SA exports 48% of its citrus fruit. The varied climatic zones in SA enable the production of almost any kind of crop, which means that the country is self-sufficient in most of the major crops, with the exception of wheat, oilseeds, rice, tea and coffee. Maize accounts for the largest use of arable land in SA, followed by wheat and, to a lesser extent, oats, sugar cane and sunflowers. Sugar cane and maize form the basis of the major commodities such as molasses and maize meal. Agriculture is also an important market for the manufacturing sector, particularly products such as fuel, fertilizers, farm feeds, packing materials, dips and sprays, and other farming commodities (15).
It is clear that agriculture plays a significant role in the South African economy. The sector does, however, face ongoing challenges that include desertification, soil erosion, soaring input costs, increased crime on farms, population growth, and, most importantly, the scarcity of water resources. Ongoing research and technology development is required to face these and other challenges. Biotechnology can play an important role in rural development, poverty alleviation, food security, and the conservation of plant diversity. The development of new agricultural and soil science methods has allowed the overproduction of agricultural produce and has resulted in SA being a net exporter of agricultural products, in spite of these challenges (15). The Agricultural Research Council, established in 1993 by the Department of Agriculture to promote agriculture and related sectors through research, development and transfer of technology, has played an important role in new developments in the industry to date.
Existing products in the plant biotechnology sector in SA include biological control products, plant growth stimulants and GM crops/seed. Conditional general release approval has been given to insect resistant cotton and maize, and herbicide resistant soya and cotton. The selection of GM crops is expected to increase in the future to include wheat, barley, sunflower seed, fruit, sugar, potatoes and wood (30). The EU is a significant export destination for SA’s agricultural products, particularly fruit. The strong resistance to GM foods in the EU will impact negatively on exports, particularly if a full moratorium on GM foods is implemented. It is therefore essential that farmers exporting products remain sensitive to the issue.
The findings of the present survey for research groups and companies active in plant biotechnology and the research projects relevant to plant biotechnology are broken down by region and focus area in Figures 29 and 30, respectively.
National Biotech Survey 2003 94 Figure 29. Distribution of a.) research groups, b.) biotechnology companies, and c.) research projects in plant biotechnology by region a.) Research Groups
70 s
p 60 u o
r 50 G
f 40 o
r 30 e
b 20 m
u 10 N 0 g n e n e u t r l r l e ce n e e h a e a e t r st p n e t t p r t zu e F a st st vi S a a o u a a e C o a N C W N r w E W G P K
Research Groups, n=189 b.) Biotechnology Companies 5 1
f s 0 o e
i 1 r n e a b p m m 5 u o N C 0 g n e n e u t r l r l ce e n e e h a e a e t r st n p e t p t r t zu e F a st st vi S a a o u a a e o C a C W N N r w E G W P K
Biotechnology Companies, n=30
c.) Research Projects
120 s ct
e 100 j o r 80 P
f
o 60
r
e 40 b m
u 20 N 0 g n e n e u t r l r l e ce n e e h a e a e t r st p n e t t p r t zu e F a st st vi S a a o u a a e C o a W C N N r w E W G P K
Research Projects, n=256
National Biotech Survey 2003 95 The trends for biotechnology companies and research projects are similar, with the concentration of plant biotechnology activities being highest in Gauteng, followed by the Western Cape and Kwazulu Natal. The research groups show a greater bias towards the Western Cape, probably due to the inclusion in the database of a fairly large number of project leaders from ARC-Infruitec-Nietvoorbij as well as the plant genetics and plant physiology groups from the HEI’s in the region.
Figure 30. Distribution of a.) research groups, b.) biotechnology companies, and c.) research projects in plant biotechnology by focus area a.) Research Groups
50 45 40 s
p 35 u o r 30 G
f
o 25
r e
b 20 m
u 15 N 10 5 0
Research Groups, n=189
b.) Biotechnology Companies
9 8
s 7 p u
o 6 r G
f 5 o
r 4 e b 3 m u
N 2 1 0
Biotechnology Companies, n=30
National Biotech Survey 2003 96 c.) Research Projects
50 45 40 s p
u 35 o r 30 G
f
o 25
r
e 20 b m
u 15 N 10 5 0
Research Projects, n=256
Biotechnology companies in SA are working predominantly in the fields of GM crops, plant propagation and traditional breeding, followed closely by plant growth stimulants and biological control. The research groups are classified predominantly into the GM crops, biological control, plant genetics, and traditional breeding focus areas. Similar focus areas dominate in the research project sample, with the plant genetics focus area being superceded by plant propagation. Traditional breeding of crops remains an important focus area particularly within divisions of the ARC. An increasing number of groups and projects involve the identification and development of novel bio- control methods. This is supported by a relatively strong business sector into which new products can be fed. The presence of a number of large seed and agricultural companies in SA also provides ample opportunities for the commercialization of novel GM crop varieties.
4. Food & Beverage
4.1 The Application of Biotechnology to the Food & Beverage Sector The use of biotechnology to alter the properties of agricultural products is discussed under plant biotechnology. Other applications of biotechnology in the food & beverage industry include improvement of yeast strains for wine and beer production, the production of novel food supplements and ingredients, the development of improved methods in food processing, the analysis and preservation of food, and the development of probiotics and nutraceuticals. These applications again reveal the importance of biotechnology in addressing global issues such as starvation and adequate nutrition.
4.2 Fo od & Beverage Bi otechnology in South Africa The South African food and beverage industry employs 13,5% of the total labour force and has an annual turnover in excess of US$7.2 billion. Malt drinks and wine constitute 31% of total beverage production, and soft drinks constitute 21%. Wine is one of the most important export products, and is exported primarily to Japan, UK, Belgium, and other Asian, European and African markets (24). SA is also an important producer of beer, dominated by the SA Breweries/Millers Group. Neither the wine nor the beer industries are dealt with in this survey, except where biotechnological methods are used to improve wine quality or beer brewing.
National Biotech Survey 2003 97 The distribution of research groups and companies active in the food & beverage sector and the research projects relevant to the sector are broken down by region and focus area in Figures 31 and 32, respectively.
Figure 31. Distribution of a.) research groups, b.) biotechnology companies, and c.) research projects in the food & beverage sector by region a.) Research Groups
35 s
p 30 u o
r 25 G
f 20 o
r 15 e
b 10 m
u 5 N 0 g n e n e u t r l r l e ce n e e h a e a e t r st p n e t t p r t zu e F a st st vi S a a o u a a e C o a W N C N r w E G W P K
Research Groups, n=86 b.) Biotechnology Companies 5 1
f s o e 0 i
r 1 n e a b p m m u o 5 N C 0 g n e n e u t r l r l ce e n e e h a e a e t r st n p e t t p r t zu e F a st st vi S a a o u a a e o C a N W C N r w E W G P K
Biotechnology Companies, n=22
National Biotech Survey 2003 98 c.) Research Projects
35 s
ct 30 e j o
r 25 P
f 20 o
r 15 e
b 10 m
u 5 N 0 g n e n e u t r l r l e ce n e e h a e a e t r st p n e t t p r t zu e F a st st vi S a a o u a a e C o a N C W N r w E W G P K
Research Projects, n=74
The trends are similar for all 3 categories, except that capacity in industry is less in the Free State. The highest concentration of activity in food & beverage biotechnology is in the Western Cape, followed by Gauteng, the Free State and, to a lesser extent, Kwazulu Natal.
