South Africa unveils plan to commercialise $1.8 billion research spending

South Africa has unveiled a new strategy to commercialise more of its R30 billion (US$1.8 billion) annual research and development spending, as the government pushes to turn research into businesses, jobs and new industries.

The Technology Innovation Agency (TIA), a government-backed innovation fund under the Department of Science, Technology and Innovation, on Tuesday launched TIA 2.0, a new commercialisation-focused strategy designed to help more locally developed technologies survive the so-called “Valley of Death”—the gap where promising research fails to reach the market.

“South Africa is spending about R30 billion on research and development every year. Unfortunately, much of this investment goes into what is called the Valley of Death,” TIA chief executive officer Titus Mathe said at the launch event.

TIA 2.0 represents a structural overhaul of South Africa’s innovation system, shifting the agency from a project funder to a commercialisation catalyst. The agency is deploying capital into strategic sectors such as AI, electric vehicles, climate tech and critical minerals, while targeting the country’s R30 billion ($1.8 billion) annual research spend that too often fails to reach the market.

“How can we capitalise on this investment and take research that is promising and commercialise it? That was really the main idea behind the formation of TIA,” Mathe said.

He stressed that under TIA 2.0, the agency is shifting from funding individual projects to supporting large-scale innovation programmes capable of creating industries and driving economic growth.

“We are moving away from just managing projects to managing programmes that deliver high impact,” he said.

The strategy is backed by a significant financial boost following TIA’s receipt of R1.2 billion ($73 million) from a successful biotechnology investment made nearly two decades ago. The agency invested R24 million ($1.4 million) in Kapa Biosystems around 20 years ago and recently realised a $73 million return after the company commercialised its technology.

“The payout is one of the government’s biggest innovation investment success stories and a model for future technology investments,” said Mathe.

A key pillar of the programme is black empowerment and transformation within South Africa’s venture capital ecosystem.

TIA has earmarked R473 million ($27.8 million) for venture capital and innovation funds, including investments into black-owned and women-led fund managers that often struggle to access institutional capital despite being closer to underserved entrepreneurs.

Among the beneficiaries is Mamor Capital, a women-led investment firm focused on digital connectivity and financial inclusion.

Founder Mamokete Ramathe said the R40 million ($2.3 million) TIA’s backing helped the fund reach a critical fundraising milestone after a difficult three-year capital-raising journey.

“We believe technology-enabled businesses have the potential not only to create commercial value, but also opportunities for millions of South Africans that continue to be left outside of the digital economy,” she said. “Mamor Capital can now support entrepreneurs tackling digital exclusion and financial access challenges.”

Another beneficiary, Aions Ventures, said TIA’s intervention demonstrates how ecosystem collaboration can unlock innovation.

“TIA today is a trailblazer in demonstrating what ecosystem collaboration looks like in practice,” said Karabo Makete, Principal Investment Officer.

Mathe added that TIA is also investing approximately R62 million ($3.6 million) into sovereign AI initiatives, including support for Mzansi Mindz, a locally developed large language model aimed at reducing South Africa’s dependence on foreign AI platforms.

“We want to develop our own locally developed large language models,” Mathe said. “AI is here to stay. We have to embrace it, but we cannot be left behind.”