The CIPC Strategic Plan

2012 - 20171

Purpose of presentation

• Introduction and background to the CIPC strategy for 2012‐17

• Present some comparative information

• Present the CIPC budget and operational focus for 2012/13

2

Introduction

• CIPC became operational on 1 May 2012;

• New schedule 3A public entity, but a going concern that took over assets and liabilities of existing divisions of the dti, namely CIPRO and OCIPE;

• Challenge has been to forge a new institution with a new and expanded mandate from the merged entity and to define the broader mandate while improving the performance of the existing institutions – “building an aeroplane in mid-flight”. CIPC went “back to basics” to understand its role and mandate.

3

Environmental scanning

• CIPC’s strategic environment and the challenges & opportunities it presents

• CIPC’s legislative mandate, policy context and areas of alignment required

• The needs and expectations of CIPC’s Customers

• Global regulatory reform & best practice

In developing the CIPC strategy, we considered:

This helped define the CIPC’s strategic vision, mission and goals and the manner in which the CIPC will delivery value to its stakeholders – our business model

4

Legislative Mandate

• CIPC administers all or part of 15 laws in the corporate and intellectual property domains;

• Vast legislative compliance role - registration of corporate entities, intellectual property rights, business names and business rescue practitioners, monitoring compliance with governance and disclosure rules, protecting certain IP rights, providing education on the laws and their implications and providing policy support – clear focus on creative industries, protecting invention and facilitating enterprise

Mandate may appear diverse, but presents unique opportunity to explore synergy and interrelationships

5

Policy Context• Government’s New Growth Path

• The dti’s Strategic Plan;

• The Industrial Policy Action Plan 2011-2013;

• Strategy on the Promotion of Entrepreneurship and Small Enterprise;

• The Corporate Law Reform;

• A Co-operatives Development Policy for South Africa and the Integrated Strategy for the Development and Promotion of Co-operatives;

• Policy on Indigenous Knowledge;

• Ten Year Plan on Innovation;

• Mzansi’s Golden Heritage: Contribution of the Arts, Culture and Heritage Sector to the New Growth Path

CIPC accountable to dti, but operates in a broader policy context that spans Departments of Science and Technology, Arts and Culture, Agriculture and Economic Development;

6

Key policy themes• Economic growth & job creation – ‘creating decent work,

reducing inequality & defeating poverty’ (NGP)• Development & exploitation of South African innovations –

‘converting ideas into economic growth’• Stimulation of growth in key sectors - green technologies,

agriculture, pharmaceuticals, business processing & creation of knowledge economy

• Potential of indigenous knowledge, its exploitation – ways to benefit communities, especially medicines and indigenous cultural expressions

• Job creation potential of cultural and creative sectors, especially cultural tourism and film industry- need to develop this sector

• Importance of public and preferential procurement for enterprise and industry development – need for greater transparency & disclosure

• Need to develop SA’s competitiveness – ease of doing business, stimulation of entrepreneurship, sustainable corporate entities, transparency, integrity &high standards of corporate governance

• Batho Pele – reliable, empathetic, respectful and efficient service delivery to the people of South Africa

7

Strategic Environment•

8

International context• Economic context

– Global recession – economic uncertainty; revised economic growth projections, slow recovery expected with slow growth rates even in SA in foreseeable future. Growth in IP and entity registration expected to be limited

• Economic crime– Internationally, various methods of corporate identity theft are being used

to defraud business owners or to mislead consumers. RSA is no exception.

• Corporate governance and disclosure– International emphasis on better regulation of corporate governance and

corporate disclosures. Leading regulators are looking a ways to improve compliance and improving the investment environment;

• Ease of doing business– Ease of doing business is seen as a way to brand countries and investment

destinations. RSA is currently doing well (ranked 35th) and needs to maintain its current status.

9

Regulatory trends• Redefining the role of IP rights and regulation

– IP increasingly used as a valuable strategic asset – nationally as well as at corporate and individual level.

– Global trend in IP licenses is estimated at R7 trillion per annum = 5% of world trade.

– The emergence of low-cost manufacturing in developing countries such as China has changed the IP landscape and challenges the conventional IP right protection and enforcement.

– Big corporations need to find a way of protecting their IP.– What does mean for SA?– Large scale penetration of counterfeit goods needs to be prevented by

continued vigilance at our border; But also means that there needs to be an emphasis on the consumer

10

The Small Business Landscape

11

Of the estimated 5.9m small businesses, only 8.3% were registered with CIPRO in 2010. Businesses in Gauteng, North West and the Northern Cape were most likely to be registered.

