Key sectors

ICT and electronics in South Africa

The leader of information and communication technology (ICT) development in Africa, South Africa is the 20th largest consumer of IT products and services in the world.

As an increasingly important contributor to South Africa's gross domestic product (GDP), the country's ICT and electronics sector is both sophisticated and developing.

Telecoms

 With a network that is 99.9% digital and includes the latest in wireless and satellite communication, the country has the most developed telecoms network in Africa.

South Africa's IT industry is characterised by technology leadership, particularly in the field of electronic banking services. South African companies are world leaders in pre-payment, revenue management and fraud prevention systems, and in the manufacture of set-top boxes, all exported successfully to the rest of the world.

Several international corporates, recognised as leaders in the IT sector, operate subsidiaries from South Africa, including IBM, Unisys, Microsoft, Intel, Systems Application Protocol (SAP), Dell, Novell and Compaq.

Electronics industry revenues in South Africa 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.

A highly competitive consumer electronics market producing high value-added electronic products also plays an important role.

Competitive advantages

South Africa's ICT and electronics sectors are expected to continue showing strong growth in the future, due to key competitive advantages specific to the country and the continent.

Testing and piloting systems and applications are growing businesses in South Africa, with the diversity of the local market, first world know-how in business and a developing country environment making it an ideal test lab for new innovations.

Gartner, the international research group, rates South Africa as one of its top 30 software development outsourcing destinations, with 2007 research putting it on par with Israel in the Europe, Middle East and Africa region, and next to Australia and India globally.

Outsourcing to South Africa

 South Africa is well placed to become a favoured international location for business process outsourcing.

South Africa has also established itself as a quality, low-cost call centre destination. The country is host to call centres for AOL, UK retailer Asda, Virgin Mobile UK, Samsung's European digital camera division and others.

And new legislation, such as the Telecommunications Amendment Act of 2001, has opened up communications in South Africa, prompting international telecoms operators such as Virgin Mobile to launch their products in the country.

South Africa's ICT products and services industry is also penetrating the fast-growing African market. South African companies and locally based subsidiaries of international companies have supplied most of the new fixed and wireless telecoms networks that have been established across the continent in recent years.

A significant retarding factor has been the high cost of bandwidth in Africa. However, the government has committed to addressing this, and major projects are under way to lay submarine fibre-optic cables along both the east and west coasts of Africa to boost the continent's connection with the rest of the world.

Technology incubation, research, training

Innovation Hub
South Africa's Innovation Hub, established in Pretoria in 2002, is Africa's first internationally accredited science and technology park.

A project of Blue IQ, Gauteng province's hi-tech industrial promotion agency, the complex brings together high-tech industry, academia and entrepreneurs to improve South African technology and productivity.

Taking its benchmark from the best such developments in the world, the creativity-driven centre houses technology-related businesses across a range of disciplines, including ICT, electronics, bio-science, and advanced manufacturing sectors such as defence spin-off and automotive manufacturing.

It also runs a business incubator programme that has given life to projects ranging from password management solutions and electronic voucher vending systems to micro-processor prosthetic knees.

The Hub is the site of Sappi's Technology Centre, Bigen's future head office, the Department of Trade and Industry's Aerospace Industry Support Initiative, and Lejara Enterprise Solutions, an SAP implementation partner and business intelligence specialist.

Meraka Institute
South Africa's ICT industry is also supported by the African Advanced Institute for Information and Communication Technology, also known as the Meraka Institute. Set up as a strategic government initiative, the institute promotes ICT skills development, research and innovation, as well as the adoption of free/libre and open source software (FLOSS).

Joburg Centre for Software Engineering
Another partnership between industry, academia and the government is the Johannesburg Centre for Software Engineering. The centre aims to grow South Africa's capacity to deliver world-class software, strengthen the local software development industry, and promote best practice in software development within an African context.

Universal Service and Access Agency
And the statutory Universal Service and Access Agency of South Africa, launched in 1997, has been working together with service providers and non-governmental organisations to set up centres across the country where disadvantaged communities can access ICT services and skills training.

Article last updated: May 2008

SAinfo reporter. Sources:

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