Figure 32. Distribution of a.) research groups, b.) biotechnology companies, and c.) research projects in the food & beverage sector by focus area a.) Research Groups
25
20 s p u o r 15 G
f o
r e
b 10 m u N 5
0
Research Groups, n=86
National Biotech Survey 2003 99 b.) Biotechnology Companies
7 6 s p
u 5 o r G
4 f o
r
e 3 b m
u 2 N 1 0
Biotechnology Companies, n=22
c.) Research Projects
14
12 s p
u 10 o r G
8 f o
r
e 6 b m
u 4 N 2
0
Research Projects, n=74
It is clear from the figures that food ingredients make up the largest focus area in food & beverage biotechnology. Other prominent focus areas for research groups and projects are food analysis and probiotics, and for biotechnology companies are nutraceuticals and food processing. The focus area encompassing food ingredients includes additives such as enzymes of biological origin, flavours, fragrances, and other biological metabolites such as vitamins etc. The sample includes only those larger food and beverage companies that are involved in biotechnology R&D. These companies are classified according to their biotechnology R&D focus rather than their core business areas.
National Biotech Survey 2003 100 5. Industrial Biotechnology
5.1 The Application of Biotechnology to the Industrial Sector
Despite the emergence of the global knowledge economy, manufacturing and process industries remain essential both to the generation of consumer and industrial products and to global economies. There is, however, a growing need for improvement of the processes involved and the reduction of their environmental impact. Biotechnology is applied to industrial processes to improve efficiency and, in some cases, to allow the development of new processes and products. Biotechnology is used in mining (bioleaching), the production of high value products from natural sources and by-products, and the synthesis of fine chemicals, biochemicals, food additives, pharmaceuticals, nutraceuticals, biomass, enzymes, diagnostics, food, feeds etc. An important aspect of industrial biotechnology is the development of novel biocatalysts for use in industrial processes. Biotechnology can also be used to alter industrial processes to reduce resource consumption and negative environmental impact. An additional focus area is the development of biodegradable materials.
5.2 Industrial Biotechnology in South Africa The chemicals industry in SA employs approximately 175 000 people and contributes around 5% to GDP. The country is strong in petrochemicals, plastics, rubber, and agricultural and mining chemicals, and has a number of companies involved in speciality and performance chemicals. South Africa is one of the richest countries in terms of minerals, with the world's biggest reserves of gold, manganese, platinum metals, chromium, vanadium, alumino silicates, iron ore, coal, diamonds, uranium, titanium and nickel. Mining and the mineral processing industries account for around 10% of GDP in SA. The mining sector, excluding gold, constitutes 17.5% of total exports and accounts for 3.3% of total employment. Gold accounts for 16% of exports and contributes around 3% of GDP. It also provides 5% of total employment. Coal is also an important resource in SA, and is the predominant energy source, providing about 75% of primary energy needs. Approximately 40% of coal produced in the country is exported (24).
It is clear that the chemical and mineral industries play a significant role in the South African economy. In fact, South Africa depends more on mineral resources than any other major trading nation. Thus biotechnology methods that result in more economical and environmentally-friendly processes are likely to make a significant impact on the industry as well as the SA economy as a whole. A number of SA research groups and companies are active in the industrial biotechnology. These groups and the relevant research projects are mapped by region and focus area in Figures 33 and 34, respectively.
National Biotech Survey 2003 101 Figure 33. Distribution of a.) research groups, b.) biotechnology companies, and c.) research projects in the industrial biotechnology sector by region a.) Research Groups
50 s p
u 40 o r G
30 f o
r
e 20 b
m 10 u N 0 g n e n e u t r l r l e ce n e e h a e a e t r st p n e t t p r t zu e F a st st vi S a a o u a a e C o a N C W N r w E W G P K
Research Groups, n=95 b.) Biotechnology Companies 5 1
f s o e 0 i
r 1 n e a b p m m u o 5 N C 0 g n e n e u t r l r l ce e n e e h a e a e t r st n p e t p t r t zu e F a st st vi S a a o u a a e o C a C W N N r w E G W P K
Biotechnology Companies, n=25
c.) Research Projects
50 s ct e
j 40 o r P
30 f o
r 20 e b
m 10 u N 0 g n e n e u t r l r l e ce n e e h a e a e t r st p n e t t p r t zu e F a st st vi S a a o u a a e C o a N C W N r w E G W P K
Research Projects, n=111
National Biotech Survey 2003 102 Biotechnology companies active in the industrial sector are located predominantly in Gauteng, followed by Kwazulu Natal and the Western Cape. Research groups and research projects, however, are concentrated in the Western Cape, with less activity evident in the Free State and Gauteng regions.
Figure 34. Distribution of a.) research groups, b.) biotechnology companies, and c.) research projects in the industrial biotechnology sector by focus area
a.) Research Groups
35
30 s
p 25 u o r
G 20
f o
r
e 15 b m
u 10 N
5
0
Research Groups, n=95 b.) Biotechnology Companies
9 8 s
p 7 u o
r 6 G
f 5 o
r 4 e b 3 m u 2 N 1 0
Biotechnology Companies, n=25
National Biotech Survey 2003 103 c.) Research Projects
25
s 20 p u o r 15 G
f o
r
e 10 b m u
N 5
0
Research Projects, n=111
Enzymes, bioproduction and bioprocessing are the dominant focus areas for SA biotechnology groups and projects, followed closely by process development. The terms bioproduction and bioprocessing are fairly broad and describe most processes that use microorganisms for the conversion of substrates. The production of enzymes through extraction and recombinant means represents an important focus area that feeds into other sectors. Enzymes are used in food processing, the production of pharmaceuticals, research laboratories and other industrial processes. Although the focus area of biocatalysts does not feature significantly in any of the samples analyzed here, it represents an important enabling technology for a very large number of industrial processes. A growing trend is the engineering of enzymes derived from nature, using modern methods, to alter their efficiency, substrate specificity, and physical properties. The applications of biotechnology in industry are vast, and it is likely that there are a larger number of non-core biotechnology companies utilizing biotechnology to some extent in their processes than is reflected in this study. The use of microorganisms in mining for the recovery of metals has been pioneered by groups in SA. Although the use of the technology in SA is limited, it is being applied by mining companies in various foreign locations.
6. Environmental Biotechnology
6.1 The Application of Biotechnology to the Environmental Sector Increasing levels of pollution in the environment have prompted moves to reduce the amount of toxic waste produced by industrial processes and to develop new methods of waste treatment. In addition, new methods are being sought to clean up toxic spills and to rehabilitate contaminated sites. Biotechnology provides the tools to address many of these issues. Applications of biotechnology in the environmental sector include the use of microorganisms to treat industrial wastes and water resources, to convert waste products into higher value products, to clean up hazardous waste more efficiently, and to effectively rehabilitate contaminated sites. Environmental management forms an essential component of all industrial companies, and the adoption of more environmentally-friendly technologies both in processing and in the treatment of waste products has resulted in an increasing demand for environmental biotechnology methods, and a growth in their market value. As an illustration, the bioremediation market in the USA alone is predicted to be worth US$300 million by 2005 (9).