Source: FinScope Small Business Survey 2010

The Small Business LandscapeBusiness owners who claimed to have registered their business did not appear to

see much value in registering their businesses:• 54% claimed that registering their businesses meant “compliance with the

law”;• 14% claimed that they registered their businesses to “avoid harassment from

the authorities”;• 7% claimed that they registered their businesses to “avoid fines”;• 6.5% claimed that registration held “no benefits” for their businesses.

The most frequently mentioned reasons for not registering businesses included: • “the business is too small to register”(49% of owners of unregistered

businesses);• “don’t know how to register” (18% of unregistered businesses);• “don’t have money to register” (18% of owners of unregistered businesses);• “it is too complicated to register” (9% of owners of unregistered businesses).

12

Need for a value proposition for enterprise registration, but big opportunity for formalisation

Source: FinScope Small Business Survey 2010

Customer needs segmentation

13

Our New Strategy

14

Our Vision‘Our Vision is to be the leading gateway to growth and sustained participation in the formal economy

for all in South Africa.

Through insightful advice and responsive, reliable service we will enable easy, informed access for our Customers. The integrity of our data will inspire trust

and confidence in all we serve.

We will be worthy custodians of our mandate by supervising, maintaining and enforcing its provisions

with impartiality, integrity and wisdom.’

15

Our MissionOur Mission is to unlock value in businesses and intellectual property by:

• Providing easy, accessible and value-adding registration services for business entities, intellectual property rights holders and regulated practitioners

• Maintening and disclosing secure, accurate, credible and relevant information regarding business entities, business rescue practitioners, corporate conduct and reputation, intellectual property and indigenous cultural expressions

• Increasing awareness and knowledge of company and intellectual property laws, compliance obilgations and the opportunities for that exist for business entities and intellectual property rights holders to leverage growth and sustainability

• Taking the necessary steps to visibly, effectively and efficiently monitor and enforce compliance with the laws that the CIPC administers

16

CIPC Values

Value What it means

Passion for service

We work as one to seamlesssly and passionately serve our Customers

Integrity We demonstrate integrity in all our actions as individuals and as an organisation

Empowerment We recognize the value of our employees and partners and empower them to effectively deliver on their responsibilities

Accountability We are accountable, responsible and responsive in the execution of our duties

Collaboration We believe in teams, teamwork and collaboration with our partners to execute our mandate effectively & efficiently

The CIPC’s set of values was collectively crafted:

17

Our (Aspirational) Value Proposition1.

Access to opportunities for growthAs a registered entity, you are more likely to be able to attract investment in your businesses, through credit or equity. In the same 

way, registered intellectual property rights can be safely commercialised or licensed to third parties, whether through franchising or 

other distribution or manufacturing arrangements. CIPC will provide information to you about the possibilities to grow your 

business or your investment in intellectual property rights.

2. 

Good governance and credibility of information and conductRegistering with CIPC means that investors can rely on the credibility

of your corporate entity’s information and conduct. You will 

be receiving a ‘Certificate of Compliance’

from CIPC which means that you will be perceived as a credible corporate citizen who has 

paid their taxes, complied with good governance and statutory requirements and that the information you provide, such as your 

financial statements and BEE status, will be respected in accordance with global standards. As a Customer, you can rely on the 

integrity and professionalism of registered business rescue practitioners, collecting societies and alternative dispute resolution 

practitioners

in times of crisis.

3. 

Security of lodged informationBeing registered with CIPC means important assets such as intellectual property, shares/equity, products, brands and identity are 

protected from being stolen or misappropriated. As a Customer, you can rely on CIPC to act

against counterfeiters and other 

people who do not respect your trade mark rights.

4. 

Ease of registration (reduced bureaucracy)As a Customer, you can register your business and intellectual property directly through our ‘one stop shop’

on‐line portal

and 

comply with all other statutory registrations at the same time such as Income Tax, Value Added Tax (VAT), Unemployment 

Insurance Fund (UIF) registrations, etc. You can register your business at the same time as you open your business bank account. 

You can register through our other channel partners and receive sound business advice

at the same time. You can receive your 

registration number and certificate on the same day

you register, dependant on whether CIPC can verify your details. 

‘Dealing with CIPC means that you have access to 

opportunities for growth; are compliant with good corporate 

governance principles; have security of lodged information; 

and ease of registration.’

