South African ICT Sector Development Framework

CHAPTER 1
Introduction

What this Strategy Framework is about

This document sets out an Information and Communications Technology (ICT) Sector strategy Development Framework for South Africa. It is acknowledged that there is no single IT industry but a range of industries that are commonly referred to as the ICT Sector. (See Chapter 2, – Situation Analysis: Defining the ICT Sector for a description). The strategies contained in this framework addresses the key issues that will help the country become more proactive in its approach to embrace the information age and to become a key player in the global ICT market. It is designed to assist South Africa achieve its economic, social upliftment, empowerment and overall prosperity goals.

The utilisation of ICTs will result in many opportunities for all enterprises to grow and prosper in the years ahead. Enterprises which are slow to recognise challenges and seize opportunities will find themselves unable to compete successfully on a global scale. Countries successful in adapting to global market trends and transforming their ICT Sectors to offer better products, services, time cycles, and price will retain, or improve, their overall competitive position. Change will be seen as a norm to continued prosperity and sustainability.

The implementation of an ICT Sector Development strategies is a timely and important undertaking for South Africa. An aggressive approach to ICT sector strategy development will provide significant social and economic opportunities for the people of South Africa.

South Africa must take immediate and decisive action to build its ICT sector capabilities to position itself as an international player. The challenge for South Africa will be to co-ordinate and consolidate its available resources, to recognise and support champions for strategy implementation, to facilitate co-operation among all stakeholders, and to align national, regional and local activities.

The essential elements of the strategy framework are presented in the context of the current situation in the South African economy, with realistic approaches and implementation plans. To be successful, the ICT Sector strategy Development Framework must be clearly seen as creating employment,; reducing barriers to, and stimulating, innovation,; and encouraging social and economic development initiatives.

Why the Strategy Framework is needed

The Information Age is characterised by global competition based on a high level of information infrastructure with no geographic boundaries. One of the key trends of the Information Age is that of globalisation, the ability to access worldwide resources through innovative technological applications. The main challenge for countries outside of the developed world is to become increasingly proactive rather than reactive in the development of their indigenous ICT Sectors. Many nations – developed and developing – recognise this reality and are developing and implementing their own broad ICT strategies. Previously entrenched local markets can come under attack from global competitors. South Africa is well positioned to resist this threat and seize the global imperative in selected areas by focusing on its core strengths.

To develop a strong indigenous ICT Sector, government and other stakeholders have recognised the need for a coherent national ICT sector strategy Development Framework that leverages South Africa’s strengths and ensures the involvement of the wider population in the development of a thriving ICT Sector. The greatest implementation challenge will be to ensure job creation, reskilling of retrenched workers, economic growth, social upliftment and empowerment through a broad range of economically sustainable activities and projects.

Implementation will require a high degree of collaboration between governments, business, academia, labour, and civil society as well as substantial involvement at the community level. In this regard, the strategies provide a framework for:

• Identifies Identifying opportunities, including competitive niche markets for South African ICT companies;
• Assisting in the development of government policies for industrial development;
• Providing a focus for national research and educational institutions involved in the development of the ICT Sector; and
• Providing a means for job creation, reskilling of workers, sustainable economic growth, social upliftment and empowerment.

The ICT Sector strategy Development Framework for South Africa was developed in the context of the evolution of the international ICT sector. A rapidly changing global ICT Sector adds a dimension of risk to the implementation of this framework strategy, as does the accelerated pace of political, social and economic restructuring currently taking place in South Africa. These factors were considered for their relevance and appropriateness to the South African context to help ensure the strategy’s framework’s sustainability for future generations.

How the Strategy Framework came about

In 1994, with the first democratic order being elected, South Africa entered a period of transition, dismantling structures established in the Apartheid era and replacing these with processes to empower and enfranchise all of the country’s people. The South African Government’s strategy for transformation is contained in the Growth, Employment and Redistribution (GEAR) program, formerly known as the Reconstruction and Development Programme (RDP). The greatest challenge is to ensure sustainable economic growth, social upliftment and empowerment.

The South African Information Technology Industry Strategy (SAITIS) project was conceived in 1995 in this new era of change by Jay Naidoo, Minister of Posts and Telecommunications at that time (and later Minister of Communications), and sponsored by Thabo Mbeki, then Deputy President (now President). An important goal in conceptualising the project was to bridge the global development gap and develop a robust, growing and sustainable South African ICT Sector that directly supports, and contributes to, the GEAR challenge of sustainable economic growth, social upliftment and empowerment.

Initial stakeholder meetings were conducted regarding the SAITIS project. These resulted in the nomination of a group of 37 stakeholders as an Advisory Group to the SAITIS Project. The group of 37 represented key organisations and agencies with interests in the ICT Sector in South Africa. The outcome of these deliberations was a Project Design Document (PDD) to guide the direction of the project and the establishment of a Project Steering Committee (PSC).

The Government of South Africa was supported in the development of the PDD and subsequently in the development of the ICT Sector strategy Development Framework by the Canadian International Development Agency (CIDA), under its Country Development program for South Africa.

Contributors to the Strategy Framework development

South Africa has entered a new democratic phase where participation and building consensus are important components of transformation. The SAITIS project recognised the importance of a broad range of stakeholder inputs and consequently the processes developed for strategy formulation and implementation ensured that the key representatives from significant constituencies had an opportunity to provide input. This resulted in "made in South Africa" strategies for South Africans.

