Looking beyond SA’s ICT ranking
"While this would seem a cause for concern, it is worthwhile to revisit the criteria used to determine these rankings in the broader context of ICT based on the reality of our situation. We should possibly be giving greater weight to the growth and use of mobile technology," says Keith Fairhurst, director of EOH Consulting.
Since its launch in 2001, the Global Information Technology Report has been used as a benchmarking tool to determine ICT strengths and weaknesses of countries around the world. It has additionally been used to evaluate progress in respect of ICT. Fairhurst explains that the report uses the Networked Readiness Index (NRI) to measure the degree of preparation of a nation or community to participate in and benefit from ICT development.
"The NRI comprises three different indices which assess the environment for ICT offered by the country or community, the readiness of the community’s key stakeholders, such as individuals, business and government, and the usage of ICT among these stakeholders," says Fairhurst.
Not illiterate
Fairhurst argues that, as a country, South Africans are not technology-illiterate. He bases this view on our rapid adoption of cellular technology, a trend that spans the entire population, irrespective of their belonging to the first, second or third economy.
Fairhurst says with a cellphone industry worth in excess of R54bn, SA has proved itself a ready and willing market for anything and everything mobile, clearly demonstrated by approximately 20m of the country’s 43m strong population having their own cellphone.
"In stark contrast to these figures, there are only about seven million installed PCs and laptops in SA. This is because traditional ICT is out of reach of the general population for a number of reasons. High connectivity costs, proportionally low fixed-line connectivity and expensive end-user products all prohibit your average man on the street’s exposure to, and use of, ICT in the context of PCs and laptops," says Fairhurst.
He says these barriers no longer exist in the cellphone market, "You also need to look at PCs versus cellphones in the context of the social problems and barriers that many of our communities face on a daily basis. Access to fixed-line computing is largely limited to major metropolitan areas and has relatively high set-up costs," says Fairhurst.
Fairhurst believes the current trends will persist when it comes to traditional ICT. "While ICT will definitely continue its pattern of growth in SA over the next five to ten years, we can expect it to remain heavily concentrated in specific geographical areas in terms of investment and usage," he notes.
He says we can expect more convergence of technology and adoption of this technology with regards to connectivity, and as a result of this growth we will see increased pressure to reduce the cost of connectivity and to make this more affordable.
As for the relationship between mobile use and ICT, Fairhurst explains that, in the local context, mobile phones are paving the way for future PC and laptop users, by exposing them to this type of technology. He says the step-by-step features on cell phones, for example, are mirrored in most PC software programmes. "This makes PC use less daunting for a non-user who has been exposed to mobile technology than for someone who has not," he adds.
"Despite SA falling ten places in the ICT rankings this year, we have much to look forward to in this space, based on our overwhelming reception to mobile technology. It would only seem to be a matter of time before more and more South Africans are welcomed into the extended ICT world of PC," says Fairhurst.
"One must appreciate the real value of the information in the report, did we drop ten places because we failed in some way, or was it merely that some other countries were more successful than us? Changes in ICT do not take place overnight, it is quite possible that we may slow a little in this year and pick up again next year. For example the impact of Neotel will not be felt until 2008, nor will the investment being made in preparation for 2010, which will start to come on stream in 2009, both in internal infrastructure and in international links," says Adrian Schofield, head of consulting at Forgeahead.
Competitiveness
Schofield says regardless of whether SA considers herself a ’development state’, it is vital for the socio-economic growth of the country that we improve our competitiveness in the world marketplace. "Inherently, competition (whether we like it or not) means outstripping the pace at which our fellow global citizens attract and make use of enabling investment. It is absolutely beyond debate that effective application of ICT infrastructure is a key contributor to success in this race," he notes.
"Although the SA government has always expressed the best intentions and aimed for the ideal objectives in its strategy around the ICT sector, the implementation of policy through legislation and regulation has frequently hampered progress towards realising the benefits," says Schofield.
Schofield says that what should have been a process of facilitation and deregulation, encouraging investment and competition, has turned into a laborious controlling process, extending the era of monopolistic attitudes and high prices. He says it is this factor, more than any other, which may be impeding our growth.
"Rather than looking at 47th place, let us compare ourselves with Tunisia (the only African country ahead of us), which has the benefit of being close to its customers in Europe, and see what we have to do to catch up with it. Let us also see where we stand in comparison to the economies with which we have growing ties, like India, Brazil and China, of which only India is marginally ahead of us. Comparisons using only one facet of the complex model that makes up a nation’s relationship with others can lead to simplistic conclusions," says Schofield.
Impediment
"The announcement that submarine fibre cables wanting to land in SA will have to be majority South African-owned, caused a huge growth impediment. This meant that multi-national cable systems would not be able to land in SA, regardless of their ability to introduce competition for international bandwidth to benefit the local economy and drives prices down," says Arthur Goldstuck, MD at World Wide Worx.
"This decline is applicable to the most part of sub-Saharan Africa, although there has been better penetration in this region into the ICT industry. The rest of the world, in particular certain Asian and Pacific countries, has simply outperformed the sub-Saharan countries," says Heine Greyling, research analyst: servers and storage, at IDC SA
Greyling says in order to move up in the rankings, spending on ICT infrastructure has to increase significantly. He says on a positive note, local businesses and the government have realised the need to invest even further in ICT. "In the future we should see some improvement in these rankings," says Greyling.
On a positive note, experts says the country’s IT industry is characterised by technology leadership, particularly in the field of electronic banking services, and electronics industry revenues in SA are growing at levels well above the overall GDP growth rate. Key players in industrial, power, defence and telecoms electronics include Siemens, Alcatel, Ericsson, Altech, Grintek, Spescom, Tellumat and Marconi.
SA’s ICT and electronics sectors are expected to continue to show strong growth, because of key competitive advantages specific to the country and the continent.
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