18

Our Strategic Goals1. To improve the competitiveness of

the SA economy by enhancing the reputation of SA businesses and the SA business environment;

1. To contribute to a knowledge-based economy & competitive local industries by promoting innovation, creativity & indigenous cultural expression and knowledge;

1. To promote broader formal economic participation by enhancing service delivery and extending the reach of CIPC.

19

Strategic Goal 1: Business Regulation and Reputation

20

Strategic Goal 2: Innovation and Creativity Promotion

21

Strategic Goal 3: Service Delivery and Access

22

Benchmarking CIPC

23

Benchmarking – which countries?Country GNI per capita GDP Population Enterprise density

(No of companies per 1000

population)

Ease of Doing Business Rank 2012

India US$ 1,527 US$ 1.704 trillion (2010 estimate)

1,171billion 0.12 (2008) 132

Brazil US$ 9,390 US$ 2.422 trillion (2009 estimate)

195 million 2.38 (2009) 126

Singapore US$40,920 US $208.77 billion (2010 estimate)

5,1 million 7.40 (2009) 1

New Zealand US$ 32,145 US$ 153.252 billion (2009 estimate)

4,4 million 17.08 (2009) 3

Australia US$ 43,740 US$ 1.448 trillion (2010 estimate)

22,3 million 6.38 (2007) 15

United Kingdom US$38,540 US $2.25 Trillion (2010 estimate)

62,2 million 8.05 (2009) 7

Rwanda US$540 US $5.63 Billion (2010 estimate)

10,2 million 0.51 (2009) 45

South Africa US$ 6,100 US$ 383.124 billion (2010 estimate)

49,9million 0.77 (2009) 35

24

Note: Time taken until fully registered with all relevant national offices including tax and labour

Source: World Business survey 2011

0

5

10

15

20

25

Canada New Zealand

Australia Singapore Rwanda Mauritius South Africa

Starting a businessAccording 

to 

the 

World 

Business 

Survey 

2011, 

most 

of 

the 

top 

ranked 

countries 

are 

able 

to 

complete 

the 

process 

to 

start 

a 

business 

(from 

application 

to 

ready 

to 

trade) 

in 

5 

days 

or 

less. 

These 

countries 

are 

also 

able 

to 

register 

a 

company 

in 

1 

day. 

By 

comparison, 

South 

Africa 

takes 

up 

to 

15 

times 

longer 

(based 

on 

management 

estimate 

of 

average 

time 

taken) 

than 

these 

top 

ranked 

countries. 

25

Best Practice – Starting a Business

Note: Time taken until fully registered with all relevant national offices including tax and labour

Source:World Business survey 2011

Note: Time taken from application until company registered (including name reservation)

Source: World Business Survey 2011, registering authority websites, management interviews

0

2

4

6

8

10

12

14

16

Canada New Zealand

Australia Singapore Rwanda Mauritius South Africa

Register a company

26

Best Practice ‐

Registration

Comparative Patents StatisticsNumber of patent granted by selected countries 2001-10 [Break- down by residents/non- residents (domestic/foreign)]

Patent_Office Applicant_Type 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001Australia Residents 1,178 926 925 1,086 924 1,163 1,177 1,021 980 1,070

Non Residents 13,379 11,484 10,938 10,150 8,502 9,816 11,562 12,035 12,632 12,633Total 14,557 12,410 11,863 11,236 9,426 10,979 12,739 13,056 13,612 13,703

Brazil Residents 314 341 234 233 249 674 685Non Residents 2,937 2,431 2,279 2,232 2,190 3,949 2,904Total 3,251 2,772 2,513 1,855 2,465 2,439 4,623 3,589

India Residents 1,725 2,541 3,173 1,907 1,396 851 615 619 529Non Residents 4,443 13,520 12,088 5,632 2,924 1,466 911 921 1,020Total 6,168 16,061 15,261 7,539 4,320 2,317 1,526 1,540 1,549

New Zealand Residents 394 457 430 491 416 391 419 1,018 391 258Non Residents 3,953 2,955 2,773 3,101 2,996 3,798 5,152 9,106 2,191 3,281Total 4,347 3,412 3,203 3,592 3,412 4,189 5,571 10,124 2,582 3,539

South Africa Residents 821 822 860 915 866 1,003 956 922 983 966 Non Residents 5,562 5,913 7,081 7,402 6,739 6,001 5,833 5,303 5,617 5,427Total 6,383 6,735 7,941 8,317 7,605 7,004 6,789 6,225 6,600 6,393

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Patents StatisticsAs it can be seen on the next slide, that the ratio between the patent applications filed by domestic applicant as opposed to foreign applicants [ residents/ non residents applicants for the period 2006- 2010 is at average 11.8%.