National Biotech Survey 2003 104 6.2 Environmental biotechnology in South Africa A number of companies are applying biotechnology to waste and water treatment in SA. The larger industries in the country, such as the energy, mining, and industrial manufacturing companies are increasingly under pressure to reduce the impact of their activities on the environment. Many of the non-core biotechnology companies in the database are utilizing biotechnology for waste treatment and/or beneficiation, while a number of companies are selling products for waste treatment. The distribution of research groups and companies active in the environmental sector and the research projects relevant to the sector are broken down by region and focus area in Figures 35 and 36, respectively.
Figure 35. Distribution of a.) research groups, b.) biotechnology companies, and c.) research projects in the environmental sector by region a.) Research Groups
16 s
p 14 u
o 12 r
G 10
f o
8 r
e 6 b
m 4 u 2 N 0 g n e n e u t r l r l e ce n e e h a e a e t r st p n e t p t r t zu e F a st st vi S a a o u a a e C o a W C N N r w E W G P K
Research Groups, n=56
b.) Biotechnology Companies 0 1
f s o e i
r n e a b p 5 m m u o N C 0 g n e n e u t r l r l e ce n e e h a e a e t r st p n e t t p r t zu e F a st st vi S a a o u a a e C o a N W C N r w E G W P K
Biotechnology Companies, n=15
National Biotech Survey 2003 105 c.) Research Projects
20 s ct e j
o 15 r P
f
o 10
r e b 5 m u N 0 g n e n e u t r l r l e ce n e e h a e a e t r st p n e t t p r t zu e F a st st vi S a a o u a a e C o a N C W N r w E W G P K
Research Projects, n=70
Biotechnology companies and projects that involve the environmental applications of biotechnology are concentrated in Gauteng, followed by the Western Cape and Kwazulu Natal. In contrast, research groups in the environmental sector are located predominantly in the Western Cape.
Figure 36. Distribution of a.) research groups, b.) biotechnology companies, and c.) research projects in the environmental sector by focus area a.) Research Groups
30
25 s p
u 20 o r G
f
o 15
r e b
m 10 u N 5
0
n n g t n n o o n n cs o i i i i i o t t r t e e i r t a a st o a e i t t st m t i i o d l t d i a ca a n n i a a e f b r i o g e W W r a g r m a i m u h e e T r o e P D d i o o i R B i B B
Research Groups, n=56
National Biotech Survey 2003 106 b.) Biotechnology Companies
16 14 s p
u 12 o r 10 G
f
o 8
r
e 6 b m
u 4
N 2 0
n g t n n o n n cs o i i i i o t r t e e i r t a st o a e i t st m t i o d t d a ca a n n i a a e f r i o g e W W r g r m a i m u e e T r o P D d i o o i B i B B
Biotechnology Companies, n=15
c.) Research Projects
35 30 s p
u 25 o r G
20 f o
r
e 15 b
m 10 u N 5 0
n n g t n n o o n n cs o i i i i i o t t r t e e i r t a a st o a e i t t st m t i i o d l t d i a ca a n n i a a e f b r i o g e W W r a g r m a i m u h e e T r o e D P d i o o i R B i B B
Research Projects, n=70
The majority of research groups, companies and research projects are active in the field of waste treatment, bioremediation and water purification. The biotechnologies applied to environmental problems tend to be relatively “low-tech” and use predominantly 1st-generation methods. Companies active in the environmental sector in SA include those developing and selling microorganism-based products for cleaning and biodegradation of spills. Other dominant technologies emerging from the sector are those that utilize microorganisms or components thereof for large-scale water treatment.
National Biotech Survey 2003 107 7. Other Biotechnology Focus Areas
7.1 Other Applications of Biotechnology Other focus areas in biotechnology not covered under the above headings include aquaculture and mariculture, platform technologies, biological control for non-agricultural purposes, general research and bioprospecting that are not specific to one sector, and plant-based cosmetic products. Aquaculture and mariculture are rapidly growing industries, particularly in developing countries, and refer to the culturing of aquatic and marine organisms under controlled conditions. Over the last 50 years aquaculture has developed into a world-wide industry with a total production of 36 million tons and a net value of US$52 billion in 1998 ( www.a quaafrica.co.za ). Biotechnology is applied in aquaculture and mariculture to the genetic engineering of fish and other aquatic species to enhance growth, stress resistance, disease resistance and sterility, the creation of fish that act as biosensors, the development of organic biological products to prevent disease and improve yields, and the use of genetically modified fish such as tilapia for the production of pharmaceuticals.
Platform technologies refer to technologies that are used in research and/or industry applications. Examples of platform technologies include microarray facilities, plant propagation methods etc. A number of groups are involved in the development and application of such technology platforms, while others offer commercial services in the relevant technologies. Also included in the “other” category are plant-based cosmetic products. These include topical lotions and other cosmetics that are derived from plants such as aloes.
7.2 Othe r Applications of Bi otechnology i n South Africa Relatively few research groups, companies and research projects fall under the “other” category, and the majority of these are also classified under one of the other 7 sectors. The distribution of these groups by region and focus area is represented in Figures 37 and 38, respectively.
Figure 37. Distribution of a.) research groups, b.) biotechnology companies, and c.) research projects in other sectors by region a.) Research Groups
30 s p
u 25 o r 20 G
f o
15 r e
b 10 m
u 5 N 0 g n e n e u t r l r l ce e n e e h a e a e t r st n p e t t p r t zu e F a st st vi S a a o u a a e o C a N C W N r w E W G P K
Research Groups, n=78
National Biotech Survey 2003 108 b.) Biotechnology Companies 5 1
f s o e 0 i
r 1 n e a b p m m u o 5 N C 0 g n e n e u t r l r l e ce n e e h a e a e t r st p n e t p t r t zu e F a st st vi S a a o u a a e C o a C W N N r w E G W P K
Biotechnology Companies, n=16 c.) Research Projects
16 s
ct 14 e j
o 12 r
P 10
f
o 8
r
e 6 b 4 m
u 2 N 0 g n e n e u t r l r l e ce n e e h a e a e t r st p n e t t p r t zu e F a st st vi S a a o u a a e C o a N C W N r w E W G P K
Research Projects, n=46
The majority of research groups, companies and research projects are operating in the Western Cape, followed by Gauteng. There are clearly also a number of research projects being conducted in the Eastern Cape within these sectors. These fall predominantly under the mariculture/aquaculture focus area and can be attributed to groups from Rhodes University and the HEI’s in Port Elizabeth.
