'Most VCs today are not visionaries'

At a recent Innovation City event, I interviewed Jonathan Jansen and Max Price about innovation at South African universities

This interview from the business ink tank event hosted at Innovation City in Cape Town has been edited for Our Long Walk, my blog about the past, present, and future of South Africa. Please consider a paid subscription to access the full interview and all of my twice-weekly content, including columns, guest essays, and summaries of the latest relevant research.

Jonathan Jansen is a distinguished professor of education at Stellenbosch University. The immediate past president of the Academy of Science of South Africa, he is the author/editor of three new books: On discovery (CUP), Academic Xenophobia (Palgrave Macmillan), and a memoir, Breaking Bread (Jonathan Ball).

Max Price was Vice Chancellor of the University of Cape Town from 2008 to 2018. He now consults in public health, higher education, and strategic leadership. He is the author of Statues and Storms: Leading through change (Tafelberg).

1. As former vice-chancellors of South African universities, you’re both well-acquainted with the challenges facing higher education. In a recent blog post on Our Long Walk, I identify ‘The Four Horsemen of the University’ as financial pressures from declining public funding, increasing administrative burdens, ideological conflicts over the purpose and content of education, and technological disruptions. Which of these challenges do you find most concerning for South African universities, and why?

JJ: The biggest challenge facing SA universities is the slowness of response to the massive and rapid disruptions of universities with respect to AI and the capacity for harnessing and analyzing very large datasets. No South African university has compulsory courses in AI in every department or discipline, and this is a major concern. As one Stanford bulletin put it: AI won’t take your job but you might not have a job if you don’t know AI. This wholesale reorientation towards technology in the context of ongoing disruptions (including future epidemics) will keep most (not all) SA universities continuing to play catchup.

MP: The SA university landscape is not homogeneous and therefore different parts of it face different critical pressures. For all, I think the financial pressures are the most critical – both in terms of addressing the challenges of keeping fees down to levels that the majority can afford or alternatively compromising on access, the quality of infrastructure and especially accommodation, the size of classes and variety of courses and options available to students, the support that can be given through bridging programmes and adequate numbers of tutors. Where universities face different challenges is that many are obliged to admit students who are so ill-prepared for university by the public schooling system, that they cannot remedy that deficit and produce consistently high-quality graduates – which has a terrible impact on the employability of those graduates and of course on the economy which needs those skills – and is a huge waste of public funds. At the other end of the spectrum, research universities are being seriously compromised by under-funding because the research endeavour depends to a great extent on adequate numbers of academic staff such that each can devote at least a third of their time to research.  The massification that has been forced upon them without pro-rata budgets compromises this severely.

2. How should the South African government balance the urgent need to address pressing developmental challenges like poverty and unemployment, possibly through initiatives like a Basic Income Grant (BIG), with the importance of investing in research at universities? Given that the benefits of such research are often only realised in the medium term and may appear as an elite expense in the South African context, potentially exacerbating inequality, how can we build a consensus around the importance of investing in innovation?

JJ: SA has consistently remained underinvested in science, technology, and innovation as a percentage of GDP compared to other middle-income countries. No amount of persuasion, including legitimate claims that for SA, the social and individual rates of return to investment in education remain among the highest in the world, will shift government in this desired direction. Politics will always trump evidence and policy in allocative decisions in SA’s political economy.

MP: First, it’s not either-or; it’s not a choice between spending nothing on research and allocating as much as possible to the social safety net and development, or vice versa. It is about balance. One guideline is to see what countries that started out poor and have succeeded in growing their economies, like the Asian tigers, spent on research and innovation – and there has been a general consensus that it should be between 1% and 3% of GDP. I would argue we should target 1% going to universities. However, the impact of such investment is as much via externalities as it is via economic growth – for which the evidence is more uncertain.¹ Benefits such as retaining good researchers and good academics in the country and the spin-off of that on people’s confidence in local universities, their inclination to stay in the country and send their children to local universities, the impact on national pride and self-confidence (think of the impact of Barnard’s first heart transplant), the impact on training local scientists with advanced skills that the economy desperately needs – think of the number of computer scientists, data scientists, network engineers that the SKA is producing – most of whom will not work in the fields of astronomy and astro physics, but in data science and IT. Similarly with regard to medicine.

There are also some questions that can only be answered here in SA – if we don’t fund the research on biodiversity on the Western Cape floral kingdom, it would not get done. Do we really want to live in the country where humankind originated, but have it all explained to us by researchers from abroad? The contribution to world literature and history and sociology and economics of inequality, are part of our commitment to the global human enterprise – not just the local one – and If SA wants to be seen as a player in the global knowledge economy – it needs to have something to show – not a lot, but something.

But there is another economic argument based on returns on investment. Most funding for research in SA does not come from government, nor from the private sector. It comes from large research funders in the global north. But we are only able to attract and absorb that funding if we have the basic infrastructure and human talent. So an investment by government to create the foundations of a research enterprise at SA universities will be greatly amplified by the investment in research that is attracted from abroad.

Finally, however, since the costs of building this infrastructure are quite high, and importantly, since such infrastructure requires that at each research centre there is a critical mass of researchers from multiple disciplines, and since we plan to limit the spending to say, 1%, it is not possible to do this at 24 universities – that is a waste since very few of them can achieve the depth of human and physical research infrastructure that is required to be globally competitive. So the government should select, say, six universities and really invest in them to become research-intensive. (This is exactly the strategy in USA, Germany, China, UK and most other successful research countries – in the USA less than 300 out of 2000 registered universities and colleges are designated and funded as research institutions.)