According to Statistics SA the Balance of Payment of Royalties Account in 2008 has about R 12 bln deficit.There is a clear need to strengthen our local economy to improve this balance.

However, if one looks at the strategic plans not only of the countries with emerging economies but also in developed countries such as USA, it can be seen that one of the strategic goals of their Patent & Trade Mark Offices is to accelerate the innovation of the local economy.

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Comparative Patents StatisticsNumber of patent applications filed by selected countries 2001-10 [Break-down by residents/non- residents]

Patent Office 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001Australia Total 24,887 23,681 26,346 26,840 26,003 23,857 22,833 21,594 22,545 22,735 Australia Domestic 2,409 2,494 2,821 2,718 2,837 2,555 2,559 2,418 2,364 2,187 Domestic/Foregn % 9.70% 10.50% 9.70% 10.70% 10.90% 10.70% 11.20% 11.20% 10.50% 9.70%Brazil Total 22,686 21,944 22,917 21,825 24,074 20,005 19,272 17,704 16,022 17,204 Brazil Domestic 2,705 3,921 4,084 4,023 3,810 3,905 3,958 3,689 3,365 3,323 Domestic/Foregn % 11.90% 17.90% 17.80% 18.40% 15.80% 11.90% 19.50% 20.80% 21.00% 19.30%China Total 391,177 314,604 289,838 245,161 210,501 173,327 130,384 105,317 80,232 63,450 China 293,066 229,096 194,579 153,060 122,318 93,485 65,786 56,769 39,806 30,038 Domestic/Foregn % 75% 73% 67% 62% 58% 54% 51% 54% 50% 47%India Total 34,287 36,812 35,218 28,928 24,382 17,466 12,613 11,465 10,592 India Domestic 7,262 6,425 6,296 5,686 4,721 4,014 3,425 2,693 2,379 Domestic/Foregn % 21.20% 17.00% 17.90% 19.70% 19.40% 23.00% 27.10% 23.50% 22.50%New Zealand Total 6,636 6,358 5,724 7,844 7,365 7,005 6,531 6,873 6,948 7,275 New Zealand Domestic 1,585 1,555 1,256 1,892 2,153 1,893 1,631 1,845 1,839 1,768 Domestic/Foregn % 23.90% 24.50% 22.00% 24.10% 29.20% 27.00% 25.00% 26.80% 26.30% 24.30%South Africa Total 6,383 6,735 7,941 8,317 7,605 7,004 6,789 6,225 6,600 6,393 South Africa Domestic 821 822 860 915 866 1,003 956 922 983 966 Domestic/Foregn % 12.90% 12.20% 10.80% 11.00% 11.40% 14.30% 14.10% 14.80% 14.80% 15.10%

