1. 1 Presentation to African Development Forum Addis Ababa, Ethiopia 25 - 29 October 1999 Tina James International Development Research Centre SOUTH AFRICAN IT INDUSTRY STRATEGY (SAITIS) BASELINE STUDIES

2. 2 SAITIS PROJECT  Funded by Canadian International Development Agency (CIDA)  CAD $ 3,5 million over three years  Baseline studies funded by CIDA, with additional support from the Canadian International Development Research Centre (IDRC)

3. 3 BACKGROUND - ICT INITIATIVES  Foresight : 15 - 20 year forecast for ICTs in South Africa  e-commerce policy 1999 - 2000  National Qualifications Framework creation of ICT sector education and training authority - SETA  State IT Agency  Donor-related activities e.g. Acacia, ICT-Scan  South African IT Industry Strategy

4. 4 SAITIS BASELINE STUDIES  Two major components:  Overview of the IT Industry  Overview of ICT-related Jobs and Skills  Also addresses:  issues and challenges  future requirements for an ICT strategy  recommendations and actions  stimulate debate in SAITIS Working Groups  Website available by end of 1999

5. 5 METHODOLOGY  SAITIS Baseline studies: Methodology based on: –about 40 Interviews –4 discussion Groups (8 - 12 per group) –review of secondary sources –mailscan (about 3 500 sent) –feedback to SAITIS Working Groups

6. 6 Industry Strategy Where are we now? (Situation Analysis ) Where do we want to be? (Goals & Objectives Framework ) How will we get there? (Strategy Development ) What are we going to do it with? (Tactical Plans ) Internal Situation External Factors Implementation Planning Vision Goals & Objectives Strategic Thrusts Strategies Risk Assessment Economic Model Issues STRATEGY DEVELOPMENT METHODOLOGY Constraints

7. 7 SOUTH AFRICAN POPULATION DISTRIBUTION BY AGE AND GENDER

8. 8 SOUTH AFRICAN DEMOGRAPHICS  Population size:About 41 million  Urbanisation:54%  Literacy rate: 61,4%  46% of population live on or below subsistence level  One of the highest GINI coefficients  AIDS-related deaths in 1999: 400 000 per year expected 800 000 - 1 million per year infection rates in excess of 23%

9. 9 Some Characteristics of the South African ICT Sector Dynamic Users of Technology - not Innovators Distribution Oriented Large Number of early adaptors - GSM and Internet Telecomms Liberalisation started - pace will increase Effective Control by Few Players

10. 10 IT Industry Spend (US $ 000s) 199219931994199519961997 IT Hardware IT Software IT Services Office Equipment Internal Telecomms TOTAL IT Spend 122713211558152516311717 287330386456633669 876938110099712021472 131138170158148155 121212951328144614851526 266628473023406841854149 640068697564864992839690

11. 11 Forecast Growth in Overall SA IT Vendor Revenues 1985 - 2002 (1 US$ = 6 SA Rand)

12. 12 Number of South African Households with Internet Access 19961997199819992000200120022003 % Households with Internet access in the home 0.5% 1.8% 4.1% 6.0% 7.4% 8.2% 9.2%10.5%

13. 13 Why an IT Jobs and Skills Survey?  Data required on: Jobs available and planned for –IT industry (hardware, software, etc) –IT users (NGOs, associations, govt) Current trends in supply/demand Income levels Emigration / immigration statistics Brain drain Jobs profile –part-time / contract / full-time –turnover rate –average length of service

14. 14 Why an IT Jobs and Skills Survey?  Data required on: Current skills levels Future skills requirements Training time IT training spend Labour Intensivity Unionisation Pipeline of potential skills  Little available at the detail required for SAITIS Baseline Studies

15. 15 FRAMEWORK FOR JOBS / SKILLS SCAN  Based on IT NATIONAL QUALIFICATIONS FRAMEWORK DOMAINS:  Information Systems and Technology Management  Systems Development  End-user computing  Data communications and networking  Computer operations  Hardware and computer architecture  IT education, training and development  IT sales and marketing, Other

16. 16 MAILSCAN  Data analysed:  Employees by race / gender  Temporary / permanent employees  Vacancies / Terminations  Employment in 5 years time - forecasts  IT Training spend  Outsourcing  Social responsibility  R&D, etc.

17. 17 Employment of Professionals 1998 - 2003

18. 18 CURRENT AND FORECAST GROWTH - ENGINEERS

19. 19 CURRENT AND FORECAST GROWTH - IT PROFESSIONALS

20. 20 MIGRATION FIGURES - 1997  OccupationEmigrationImmigrationNet Migration  Engineers42899-329  Medical Practitioners7345 -28  Medical Specialists26 4 -22  Dental Professions58 2 -56  Education & Related353125-228  Accountant & related277 27-250  Other962305-657  Managerial885357-528  Artisans371111-260

21. 21 SUPPLY / DEMAND TRENDS  < four years in service  IT imported skills too expensive; short-term contracts  Business services subsector is fastest growing - 32% growth over five years  Banking sector - 50% growth 1998 - 2003  Demand for all IT professionals - 50% growth  Need for experienced staff at senior level  Combination of business/ technical skills required  Oversupply in some areas e.g. MCSE

22. 22 HR STRATEGIES in the IT INDUSTRY  Salary structuring  Name your price ==> huge salaries  Innovative package structuring

23. 23 HR STRATEGIES in the IT INDUSTRY  Retention strategies  Cross-skilling  Increased emphasis on training  Career planning  Internal promotions  Working environment  flexibility / working at home / prestige / holiday leave / promotion potential / share options  challenge of the job is important

24. 24 EMERGING THEMES DEVELOP APPROPRIATE SKILLS BASE LIBERALISATION OF TELECOMMS INDUSTRY DEVELOP STRONGER ENTREPRENEURIAL BASE

25. 25 FOUR CLUSTERS

26. 26 GENERAL ISSUES v Need for a national strategic vision vno national objectives vlack of coordination veducation and training must be part of the national IT strategy (not separate initiative) v Indicators are problematic vCannot read the changing character of the IT industry vDifficult to assess current status in a meaningful way vComparing apples with pears - inconsistent v No coordinated effort (yet) to streamline activities relating to HR measurement

27. 27 HUMAN RESOURCE DEVELOPMENT  Education and Training all levels (primary / secondary / tertiary) coordinated pipeline of skills development stronger government/ private sector /educational linkages create IT apprenticeships /proposed learnerships private sector to develop mentoring schemes vendors to play a stronger role in training government to play a more prominent role model in IT adoption and usage short-circuit training to alleviate short-term needs multi-skilling to be encouraged

28. 28 HUMAN RESOURCE DEVELOPMENT  Brain drain  Worldwide phenomenon - SA no exception  Official figures about 35+% of actual (233,609 compared to 82,811)  Need to develop different strategies: Recruit IT staff from other counries Use ex-South Africans or those still working outside SA –SANSA initiative ?

29. 29 CREATING AN INFORMATION SOCIETY IN SA  Universal access  Increase pool of IT-literate South Africans  Creating general IT awareness  Massive IT awareness campaign  “Working for Water” model ===> “Working for Information “ programme  Promotion of IT-literacy: promotion on TV soaps,. etc