ICT and electronics in South Africa
The South African information and communication technologies (ICT) sector is well
established and sophisticated.
The largest and most advanced in Africa, the local IT industry is characterised by
technology leadership, particularly in the field of mobile software and electronic
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.
It’s a buoyant sector, with IT spending in 2010 reaching $10,6-billion, according to the
South African Electrotechnical Export Council (SAEEC). Together with
telecommunications, it generates an estimated $29-billion in revenues, R10.3-billion
of which comes from IT.
South African software developers are recognised for their innovation, production and
cost efficiency – and are backed by sturdy local infrastructure, as well as government
support. For example, the government amended the Income Tax Act in efforts to
stimulate local innovation and create jobs: software developers can now claim back
150% of research and development (R&D) expenses against tax. There are around 1
000 software development firms in South Africa.
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.
Financial assistance is also available from the Industrial Development Corporation,
which aims to promote technology development. The Support Programme for
Industrial Innovation (SPII) supports companies engaged in the development of
innovative or creative products, for example.
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.
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. In
2010/11, Gartner, the international research group, ranked South Africa within the
global top 30 software development outsourcing destinations.
South Africa is a favoured international location for business process outsourcing.
Investment opportunities lie in the roll-out of wireless networks and technologies, and
in the local assembly of green-energy technologies for electronic components and
Other opportunities include the development of access-control systems and security
equipment, automotive electronic subsystems, systems and software development in
the banking and financial
services sector, silicon processing for fibre optics, integrated
circuits and solar cells. There are also significant opportunities for the export of
hardware and associated services, as well as software and peripherals.
Export growth and internationalisation of South African companies is supported by the
Department of Trade and Industry via the Electrotechnical Export Council (SAEEC)
Communications and mobile
Much of the excitement in South Africa’s electronics sector centres around
communications – which, together with transport and storage, accounts for around
10% of GDP. The communicaitons sector has been one of the fastest growing of the
South African economy, reflecting the rapid expansion of mobile telephony across the
Reviewed: 7 January 2013
SAinfo reporter, incorporating material from the South African Yearbook