The National System of Innovation (NSI) can broadly be defined as a network of players in a country that interact to constitute the country's innovation system. The CSIR and other science councils play a vital role in the NSI – a role that is distinct and complimentary other players such as tertiary education institutions (TEIs) and small and large business.
Public sector research is an essential component of an NSI due to its longer term and more applied nature. Whereas in the private sector, competittiveness is the major driving force for innovation, socia-economic return is of major importantance in the public sector. A large proportion of TEI research, for instance, is undertaken in the interest of advancing knowledge. This role for government funding is most obvious from an examination of the Frascati categories, which shows that business enterprise R&D is mostly concentrated on experimental development (research closely linked to the development of new products and services), whereas the research by TEIs is dominated by basic research.
The CSIR and the science councils have a central role in the NSI. Many governments continue to fund national research laboratories in addition to universities to compliment their applied focus.
The research role of the CSIR is essential within the NSI. Its dominant focus on applied research (leading to innovative products and services) is still some way from near-market products and services and hence subject to higher commercial and technical risk, thus requiring continued government funding. This comes with the associated responsibilities of human capital development, diffusion of technologies, maintenance of essential research and scientific infrastructure, undertaking of longer term research of industrial applications and of high social importance (and not necessarily of high economic return), and the establishment within South Africa of research programmes in emerging areas of S&T.
Strategic Contract R&D partnerships are an evident part of contributing to the NSI.