South Africa entered a brave new world in 1994. Technology was being developed at a breakneck pace, and the country had to move fast to keep up, with the IDC leading it forwards.
The new South Africa came into being just as the world was entering a phase of lightning fast technological growth. In the past 20 years, the use of technology has undergone a sea change and business around the world has had to invest heavily in new technologies to keep pace.
In addition, new businesses specialising in information and communication technology, such as call centres, equipment manufacturers and service providers in a variety of fields, have proliferated as the need to be innovative has taken root in a highly competitive environment. Bearing in mind these changes and the need for South African companies to remain relevant, the Industrial Development Corporation has established several business units and funds since 1994 to address the funding requirements of companies in this space. A key focus area is to provide funds to encourage the development of new technologies and on helping companies to take these new technologies commercial.
In 2000, the IDC set up its Wholesale Venture Capital Department, which invested a total of R594 million in nine externally-managed funds. The objectives of the funds that the corporation invested in were to facilitate the commercialisation of new locally-developed technologies, and the empowerment of previously disadvantaged groups, including the support of women-owned and –managed businesses.
Also in 2000, it established the Techno-Industries Strategic Business Unit, which later became known as the ICT Strategic Business Unit. Unlike the funds, this unit focused on helping companies in the information technology, communications and electronics sectors that employed existing technology.
Some years later, in 2007, the Venture Capital Strategic Business Unit was established to ensure that funds for venture capital were applied to early stage investments by qualifying companies. At present, the focus of the unit is to provide funding to companies that commercialise globally unique South African technologies. Since setting up the unit, the IDC has invested R707-million (R778-million in 2013 prices) in early stage technology companies, ranging from biotechnology and medical devices to green technology and others.
The IDC has also provided grant funding to companies to develop new technologies through the Department of Trade and Industry's Support Programme for Industrial Innovation (SPII) and the Technology Venture Capital Fund. The latter gives funding to smaller companies to commercialise innovative products, processes and technologies.
Highlights of the investments in new industries in the past 20 years include:
- The IDC invested R75-million in each of four technology focused funds: Argil Priv8 e-Quity; Archway Venture Partners; Horizon Techventures; and Entree Investment Holdings which later became Vantage Venture Capital;
- It invested in the Bioventures fund;
- It approved funding to Diagnostic Medical Devices to commercialise a product that could distinguish between normal and pathological heart sounds in infants;
- It funded Wondermed's automated portable wound management system; and,
- It supported Photovoltaic Technology Intellectual Property, a spin-off company of the University of Johannesburg which owns the intellectual property for producing thin-film solar modules.
Other noteworthy examples of new technology projects in which the IDC is involved include: Lodox, a South African company that created the world's first full-body, low-dose, digital x-ray imaging system; and Iluba, a company that developed a technology that extends the vase life of cut roses to more than six months.