National Biotech Survey 2003 109 Figure 38. Distribution of a.) research groups, b.) biotechnology companies, and c.) research projects in other sectors by focus area a.) Research Groups
40
s 35 p
u 30 o r
G 25
f o
20 r
e 15 b
m 10 u
N 5 0
c n i s e g y t o r f i e n g ch l e i u o r t o ct l l ct a cu e o l sm e cs l e cu n i l o se o s a o sp e st C i u ch C
ct o r
R M r q e d u
e e l l p T r A d
a / ct o se u o r i ca t e r a i l a m e r r B r g P u b n u a - o t o t l f e C l h t n o G a i C cu l a i l B r P P a M
Research Groups, n=78 b.) Biotechnology Companies
9
s 8 p
u 7 o r 6 G
f 5 o
r 4 e
b 3
m 2 u
N 1 0 c i e y t r g e u t o l l o sm cu n o s a C u ch
ct q e d u T A d
/ se o e r a m r r P b u - o t t l f t n a cu l a i l r P P a M
Biotechnology Companies, n=16
National Biotech Survey 2003 110 c.) Research Projects
20 18 s
p 16 u o
r 14 G
12 f
o 10
r
e 8 b 6 m
u 4 N 2
0 l
c i e o g y t r r n t g ch e i u r t n o l l ct a o o sm e cu C n o se
s l a sp e C u ch
ct o R ca r q e d i u
l p T A g d
a / o se o o r i l e r a m e r B o r i P b n u - o t t l B f e t n G a cu l a i l r P P a M
Research Projects, n=46
The dominant focus areas in the “other” category are platform technologies for research groups, plant-based cosmetic products for companies, and aquaculture and mariculture for research projects. According to the Aquaculture Association of Southern Africa (AASA) website ( http://www.sun.a c.za/aasa / ), South African aquaculture production has shown a significant increase over the past decade. Total production and value has increased from 3 000 tons (R51 million) in 1997 to 4 030 tons (R146 million) in 2000 (11). The abalone industry alone includes 14 producing farms and an investment totaling R130 million to date, with a planned investment of R27 million for 2003/2004 (Nick Loubser, Abalone Farmers Association of South Africa - Personal Communication). Although biotechnology can be applied to the mariculture and aquaculture industries, not all of the companies within these industries are utilizing biotechnology tools. The sample, therefore, only includes those mariculture/aquaculture companies that have indicated some involvement in biotechnology activities. The same is true of natural products companies.
8. Support Services for Biotechnology
A small proportion of groups in the research and company database are offering services in biotechnology. These generally include routine diagnostics, product testing, and core technology services such as DNA sequencing, plant propagation etc. The distributions of research groups, companies and research projects applicable to this sector by region and focus area are represented in Figures 39 and 40, respectively.
National Biotech Survey 2003 111 Figure 39. Distribution of a.) research groups, b.) biotechnology companies, and c.) research projects in support services by region a.) Research Groups
30 s p
u 25 o r 20 G
f o
15 r e
b 10 m
u 5 N 0 g n e n e u t r l r l e ce n e e h a e a e t r st p n e t t p r t zu e F a st st vi S a a o u a a e C o a W N C N r w E G W P K
Research Groups, n=81 b.) Biotechnology Companies 0 1
f s o e i
r n e a b p 5 m m u o N C 0 g n e n e u t r l r l ce e n e e h a e a e t r st n p e t p t r t zu e F a st st vi S a a o u a a e o C a C W N N r w E G W P K
Biotechnology Companies, n=20 c.) Research Projects
35 s
ct 30 e j o
r 25 P
f 20 o
r 15 e
b 10 m
u 5 N 0 g n e n e u t r l r l ce e n e e h a e a e t r st n p e t p t r t zu e F a st st vi S a a o u a a e o C a W N C N r w E G W P K
Research Projects, n=54
National Biotech Survey 2003 112 The distribution of companies and research projects by region shows the same trends, with the highest concentration being in the Western Cape, followed by Gauteng and Kwazulu Natal. The distribution of research groups is similar; however, the North West Province shows a greater representation than Kwazulu Natal.
Figure 40. Distribution of a.) research groups, b.) biotechnology companies, and c.) research projects in support services by focus area a.) Research Groups
30 s
p 25 u o r 20 G
f
o 15
r e
b 10 m
u 5 N
0
l l
g y y y g s cs s o t r n l i g s ct r i n t ca ch e t i o t a i o e a l r f t i l a i ce e n r l r st a t a r yt o l o vi p r e m su sa e n o n r t r a p o C n se o T o e a o i C n
u b f o e ch y C S B a M A t n S ct e i
C R i l L u T o w a i d a u B o / r R Q T P I
Research Groups, n=81
b.) Biotechnology Companies
5 s
p 4 u o r
G 3
f o
r
e 2 b m u
N 1
0
l
g y n y e g s cs s r r n l s i g o ct i n t i ca ch i o u t a e i o ct a l r t i i l a ce e l r ct r a st ct a t a r yt o p l r vi u r e m su e a t n o r n t r f p a d o n se n T o e a o C u u n
o b f o e o ch r S C n a M S A n ct e
C R i C P a L
u T o t w i d M o a B l o i / r R T P P I
Biotechnology Companies, n=20
National Biotech Survey 2003 113 c.) Research Projects
16 14 s
p 12 u o r 10 G
f o
8 r e
b 6 m
u 4 N 2 0
Research Projects, n=54
The majority of research groups in the support services sector are involved in product testing and core technology services, while research projects focus on consulting and product testing, and companies focus on contract manufacture, pilot production, and laboratory supplies.
National Biotech Survey 2003 114 SECTION F: BIOTECHNOLOGY ACTIVITIES IN SOUTH AFRICA BY REGION
Most regions in SA boast some degree of biotechnology activity. The major centres are Gauteng (Johannesburg and Pretoria), the Western Cape (Cape Town and the Garden Route), Kwazulu Natal (Durban and Pietermaritzburg), and the Eastern Cape (Grahamstown and Port Elizabeth). There is also some biotechnology activity in the Free State, centred on the University of the Free State. The regional strengths in biotechnology are outlined below. Please note that the report is intended to provide a generic overview of biotechnology activities in SA, therefore detailed regional analyses of activities are not included.
1. Gauteng
Gauteng and its surrounds, including the North West Province, Mpumalanga, and Limpopo Province are home to 23 of the 47 core biotechnology companies and 28 of the 59 non-core biotechnology companies identified in the survey. The area also houses 270 of the research stakeholders and 407 of the research projects identified as belonging to the “biotech,” “potentially biotech,” and “biotech services” categories. The distribution of these groups by sector is shown in Figure 41. The human health and plant sectors clearly dominate, followed by the animal health sector.
Figure 41: Distribution of research groups, biotechnology companies and research projects in Gauteng by sector
140
120
s 100 p Research Groups u o r
G 80 Biotechnology Companies
f o
r Research Projects
e 60 b m u
N 40
20
0 l l t h h r t t a t e s a n l l r t e i & g r a a a o n
h l ce a t e e p e d st r P vi p O o H u H r m
u o ve l d e n n e a n S F o a S I r B m i m vi n u n A H E
The broader Gauteng region is home to a number of major research institutions and organizations with the potential to supply innovative biotechnology ideas and projects for commercialization (Table 3). It must be noted, however, that not all of these institutions are currently involved in biotechnology activities.
