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SA Policy Space

R&D Investment Escalation — Reaching 1.5% of GDP

Skills & EducationProposedLong TermRaised 9× in committeeHigher Education and Training

Theme: Science, technology and innovation

First raisedOct 2019Last discussedFeb 20269 meetings on the record ↓
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Reform at a glance

What changes
R&D Investment Escalation — Reaching 1.5% of GDP
Responsible actor (recorded)
DSI / National Treasury / NRF
Recorded status
Proposed — editorial assessment.
Milestone described by this status
Status scope has not yet been independently documented; it may cover only part of this reform.
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Next milestone not yet documented
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Description

South Africa's gross expenditure on research and development (GERD) stands at approximately 0.6% of GDP (2023/24)—well below the National Development Plan's 1.5% target and the OECD average of 2.7%. Business expenditure on R&D (BERD) is particularly low at 0.3% of GDP, compared to 2.0% in South Korea and 1.2% in Brazil, reflecting limited domestic innovation investment by the private sector and structural dependence on technology licensing from multinationals. The R&D Tax Incentive (Section 11D of the Income Tax Act), which provides a 150% deduction for qualifying R&D expenditure, has not achieved the uplift anticipated at its 2012 introduction: fewer than 200 companies claim the incentive annually, constrained by the narrow definition of qualifying R&D and the complex approval process administered by DSIT. The STI Decadal Plan sets a credible path to 1% of GDP by 2027 and 1.5% by 2032. Reforms proposed: broadening the Section 11D definition to include market validation and design activities, creating an R&D voucher scheme for SMMEs (complementing the Innovation Fund, id=68), and establishing a government R&D procurement programme that counts as public GERD. The PC on Science BRRRs note DSIT's own budget declining in real terms, the opposite of what the Decadal Plan requires.

Assessment

Growth Impact3/5
Feasibility3/5

Responsible: DSI / National Treasury / NRF

Feasibility Assessment

Medium. Fiscal constraints limit near-term public R&D growth. Tax incentive enhancement and IP commercialisation framework reform are more achievable in the short run.

South Africa cannot build a knowledge economy on 0.6% of GDP in R&D investment—reaching 1.5% requires both public budget growth and private sector R&D incentives that actually work for the innovation activities our firms actually do. — DSIT STI Decadal Plan Baseline Assessment, 2022

Evidence & Research

No linked research evidence yet. Coverage is incomplete.

Policy documents

1 document
  • Provincial Economic Review and Outlook 2025Provincial PER

    Western Cape Provincial Treasury · 2025

    Western Cape · Western Cape Province

    The Growth for Jobs Impact Pulse records Western Cape R&D spend rising from 1.58 per cent of GDP in 2021/22 to 1.70 per cent in 2022/23, against a target of consistent positive annual growth. (sec 2.2, box 'Impact of the Growth for Jobs (G4J) Strategy: Early Outcomes', p. 51 (PDF p. 68))

    Judged by the model

Provincial treasury reviews, Auditor-General findings and Operation Vulindlela progress notes. Each line is drawn from the document at the page reference given — follow the link to check it in context.

Parliamentary record

9 meetings

Committee sittings this reform was drawn from, most recent first. Each row opens the meeting on this site; the PMG link goes to the source record.

All 9 meetings

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Status History

tracked since Mar 2026
  1. Recorded as Proposed when status tracking began — held since at least Mar 2026.
    Mar 2026

Data as of 2026-10-12 · latest PMG meeting 2026-10-09