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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

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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)

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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

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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

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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

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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 FactorsImplementation Planning

• Vision• Goals & Objectives• Strategic Thrusts• Strategies• Risk Assessment• Economic Model

Issues

STRATEGY DEVELOPMENTMETHODOLOGY

Constraints

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SOUTH AFRICAN POPULATION DISTRIBUTION BY AGE AND GENDER

-6000 -4000 -2000 0 2000 4000 6000

0 to 9

10 to 19

20 to 29

30 to 39

40 to 49

50 to 59

60 to 69

70+

Females Males

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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%

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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

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IT Industry Spend (US $ 000s)

1992 1993 1994 1995 1996 1997

IT Hardware

IT Software

IT Services

Office Equipment

Internal

Telecomms

TOTAL IT Spend

1227 1321 1558 1525 1631 1717

287 330 386 456 633 669

876 938 1100 997 1202 1472

131 138 170 158 148 155

1212 1295 1328 1446 1485 1526

2666 2847 3023 4068 4185 4149

6400 6869 7564 8649 9283 9690

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Forecast Growth in Overall SA IT Vendor Revenues 1985 - 2002

(1 US$ = 6 SA Rand)

0

5000

10000

15000

20000

25000

30000

35000

40000

4500085 87 89 91 93 95 97 99 1

IT Revenues

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Number of South African Households with Internet Access

1996 1997 1998 1999 2000 2001 2002 2003

% Households with Internet access in the

home

0.5% 1.8% 4.1% 6.0% 7.4% 8.2% 9.2% 10.5%

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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

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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

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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

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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.

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Employment of Professionals1998 - 2003

14604

72813

8393

6107

24690

16663

94761

616880

109094

14399

80526

8729

6595

28697

20190

125044

651584

121030

0 20000 40000 60000 80000 100000 120000 140000

Mining and Quarrying

Manufacturing

Electricity, Gas & WaterSupply

Construction

Trade

Transport &Communication

Finance

Services: Government

Services: Non-Government

2003

1998

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CURRENT AND FORECAST GROWTH - ENGINEERS

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

1998 2003

Electrical/ElectronicEngineerEngineeringTechnologistTelecommsTechnologistEngineeringTechnicianTelecomsTechnicianOther Engineers

OtherTechnologists

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CURRENT AND FORECAST GROWTH - IT PROFESSIONALS

0

100

200

300

400

500

600

700

1998 2003

ComputerProgrammersSystems Analyst

CommsTechnologistMultimedia Design

Network Design

Website Developer

Hardware support

Software support

Other

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MIGRATION FIGURES - 1997

Occupation Emigration Immigration Net Migration

Engineers 428 99 -329

Medical Practitioners 73 45 -28

Medical Specialists 26 4 -22

Dental Professions 58 2 -56

Education & Related 353 125 -228

Accountant & related 277 27 -250

Other 962 305 -657

Managerial 885 357 -528

Artisans 371 111 -260

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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

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HR STRATEGIES in the IT INDUSTRY

Salary structuring Name your price ==> huge salaries

Innovative package structuring

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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

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EMERGING THEMES

DEVELOP

APPROPRIATE

SKILLS

BASE

LIBERALISATION

OF

TELECOMMS

INDUSTRY

DEVELOP

STRONGER

ENTREPRENEURIAL

BASE

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FOUR CLUSTERS

ENABLINGENVIRONMENTCOMPETITIVENESS

ISSUES

CREATING A SAINFORMATION SOCIETY

HUMAN RESOURCEDEVELOPMENT

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GENERAL ISSUES

Need for a national strategic vision no national objectives lack of coordination education and training must be part of the national IT strategy

(not separate initiative)

Indicators are problematic Cannot read the changing character of the IT industry Difficult to assess current status in a meaningful way Comparing apples with pears - inconsistent

No coordinated effort (yet) to streamline activities relating to HR measurement

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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

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HUMAN RESOURCE DEVELOPMENT

Brain drainWorldwide 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• ?

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CREATING AN INFORMATION SOCIETY IN SA

Universal accessIncrease pool of IT-literate South Africans

Creating general IT awarenessMassive IT awareness campaign

“Working for Water” model ===> “Working for Information “ programme

Promotion of IT-literacy: promotion on TV soaps,. etc