National Biotech Survey 2003 115 Table 3: Major Research Institutions and Organizations in Gauteng and Surrounding Regions Universities Institutes* Technikons Research Organizations
University of the Witwatersrand National Institute of Virology Technikon Pretoria Mintek University of Pretoria Wits Health Consortium Technikon Witwatersrand CSIR Rand Afrikaans University FABI North West Technikon ARC Head quarters Potchefstroom University for CHE ACGT Northern Gauteng ARC-Onderstepoort Veterinary Technikon Institute University of South Africa (UNISA) Technikon SA ARC-Animal Improvement Institute Medical University of South Africa Vaal Triangle Technikon ARC-Animal Nutrition and Animal (Medunsa) Products Institute Vista University ARC-Institute for Tropical and Subtropical Crops University of the North ARC-Range and Forage Institute University of Venda ARC-Vegetable and Ornamental Plant Institute ARC-Grain Crops Institute ARC-Plant Protection Research Institute ARC-Institute for Industrial Crops South African Bureau of Standards * Institutes that fall within Universities or Technikons
The Gauteng region is home to the headquarters of the Council for Scientific and Industrial Research (CSIR), the Agricultural Research Council (ARC), and Mintek, as well as the GODISA-funded incubator, eGoli BIO Life Sciences Incubator, and the BioPAD BRIC.
The CSIR, which is structured around eight distinct business areas, is the largest R&D and implementation technology agency in Africa. CSIR Bio/Chemtek is a business unit positioned to provide technology solutions in the food, chemical and biological technology domains. It houses one of the largest biotechnology research facilities in SA, and is divided into the following programmes: - Biotechnology Programme - Technology for Development Programme - Speciality and Fine Chemicals Programme - Bioprospecting - Food Science and Technology Programme - Analytical Science and Technology Programme The Biotechnology Programme is further divided into 6 focus areas, with an additional unit, the African Centre for Genome Technologies (ACGT), that provides technology services to the whole division. CSIR Bio/Chemtek is the only organization in SA to offer the full development pipeline from fundamental research to product and process development and commercialization, i.e. creation, development, packaging and exploitation of IP. In addition, the division has access to Technovent, a business incubation company set up by the CSIR to incubate business opportunities, and Technifin, which deals with the licensing of technology and IP. The Bio/Chemtek division has the
National Biotech Survey 2003 116 largest IP portfolio of all the divisions, and is involved in more than 50 different projects. Research and development projects are conducted in-house or in partnership with other research organizations and companies. In addition, the CSIR offers services in process and product development, toll manufacture for market and product development, and a number of other analytical and technology services. The Bio/Chemtek division recently concluded an agreement with Bioventures to form a new company, Mbuyu Biotech (Pty) Limited, that will initially commercialize 3 technological processes developed by the CSIR, with a view to extending the portfolio to encompass further technologies in the future.
The mission of the Agricultural Research Council is to promote the agricultural and related sectors through research, technology development and transfer. This is achieved through a number of different divisions focused on both the plant and animal segments of agriculture. The ARC interfaces with national, provincial and local government as well as various universities, technikons, agricultural unions and farmers' associations in SA. Through its divisions, the ARC has built substantial capacity in research and technologies related to animal health and production, plant health, cultivar and variety development, plant growth, organic production systems etc. The ARC is headquartered in Gauteng but has a presence throughout SA through its different divisions and experimental stations. The ARC has played an important role in biotechnology to date and represents an important source of new innovations in the future. It also provides support services in all stages of the product development and commercialization pipeline.
2. Western Cape
The Western Cape, which includes the Garden Route, is home to 20 of the 47 core biotechnology companies and 22 of the 59 non-core biotechnology companies identified in the survey. The area also houses 308 of the research stakeholders and 346 of the research projects identified as belonging to the “biotech,” “potentially biotech,” and “biotech services” categories. The distribution of these groups by sector is shown in Figure 42. The human health sector is by far the dominant sector in terms of number of groups and projects for all 3 categories plotted. This is followed by the plant and industrial sectors. The food & beverage, “other,” and support services sectors also feature significantly in the biotechnology company sample.
National Biotech Survey 2003 117 Figure 42: Distribution of research groups, biotechnology companies and research projects in the Western Cape by sector
160 140
s 120 p
u Research Groups o
r 100 G
f Biotechnology Companies o
80 r
e Research Projects b 60 m u
N 40 20
0 l l t h h r t t a t e s a n l l r t e i & g r a a a o n
h l ce a t e e p e d st r P vi p O o H u H r m
u o ve l d e n n e a n F S o a I S r B m i m vi n u n A H E
The Western Cape hosts a strong fundamental and applied research community from 5 tertiary research institutions and 6 parastatals that contribute to the local biotechnology industry (Table 4).
Table 4: Major Research Institutions and Organizations in the Western Cape Universities Institutes* Technikons Research Organizations
University of Cape Town Institute for Infectious Cape Technikon Medical Research Council Diseases and Molecular Medicine University of the Western Cape SANBI Peninsula Technikon ARC Infruitec-Nietvoorbij University of Stellenbosch Institute for Wine PE Technikon (George CSIR Biotechnology Campus) Institute for Plant National Botanical Institute Biotechnology South African Bureau of Standards iThemba Laboratories * Institutes that fall within Universities or Technikons
The Western Cape is home to the headquarters of the Medical Research Council and the National Botanical Institute, as well as the GODISA-funded incubator, Acorn Technologies, the Cape Biotech BRIC, and the administrative node of the National Bioinformatics Network. The ARC-Infruitec-Nietvoorbij division provides research and technology solutions to the local wine and fruit industries. The CSIR has a small division in Cape Town concerned primarily with food technology. The National Botanical Institute is playing an increasingly important role in biotechnology with the increased interest of stakeholders in harnessing value from biodiversity. iThemba Laboratories provides expertise in radionuclides and radiation technologies, and is turning its focus toward radio- therapies. The Western Cape is also home to a world-renowned wine industry.
National Biotech Survey 2003 118 The South Cape or George-Garden Route corridor has significant capability in medical biotechnology, and the development and production of plant-based products. Stakeholders in the region have established an industry- driven forum, “Eden Biotechnology,” to promote and fund biotechnology-related industry development in the region.
The Medical Research Council, headquartered in the Western Cape, plays a significant role in medical research in SA. The MRC’s research is structured into six National Programmes, each with its own focus areas, to form a total of 48 research units, groups, centres and lead programmes throughout SA. The majority of these units are conducting research into medical problems in SA, and have the potential to feed into future biotechnology endeavours. Five units, in particular, are directly involved in the development of products or services, i.e. Medical Imaging Research Unit, South African AIDS Vaccine Initiative, SA Traditional Medicines Unit, Bone Research Unit, and Human Genetics Research Unit.
3. K wazulu Natal
Seven of the 47 core biotechnology companies and 12 of the 59 non-core biotechnology companies identified in the survey are located or have branches in Kwazulu Natal. The area is also home to 110 of the research stakeholders and 132 of the research projects identified as belonging to the “biotech,” “potentially biotech,” and “biotech services” categories. The distribution of these groups by sector is shown in Figure 43. The human health and plant sectors dominate in the research groups and projects, while the plant and industrial sectors dominate in the biotechnology companies.
Figure 43: Distribution of research groups, biotechnology companies and research projects in Kwazulu Natal sector
60
50 s p u
o 40
r Research Groups G
f Biotechnology Companies o
30 r Research Projects e b
m 20 u N 10
0 l t r h a n t e i l r a h l a t st e P O u H
d n n I a m u H
National Biotech Survey 2003 119 Kwazulu Natal houses 3 Universities and the newly integrated Durban Institute of Technology (Table 5). The region boasts a GODISA-funded Innovation Support Centre, i.e. The Voxel Support Centre, and the ECoBio and PlantBio BRICs. The timber research centres of 4 major paper/timber companies are situated in Pietermaritzburg, and Durban is an important centre for sugar cane research.