29

Patents filed by Universities and Public  Institutions

Sample of Universities No of Patents 

filed 02‐12

University of Witwatersrand 272

University of Stellenbosch 148

University of Cape Town 70

University of KwaZulu Natal 37

University of Pretoria 22

Tshwane University of Technology 13

North West University 13

Durban University of Technology 10

Central University of Technology FS 9

Universities of Free State & Johannesburg 7 each

Nelson Mandela Metropolitan University 4

University of Western Cape 4

Year No of Patents 

filed by 

Universities

2002 1

2003 4

2004 8

2005 30

2006 43

2007 70

2008 105

2009 119

2010 130

2011 117

2012 17

Total 644 30

Budget and Output

31

Budget breakdown

Programme 2012/13 2013/14 2014/15 2015/16 2016/17

Rm Rm Rm Rm Rm

Business Regulation and Reputation 134.8  150.9  174.6  188.4  208.6 

Innovation and Creativity Promotion 62.5  70.7  80.5  87.9  102.2 

Service Delivery and Access 251.3  255.2  271.1  282.9  293.4 

Total operational expenditure 448.6  476.8  526.2  559.2  604.2 

Special initiatives* 100.0  50.0  20.0  ‐ ‐

Total Expenditure 548.6  526.8  546.2  559.2  604.2 

Projected Revenue 361.9 366.8 399 414.8 413

Reserves 186.1 142.4 134.6 114.4 142.7

Projected Revenue from Fee Increases 17.6 12.6 30 48.5

Total Funds Available 548.0 526.8 546.2 559.2 604.2

32

Budget breakdown for 2012/13

Programme 1 Programme 2 Programme 3 Total

Employee 

compensation

R103.5m R40m R79.5m R223.5m

Interns R2.4m R1.1m R0.7m R4.2m

Staff training R4.5 R2.8m R5.5m R15.5m

Administration R11.7m R7.6m R86m R105.3m

Programme 

expenditure

R12.7m R11m R79.6m R102m

Total R134.8m R62.5m R251.3m R448.6m

Special Projects R100m R548.6m

33

Budget breakdown by Programme for 2012/13

34

Budget Breakdown by expenditure item for 2012/3

35

Programme 1: Business Regulation and Reputation

Budget Outputs

Employee 

compensation(R103.5m)

Projected staff numbers: 260 staff members  Focus on improving 

verification of information, turnaround time on registration and

investigations, building a compliance culture and issuing 

compliance certificates, developing full accreditation schemes for 

intermediaries and business rescue practitioners; registers of 

directors and delinquent ones, business names.  

Interns (R2.4m) Projected number of Interns: 40

Staff training(R4.5m)

Local and international training; emphasis on substantive training 

on legislation, placement with other regulators etc

Administration(R11.7m)

Main costs are telecommunications, travel and workshops

Programme 

expenditure(R12.7m)

Allocations for litigation and legal fees, external research and

analysis and education and awareness (small business/ enterprise

density research, publications and campaigns – Year of Co‐

operatives, promotion of trademarks)

36

Programme 2: Innovation and Creativity Promotion

Budget Outputs

Employee 

compensation(R40m)

Projected staff numbers: 74. Emphasis is on improving processes and 

substantive capacity, building new capacity in the area of indigenous 

knowledge, policy analysis and research and expanding capacity in 

education and outreach. More data analysis to understand and inform 

policy in innovation and creativity promotion, as well as 

commercialisation.  

Interns (R1.1m) Projected number of Interns: 18

Staff training(R2.8m)

Local and international training, especially WIPO; emphasis on 

substantive training on legislation, placement with other regulators etc

Administration(R7.6m)

Main costs are telecommunications, travel and workshops (international 

meetings)

Programme 

expenditure(R11m)

Allocations for litigation and legal fees, external research and

analysis 

and education and awareness (publications and campaigns for 

indigenous knowledge, innovation and creativity, IP rights, anti‐piracy,)

37

Programme 3: Service Delivery and Access

Budget Outputs

Employee 

compensation(R79.5m)

Projected staff numbers: 242. Focus on building new capacity in ICT, 

(while co‐sourcing), channel management, information 

management and governance (incl. forensic auditing)

Interns (R0.7m) Projected number of Interns: 12

Staff training(R5.5m)

Focus on technical training, customer service training, contract

management, corporate governance etc

Administration(R86m)

All costs related to ICT expenditure, building rentals, off‐site 

document storage, equipment, governance related expenditure 

(external services and committees) etc

Programme 

expenditure(R79.6m)

Litigation and publications costs, co‐sourcing certain ICT services 

e.g. hosting of infrastructure, etc.

Special Projects 

(R100m)

Special projects related to ICT upgrades, data cleansing and moving 

to a new building

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Conclusion …..•Strategy is a journey not just a destination!

– CIPC has embarked on a long-term strategic journey to improve service delivery AND to develop a new institution;

• able to execute on its enhanced mandate• able to confidently, consistently and pro-actively regulate • able to directly add value by meeting the needs of the economy, its Customers &

stakeholders as well as the citizens of South Africa– CIPC’s focus is on a strategy that describes a compelling picture of future

success AND on developing the capability& capacity required to accelerate and sustain execution

– Much has been achieved in the past year but the CIPC strategy describes a long-term process - will take five years to complete

– CIPC’s strategy must be relentlessly executed AND continue to be responsive to the CIPC’s rapidly changing, globalised context

• Organisations don’t execute strategy, people do!– We will continue to build the confidence, commitment and competence of our

people to be enthusiastic, passionate and creative executors of our strategy!

39

I 

have 

discovered 

that 

after 

climbing 

a 

great 

hill, one only finds that there are many more to 

climb 

… I 

can 

only 

rest 

for 

a 

minute, 

for 

with 

freedom 

comes 

responsibilities 

and 

I 

dare 

not 

linger for my long walk is not yet ended

Nelson Mandela

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