It is essential to recognise the contribution of key stakeholder groups such as government, industry, labour, academia and civil society in the development of this strategy framework. During the strategy framework development process, more than 600close to one thousand representatives of these stakeholder groups took an active role in the development of the strategy framework through a series of Working Groups, Workshops and Forums. Appendix A G provides a list of people who participated in the strategy framework development process.

The Project Steering Committee (PSC) was instrumental in providing broad direction to the SAITIS project and strategy framework development. It comprised nine members, including CIDA. The Advisory Group, instrumental in project initiation, continued to provide project input through the PSC.

South African Government involvement and contribution have also been important. The two key government departments represented on the Project Steering Committee (PSC) were the Department of Communications (DoC), currently under Minister Ivy Matsepe-Casaburri, and the Department of Trade and Industry (DTI), under Minister Alec Erwin. The DTI was appointed as the lead counterpart agency to CIDA for the SAITIS Project. The DTI representative on the PSC, the late Ian Grant, Director: Electrical, Electronic and Allied Industries, chaired the PSC. In addition, the DTI contributed to the funding of strategy the framework development through the provision of services, office space and local travel throughout the life of the project.

Securing coherent involvement and participation of companies comprising the ICT Sector was also crucial to the creation of this strategy framework. Industry associations played a pivotal role in this regard. Of particular significance was the creation and participation of the Information Industry Association of South Africa (IISA), an umbrella association representing ICT Sector participants.

Labour commitment and involvement were secured by Congress of South African Trade Unions (COSATU) and National Union of Mineworkers of South Africa (NUMSA) representation. This significantly helped to mobilise support and interest from a range of labour organisations and helped ensure that critical aspects of employment and empowerment were central themes throughout the process.

Engaging key members in Academia - including the broader education community (Universities, Technikons and the Department of Education) - ensured that primary, secondary and tertiary ICT education requirements of the sector were factored into the strategy framework.

Price water house Coopers LLP was contracted by CIDA to manage the development of the project and staff the project team. This team consisted of both South African and Canadian participants. The project team provided project management, project facilitation, local research on the ICT Sector and an international ICT perspective. Various South African firms were sub-contracted to support the development of the framework.

A number of Canadian organisations supported the SAITIS Project Team. These included Statistics Canada, Software Human Resource Council (SHRC), and the International Development Research Centre (IDRC). All provided valuable contributions.

A key resources used in the development of this the strategy framework consisted of the Baseline Studies, developed under separate contract by CIDA to the IDRC office in South Africa, which provided the status of the South African ICT Sector as a whole, including a jobs and skills component. Other resources used were the Department of Communications info.com 2025 program, the National Research and Technology Foresight Project sponsored by the South African Department of Arts, Culture, Sciences, Culture and Technology (DACST), and the Growth, Employment and Redistribution (GEAR) program report.

How the Strategy Framework was developed

The strategy framework was developed in a top-down and bottom-up manner using the following strategy development framework strategy development process (Figure 1.1):

Figure 1.1: Strategy Development Process

A key steps in the process was completing a Situation Analysis of the current situation with regard to the ICT Sector in South Africa, including the international context in which it operates. This was a bottom-up process involving a series of Working Groups created to identify issues and opportunities pertaining to discrete aspects of ICT in South Africa.

The four Working Groups created for this purpose were:

• ICT Industry Working Group;
• ICT Usage Working Group;
• Human Resources Working Group; and
• Innovation Working Group.

A separate Indicators Working Group was established and charged with considering potential tangible objectives of the strategiesy and issues regarding measurement of progress against the project’s objectives.

The issues raised and discussed by the Working Groups were summarised according to the categories listed under each Working Group in Figure 1.1 above.the preceding diagram. Neville: Need to make the subpoints in diagram above the same as the summary of issues

In addition to the Working Groups, a series of theme workshops and Executive Forums were conducted, also with the purpose of identifying issues and opportunities. The issues raised by these activities were referred to the appropriate Working Group to be summarised.

The specific SAITIS theme workshops conducted were:

• Capital Mobilisation;
• Infrastructure;
• International Markets;
• Women in ICT;
• Small, Medium and Micro Enterprises (SMMEs);
• Management Skills; and
• Provincial workshops.

Other sources of issues/opportunities for the Situation Analysis were the Baseline Studies, the Kimberley Workshop conducted by the Department of Trade and Industry and the Executive Forums comprisinged of government, business, labour and academia representatives.

A complete list of the issues and opportunities raised by Working Groups, SAITIS Workshops, Executive Forums, Baseline Studies, and the DTI Kimberley Workshops, and Provincial Workshops is presented in Appendix DE.

In parallel with the Situation Analysis, an initial framework was developed from the top-down using the Project Design Document as a starting point. The purpose of the initial framework Strategy Outline was to provide overall guidance to the framework Strategy development activities.

Another step in the process was to identify potential strategic directions that addressed the issues raised in the Situation Analysis and satisfied the overall intent of the strategy framework as articulated in the Project Design Document (and subsequently captured in an Strategy initial framework outline). A Strategy Development Forum that included both the Project Steering Committee and the Working Group chairs as well as interested observers completed the process of rationalising the bottom-up and top-down approaches, resulting in the ICT sector ICT Sector strategy Development Framework articulated in this document. The strategy was subsequently ratified by an Executive Congress convened from representatives of all major stakeholder groupings.