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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 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.

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.

Innovation

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.

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.

Opportunity

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.

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 subassemblies.

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 country.

• Read more about South Africa's telecommunications sector

Reviewed: 7 January 2013

SAinfo reporter, incorporating material from the South African Yearbook