Table 5: Major Research Institutions and Organizations in Kwazulu Natal Universities Institutes within Universities or Technikons Research Organizations Technikons
University of Natal African Centre for Crop Durban Institute of Technology South African Sugar Association Improvement Experiment Station University of Durban-Westville Sugar Milling Research Institute Medical Research Council University of Zululand Institute for Commercial Forestry CSIR Research
* Institutes that fall within Universities or Technikons
4. Eastern Cape
The Eastern Cape makes a relatively small contribution to the total national biotechnology activities, with only 3 of the 47 core biotechnology companies and 4 of the 59 non-core biotechnology companies identified in the survey being located or having branches in the region. The area is also home to 39 of the research stakeholders and 58 of the research projects identified as belonging to the “biotech,” “potentially biotech,” and “biotech services” categories. The distribution of these groups by sector is shown in Figure 44. The dominant sector for research groups and projects is human health, followed by the “other,” industrial, and environmental sectors. The sample size for the companies is too small to provide accurate trends.
Figure 44: Distribution of research groups, biotechnology companies and research projects in the Eastern Cape by sector
20 18 16
s 14 p Research Groups u o
r 12
G Biotechnology Companies
f
o 10
r Research Projects e
b 8 m u
N 6 4 2
0 l l t h h r t t a t e s a n l l r t e i & g r a a a o n
h l ce a t e e p e d st r P vi p O o H u H r m
u o ve l d e n n e a n F S o a I S r B m i m vi n u n A H E
National Biotech Survey 2003 120 The Port Elizabeth area is best known for its manufacturing industries, particularly cars and chemicals. The city also houses 2 major tertiary education institutions, and the GODISA-funded SAC/CHEMIN Incubator. Rhodes University in Grahamstown has made a significant contribution to biotechnology activities in SA to date and boasts a number of experts in the field.
Table 6: Major Research Institutions and Organizations in the Eastern Cape Universities Institutes within Universities or Technikons Research Organizations Technikons
University of Port Elizabeth PE Technikon (Main Campus) CSIR Rhodes University Eastern Cape Technikon University of Fort Hare Border Technikon University of the Transkei
* Institutes that fall within Universities or Technikons
5. Free State
The Free State makes a small contribution to national biotechnology activities, with only 3 non-core biotechnology companies located or having branches in the region. The area is also home to 57 of the research stakeholders and 70 of the research projects identified as belonging to the “biotech,” “potentially biotech,” and “biotech services” categories. The distribution of these groups by sector is shown in Figure 45. The 3 non-core biotechnology companies participate in biotechnology activities that fall under the industrial and environmental sectors. The research groups and projects are relatively evenly spread over 7 of the 8 sectors, with an emphasis on industrial biotechnology in the research projects and plant biotechnology in the research groups.
Figure 45: Distribution of research groups, biotechnology companies and research projects in Free State by sector
25
20 s
p Research Groups u o
r 15
G Biotechnology Companies
f o
r Research Projects e
b 10 m u N 5
0 l l t h h r t t a t e s a n l l r t e i & g r a a a o n
h l ce a t e e p e d st r P vi p O o H u H r m
u o ve l d e n n e a n F S o a I S r B m i m vi n u n A H E
National Biotech Survey 2003 121 The majority of biotechnology activity in the Free State is centred on Bloemfontein, in particular, the University of the Free State and, to a lesser extent, Free State Technikon.
Table 7: Major Research Institutions and Organizations in the Free State Universities Institutes within Universities or Technikons Research Organizations Technikons
University of the Free State SAPPI Biotechnology Research Free State Technikon Centre
* Institutes that fall within Universities or Technikons
National Biotech Survey 2003 122 SECTION G: CONCLUSIONS
In presenting the state of the biotechnology industry in South Africa, it is important that we highlight the problems and challenges that SA is facing with respect to the development of a successful industry, in order to inform future developments and strategies. The report has, at the same time, attempted to emphasize the strengths of the industry and the potential that exists, in order to encourage stakeholders to continue with their efforts and to attract new expertise and investment to the industry. The development of biotechnology in SA will require a sustained positive attitude, critical evaluation and adjustments and the passion to succeed. Thus, it is hoped that the results presented here will provide some insight as to what needs to be done for the industry as well as igniting a sense of excitement about the vast possibilities and opportunities available.
The results of the survey represent minimum figures for the described indicators. The challenges in defining and obtaining information on the industry have limited the extent of the data, and the results are reported within the constraints, with few assumptions being made. The survey has the potential, however, to serve as a quantitative baseline for measuring the growth of the industry over the coming years, particularly in response to new government interventions in the industry.
It is clear from the survey that South Africa has enormous potential with respect to biotechnology. The biotechnology industry in South Africa is small by international standards but has a substantial pipeline of potential new products and processes in the research and development stage. Biotechnology activities span the full pipeline from fundamental research to product development and commercialization, and include services that make use of biotechnologies as well as support services for biotechnology stakeholders. Activities are supported by sophisticated laboratories, and a small, but globally leading pool of biotechnologists and bioinformaticists. Although support for innovation commercialization has been insufficient to date, it is becoming increasingly available through technology transfer offices associated with tertiary institutions, private consulting companies, GODISA-funded incubators focused on biotechnology and, more recently, the BRICs.
In the foreword to the Ernst and Young Beyond Borders 2002 report, the South African Director of Genetic Resources is singled out as an important role player in global biotechnology. Yet South Africa does not feature as a biotechnology market in the same report nor does it feature in the 2003 report (6; 7). This is the time and opportunity for South Africa to find its rightful place on the global biotechnology map. The challenge is take advantage of the opportunities for the sustainable development of niche markets in which South African stakeholders can compete on a global scale, while at the same time identifying new niche areas for capacity development. This can be facilitated by the creation of an enabling environment that allows stakeholders to maximize the benefit derived from the potential of biotechnology, whilst minimising the possible risks to the environment and human health. This enabling environment has to be developed in the context of South Africa’s particular circumstances and challenges, and must address the key financial, human resources and infrastructural deficits currently limiting the industry.
National Biotech Survey 2003 123 REFERENCES
1.) Biotechnology Industry Organization. Guide to Biotechnology – Agricultural Production, 2002 ( http://www.bi o.org )
2.) Biotechnology Industry Organization. What Is Biotechnology? ( http://www.bi o.org )
3.) Chitsike, LT. Existing Treaties, Trade Agreements And Protocols Relevant To Biotechnology And Biosafety And Their Implications To Member Countries.