3. In March, the Washington Post reported that as tech behemoths such as Meta, Google and Microsoft funnel billions of dollars into AI, a massive resources gap is building with even the country’s richest universities. For example, Meta aims to procure 350,000 GPUs that are essential to run the gargantuan calculations needed for AI models. In contrast, Stanford’s Natural Language Processing Group has 68 GPUs for all of its work. That means that big tech companies will continue to dominate new innovations: In 2022, the same newspaper reports, the tech industry created 32 significant machine learning models, while academics produced three. Are universities still the best place to do fundamental research?

MP: The developments in AI research mirror the earlier developments in pharmaceutical research – most of the big discoveries and new drugs are developed in industry. But, in many other fields the opposite is true – e.g. in the humanities, law, business studies, music and the performing and fine arts, and in non-pharmaceutical medicine. Engineering is a mixed bag. It’s obviously a consequence of funding models and scale. Really basic science research, where the journey to a product and a profit is long, very uncertain, and expensive, is generally unlikely to be pursued in the private sector, even in the behemoths. But it does suggest that funding to universities should concentrate on the basic sciences not so much on solving problems and applied research – unless there are specific gaps in applied research that no one else is filling – e.g. TB research where pharma companies cannot expect to make much profit because of the distribution of the disease in poor countries.

It is also the case that even the tech companies, almost as a rule, will only employ PhD graduates in their research divisions, and they need the universities to produce the PhDs (and the degrees that lead up to PhD). PhDs are only produced in research universities. So they need the research universities to survive and to flourish. I believe they will provide funds, and access to infrastructure to ensure that we produce what they need. But we (the SA universities) will have to fight for our share, and ensure we have partnerships in place to benefit from the tech companies investments.

JJ: Universities will always remain prime sites for basic and applied research but for some decades now, not the only or even most important sites. However, universities as institutions are ideally positioned to continue to pursue durable and high-value research, especially in the humanities, social sciences, and education. Perhaps not as much in the biomedical sciences as demonstrated in the production of vaccines during COVID-19; that said, some of those vaccines were produced through powerful partnerships between experts in universities and the private sector alike.

4. Universities, both public and private, depend on public support. Yet Americans, in general, do not believe that higher education is on a positive path. In a June GALLUP poll, 31% say universities are headed in the right direction and 68% say they are headed in the wrong direction. Among Americans who lack confidence in higher education, 41% cite concerns about colleges being "too liberal" or "indoctrinating" students, while 37% criticise higher education for not teaching relevant skills or preparing graduates for employment. Of those who have confidence in higher education, only 5% cite innovation as a reason, noting that universities are at the forefront of new developments. Is this lack of recognition for innovation concerning, especially given the importance of innovation in keeping universities relevant and effective in a rapidly changing world? How do you see this playing out in the South African context?

JJ: That is an American public opinion poll that has said the same thing for some years now and yet the demand for higher education remains very high in that country. In South Africa, where relatively few students for the age group go to university, the demand is and will remain high for the foreseeable future in part because technical and vocational education options have been such a dismal failure.

MP: Unfortunately (or perhaps fortunately) South African universities get minimal research funding from ‘the public’ i.e. the kinds of respondents who get polled. Research funding comes from large research grant-making foundations and private philanthropy foundations that often have specific missions – mental health, climate change, human origins, and inequality … These major research funders do not, in my opinion, share the scepticism of the general public. On the other hand, to the extent that, as described above, we depend on government funding to lay the foundations for our research capacity (PhDs, infrastructure, research academics, systems), and if government funding were to decline further due to popular disenchantment with universities, then there would be a problem.

5. The United Nations predicts that by 2050, more than 1 in 4 people globally will be African, a significant increase from 1 in 11 in 1960. Given this dramatic shift, what can and should South African universities do to position themselves for the increasing demand for education from this growing population? What are the potential threats and opportunities that come with this demographic shift, both within the continent and globally? Additionally, what strategies are the top universities in the US and Europe likely to adopt in response, and how might these impact South African universities?

MP: The opportunity is clearly to grow the SA universities in response to demand from the continent. It is an opportunity to grow and to secure better funding in the face of declining government funding and fee affordability for local students. But this growth requires that universities more than fully recover the costs of such expanded delivery (more - because they are currently underfunded per capita and the quality will have to improve, especially to become competitive with other higher education providers from the rest of the world). It also requires the government to play ball with the universities – not to put barriers up for study visas; to offer quick turnaround time for travel and visa applications; and to allow universities to charge differential fees to non-SA students (which we may currently not do for SADC students – the majority of our foreign students). We need reassurance that our growth will not be limited (it is currently capped) so that the intake of foreign students will not reduce the number of SA students we admit. We also need to do better in distance learning support for students who, for any reason, cannot always be on campus. We need to market SA’s university opportunities seriously – currently, we are generally passive and put to shame by the recruitment efforts of global north institutions. We may also need to have satellite campuses in other countries to reduce the total cost of study and provide support to part-time students. Such campuses could be shared by several SA universities.

The threat is from the global north universities that are getting hungrier by the year because their youth populations are in decline, and as a result, they have half-empty classrooms and have to shed academic staff. Many in non-English speaking countries have already converted their courses to English medium in order to attract international students. They are desperate to recruit the growing African population. We could easily lose out if we are not proactive.

JJ: Demographic shifts of this kind are an opportunity for growth and development, not a threat. Our biggest problem on the continent is access to high-quality universities that retain the best and the brightest. The major threat to higher education and development in SA is unchecked xenophobia and its implications for SA and the continent; put that on the discussion agenda.