4.) DACST. White Paper on Science and Technology, 1996
5.) Du Preez, C, Morris, J, Walwyn, D, and Webster, J. Draft Emerging Biotechnology Roadmap, July 2003
6.) Ernst and Young. Beyond Borders, The Global Biotechnology Report, June 2002
7.) Ernst and Young. Beyond Borders, The Global Biotechnology Report 2003
8.) Ernst and Young. Eight Annual Life Science Report, 2001
9.) Ernst & Young. The Economic Contributions of the Biotechnology Industry in the US Economy. 2000
10.) Finnfacts. One -in-ten European biotechnology companies Finnish, 31 December 2002 ( http://www.fi nnfacts.fi/english/main/actualities/bio_viikki.htm )
11.) Hoffman, LC, Swart, JJ, and Brink, D. The 1998 production and status of aquaculture in South Africa ( http://www.wr c.org.za )
12.) Li, Jianming and Halal, William E. Reinventing the Biotech Manager. Nature Biotechnology Supplement, Vol 20, July 2002
13.) Llobell, Antonio. Survey on Biotech Platforms in SA, 20 March 2003
14.) National Advisory Council on Innovation and Department of Arts, Culture, Science and Technology. South African Science and Technology, Key Facts and Figures 2002, July 2002
15.) National Department of Agriculture. General Information on Agriculture in South Africa ( http://www.nda .agric.za )
National Biotech Survey 2003 124 16.) NBN Draft Business Plan, 2003 ( http://www.nbn.a c.za )
17.) NRF Business Plan 2003/04 – 2005/06, 27 March 2003 ( http://www.nr f.ac.za/profile/business_plan_april03.pdf )
18.) Organization for Economic Cooperation and Development. Biotechnology Definitions: Second ad hoc Meeting on Biotechnology Statistics, April 2001 ( http://www.oe cd.org )
19.) South African National Biotechnology Strategy, 2001 ( http://www.ds t.gov.za/programmes/biodiversity/biotechstrategy.pdf )
20.) Statistics Canada. Biotechnology Use and Development Survey, 1999
21.) Statistics New Zealand. Modern Biotechnology in New Zealand, April 2001
22.) The Government of the Republic of South Africa. South Africa’s National Research and Development Strategy, August 2002 ( http://www.dst.g ov.za/legislation_policies/strategic_reps/sa_nat_rd_strat.pdf )
23.) TIME. Developments in Molecular Biology, From Mendel to Modern Life Sciences, TIME, March 22, 1999 ( http://www.the core.nus.edu.sg/lifesciences/history.html )
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25.) University of Cape Town. Annual Report, December 2001
26.) USPTO Statistics ( http://www.uspto .gov/web/offices/ac/ido/oeip/taf/clsstc/zax_stc.htm )
27.) USPTO Statistics ( http://www.us pto.gov/web/offices/ac/ido/oeip/taf/asgstc/zax_stc.htm )
28.) van Beuzekom, Brigitte. Organization for Economic Cooperation and Development, Biotechnology Statistics in OECD Member Countries: Compendium of Existing National Statistics, September 2001 ( www.oe cd.or g )
29.) van Brunt, Jennifer. Corporate VCs, Signals Magazine, 2002
30.) Webster and Koch. Biotechnology Survey: A Situational Analysis of South Africa and Sub-Saharan Africa. CSIR internal report, 1998 (see http://www.a fricabio.org.za , full report available from AfricaBio)
National Biotech Survey 2003 125 APPENDIX A: CLASSIFICA TI ONS USED IN THE SURVEY
Sectors and Focus Areas
Please note that some stakeholders, projects or products will fall under more than one category Human Health - Phytopharmaceuticals –pharmaceuticals derived from plants - Disease Genetics –research and product development on the genetic basis of diseases and resistance to diseases - Diagnostics – diagnosis of human diseases using DNA, immunology or physical techniques - Vaccines – development and/or manufacture of human vaccines (live, attenuated, recombinant or subunit) - Disease Physiology – research on the physiological basis and mechanisms of diseases - Drug Resistance – research on the basis of resistance to drugs - Protein Production – production of proteins and antibodies for therapeutics or diagnostics - Disease Prevention – research on or development of products for the prevention of diseases (other than vaccines) - Drug Testing – analytical or in vitro testing of pharmaceuticals - Therapeutics – pharmaceuticals for the treatment of diseases or precursors of pharmaceuticals - Immunotherapeutics – pharmaceuticals directed at the immune system - Gene Therapy – therapeutics based on gene transfer - Disease Resistance – studies on factors conferring resistance to disease - Traditional Medicines – medicines based on indigenous medical knowledge - Clinical Trials – clinical testing of new products - Tissue Engineering – stem cell research, organ research etc. - Drug Design and Development – rational drug design, combinatorial chemistry and drug synthesis strategies - Medical Devices – development of medical devices based on advanced technologies, e.g. cardio stents or imaging - Epidemiology – studies on the prevalence and spread of diseases - Bioprospecting – seeking new pharmaceutically active substances from biodiversity - Human Physiology – studies on general human physiology - Population Genetics – genetic studies on specific populations - Exercise Physiology – physiology of exercise in humans - Drug Delivery – physical and biological delivery systems for drugs - Bioinformatics – use of computing in drug discovery - Reproduction – studies on reproduction and reproductive diseases in humans - Natural Health Products – non-pharmaceutical products from living organisms for human health, e.g. herbal extracts - Microbicides – substances for the removal of bacteria and fungi - Transplantation – studies on organ transplantation
National Biotech Survey 2003 126 - Chemical Exposure – the effects of exposure to various chemicals - Telemedicine – the use of telemedicine for long-distance diagnosis - Nutrition – aspects of nutrition in humans
Animal Health - Vaccines – development and/or manufacture of animal vaccines (live, attenuated, recombinant or subunit) - Diagnostics – diagnosis of animal diseases or species identification using DNA, immunology or physical techniques - Animal Genetics – studies on animal genetics - Animal Physiology - studies on general animal physiology - Therapeutics – pharmaceuticals for the treatment of diseases in animals - Protein Production – production of proteins and antibodies for therapeutics or diagnostics - Animal Nutrition – studies on nutrition in animals and animal feed products - Natural Health Products – non-pharmaceutical products from living organisms for animal health, e.g. herbal extracts - Disease Resistance – studies on factors conferring resistance to disease - Phytopharmaceuticals –pharmaceuticals derived from plants - Probiotics – microbes for use in animal feeds - Traditional Medicines – medicines based on indigenous medical knowledge - Disease Physiology – research on the physiological basis of diseases - Epidemiology – studies on the prevalence and spread of diseases - Product Testing – testing of products for use on animals - Drug Testing – analytical or in vitro testing of pharmaceuticals - Disease Genetics –research and product development on the genetic basis of diseases and resistance to diseases - Disease Control – methods to control animal diseases - Reproduction – studies on reproduction and reproductive diseases in animals - Clinical Trials – clinical testing of new products - Animal Breeding – traditional and GM breeding of animals - Drug Delivery – delivery systems for animal drugs
Plant - Plant Growth Stimulants – products that promote the growth of plants, including fertilizers - Traditional Breeding – traditional breeding of plant cultivars - Marker-Assisted Breeding – identification of markers to select for desired traits in plants - GM Crops – development of genetically modified crops - Plant Genetics – genetics of plant characteristics and adaptation to stress - Forestry Improvement – development of products, processes or technologies for forestry improvement - Bioprospecting – seeking new products from plant diversity -
National Biotech Survey 2003 127 Plant Propagation – development of products and methods for plant propagation - Diagnostics - species identification and diagnosis of plant diseases using DNA, immunology or physical techniques - Natural Products – products derived from plants, algae and seaweed - Plant Physiology – studies on general plant physiology - Plant Pests – studies on plant pests including insects, nematodes, and microbial pathogens - Plant Diseases – studies on diseases affecting plants, e.g. viruses - Biological Control – development and manufacture of natural products for the control of plant pests - Soil Improvement – development of products and technologies for soil improvement - Crop Protection – products for the protection of crops from external stresses - Seaweed Products – products derived from seaweed or kelp - Production in Plants – use of plants to express and produce proteins or metabolites - Plant Adaptation – mechanisms of adaptation to stress in plants - Plant Manipulation System – systems for the genetic transformation of plants - Horticulture – general methods in horticulture for crop enhancement
Food & Beverage - Food Supplements – additives to foods for enhanced nutritional qualities - Nutraceuticals – natural products with nutritional and health benefits - Food Ingredients – additives to foods, including enzymes, colourants, fragrances, starter cultures etc. - Food Fermentation – traditional fermentation for food production - Food Processing – food processing during manufacture - Food Improvement – improvement of foods through products or processes, e.g. enhanced nutritional benefit - Food Analysis – analysis of food using biochemical, microbiological or physical techniques - Food Pathogens and Toxins – studies on the pathogens and toxins found in food - Food Preservation - products or processes for the sterilization of food, e.g. anti-microbials - Probiotics – use of microorganisms in food for health benefits - Wine Production – traditional wine fermentation - Wine Improvement - products or processes for the improvement of wine - Yeast Physiology – studies on the physiology of yeast used in food and beverages - Yeast Improvement - products or processes for the improvement of yeast used in food and beverages - Beer Brewing – traditional beer brewing - Food Allergens – study of the compounds causing allergies in food - Yeast Typing – identification of yeast strains - Biological Control – development and manufacture of natural products for the control of pests on food - Food Science – basic research into food science
Industrial - Protein Production – production of enzymes and proteins for industrial applications - Bioleaching – use of living organisms for the leaching of metals or minerals
National Biotech Survey 2003 128 - Natural Products – large-scale extraction of products from living organisms - Biocatalysts – enzymes of biological origin for use in industrial processes - Bioproduction – use of living organisms or parts thereof for the production of chemicals and other products - Enzymes – enzymes produced through industrial processes - Bioprocessing - use of living organisms for industrial processing, including pulping, oxidation etc. - Process Development – development of processes involving living organisms, including optimization etc. - Bioprospecting - seeking new enzymes and products from living organisms for use in industrial processes - Beneficiation – the conversion of industrial by-products to useful products using living organisms - Production of Biochemicals – production of biological chemicals, e.g. amino acids, antibiotics, vitamins etc. - Specialized Chemicals – production of specialized and fine chemicals - Biotransformation – conversion of compounds using organisms - Acid Mine Drainage – use of bacteria for acid mine drainage - Pilot Production – pilot scale production of chemicals and biological products for product development - Biosensors – sensors used in industrial processes - Biomonitoring – monitoring microbial populations in industrial processes - Biofuels – use of natural products as fuels
Environmental - Waste Treatment – treatment and conversion of waste products and effluents using living organisms - Bioremediation – conversion of waste to useful products - Rehabilitation – use of living organisms to rehabilitate contaminated sites - Water Purification – products and processes for the purification of water - Biofuels – use of biomass as fuels - Diagnostics - detection of environmental pathogens - Biodegradation – use of microorganisms to degrade toxic compounds or effluents - Biomonitoring – bioindicators and monitoring of microbes in the environment - Biosensors – sensors used to monitor the environment
Other - Mariculture/Aquaculture – culturing of marine and aquatic organisms - Platform Technology – a novel technology that enables biotechnology research and/or product development - Characteristics of Biological Molecules – studies on biological molecules, e.g. carbohydrates - General Research – basic research with applications in no specific focus area, e.g. biodiversity - Biological Control – biocontrol of mosquitos etc. - Culture Collection – biological resources - Bioprospecting – seeking new products and processes from biological diversity - Plant-based Cosmetic Products – cosmetic products and ingredients derived from plants - Cosmetic Preparations – products used in cosmetics
Support Services - Biosafety – assistance with biosafety issues for GMOs
National Biotech Survey 2003 129 - Laboratory Supplies – laboratory reagents and biochemicals - Scientific Equipment – suppliers of scientific equipment - Contract Manufacture – contract production of chemicals and biological products - Pilot Production – pilot scale production of chemicals and biological products for product development - Contract Research – contract research on any area - Information Technology/Bioinformatics – IT support for research or product development, e.g. bioinformatics - Raw Materials – supply of raw materials for processes - Core Technology Services – core technology services, e.g. DNA sequencing, oligo synthesis, plant tissue culture etc. - Public Awareness – increasing public awareness of biotechnology - Analytical Services – chemical or physical analysis of substances - Quality Control – analysis of food etc. for quality control - Training – training in various disciplines related to biotechnology - Consulting – general assistance in technical or business aspects - Product Testing – testing of products for safety and efficacy - Packaging – facilities for packaging of products - Medical Equipment Supplier – supplier of medical devices and equipment
National Biotech Survey 2003 130 APPENDIX B: INTERNA T IO NAL P A TENT CLASSIFICA TIO NS RELE V ANT TO BIOTECHNOLOG Y
A01H: New Plants or Processes for Obtaining them; Plant Reproduction by Tissue Culture Techniques
A01N: Preservation of Bodies of Humans or Animals or Plants or Parts thereof; Biocides, e.g. As Disinfectants, As Pesticides, As Herbicides
A23J: Protein Compositions for Foodstuffs; Working-up Proteins for Foodstuffs; Phosphatide Compositions for Foodstuffs
A61B: Diagnosis; Surgery; Identification
A61J: Containers Specially Adapted for Medical or Pharmaceutical Purposes; Devices or Methods Specially Adapted for Bringing Pharmaceutical Products into Particular Physical or Administering Forms; Devices for Administering Food or Medicines Orally; Baby Comforters; Devices for Receiving Spittle
A61K: Preparations for Medical, Dental, or Toilet Purposes
C02F: Treatment of Water, Waste Water, Sewage, or Sludge
C05F: Organic Fertilisers not Covered by Subclasses C05B, C05C, e.g. Fertilisers from Waste or Refuse
C12C: Brewing of Beer
C12G: Wine; Other Alcoholic Beverages; Preparation Thereof
C12H: Pasteurisation, Sterilisation, Preservation, Purification, Clarification, Ageing of Alcoholic Beverages or Removal of Alcohol Therefrom
C12M: Apparatus for Enzymology or Microbiology
C12N: Micro-organisms Enzymes; Compositions Thereof
C12P: Fermentation or Enzyme-Using Processes to Synthesise a Desired Chemical Compound or Composition or to Separate Optical Isomers from a Racemic Mixture
National Biotech Survey 2003 131 C12Q: Measuring or Testing Processes Involving Enzymes or Micro-organisms (immunoassay G01N 33/53); Compositions or Test Papers Thereof; Processes of Preparing Such Compositions; Condition- Responsive Control in Microbiological or Enzymological Processes
C12S: Processes Using Enzymes or Micro-organisms to Liberate, Separate or Purify a Pre-Existing Compound or Composition
G01N: Investigating or Analysing Materials by Determining Their Chemical or Physical Properties
National Biotech Survey 2003 132