Republic of South Africa R.S.A Country IT Assessment IB8710 D. Truex Kyai Mullei.
Transcript of Republic of South Africa R.S.A Country IT Assessment IB8710 D. Truex Kyai Mullei.
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Republic of South AfricaR.S.A
Country IT AssessmentIB8710 D. Truex
Kyai Mullei
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MNC that specializes hardware and software components considers opening a manufacturing plant in Africa. The corporation has a two-pronged strategy of tapping both domestic and export markets.
Scenario: Q & A session with shareholders and new-market researchers
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“Why Sub-Saharan Africa and why South Africa? Aren’t countries like Morocco, Egypt and Algeria and Tunisia larger economies and much closer to traditional markets like the E.U. and the U.S?”
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Statistics for 2003 R.S.A North Africa
Classification Low/middle income Low/middle income
GDP ($) 160 billion 216 billion
Industry/services as % of GDP
95% ($152 bn) 80% ($172 bn)
Tele density/ telephone costs to U.S. (3 mins)
41.5%
$0.20
25%
$.10
High Tech exports as % of GDP
5% (7.6 bn) 4% (8.64 bn)
FDI (foreign direct investment $)
$819 million $4.1 billion *
Aircraft Departures 146,000 138,000
Http://devdata.worldbank.org/external/
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“We know parts of Africa are politically volatile and this has an effect on their immediate neighbors. What are the risks
associated with our investment in South Africa?”
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Zimbabwe (25 year old multiparty democracy-stable)
Lesotho (new constitutional monarchy – SA military intervention in 1998 helped restore civilian rule)
Angola (new multiparty democracy – stable, historical involvement of SA military in civil war, no disputes)
Botswana ( 40 year old multiparty democracy – stable)
Swaziland (30 year old monarchy – stable)
Mozambique (15 year old democracy – stable)
Namibia (15 year old democracy – stable, historical occupation by SA between WWI and 1988)
**All countries are members of Southern African Development Community (SADC) of which South Africa represents 65% of combined 226 billion dollar GDP
**Above countries combined military exp: $945 million South Africa : $2.6 billion (Nuclear Power, major tech grade weapons exporter)
map.africa-atlas.com/ pictures/physical-africa.jpg
http://www.iss.co.za/AF/RegOrg/unity_to_union/pdfs/sadc/risdp/c2.pdf
SOUTH AFRICA’S NEIGHBORShttp://www.cia.gov/cia/publications/factbook/
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“Give me some demographics. What are we working with? Literacy, income levels, economy, culture…? ”
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SOUTH AFRICAN DEMOGRAPHICS
Population- 42 million (life expectancy 45 years)- 72% Black, 13% White , 8% mixed, - Urbanization 56% *- HIV/AIDS 15% prevalence (15-49yrs)- Literacy English (86%)- unemployment 31% (high crime environment.)- population below poverty line 50%- Gini coefficient 0.77 (10% of population - controls 60% of the wealth)- GDP/capita $1390 (2002)- Hofstede MAS/ UAI (strong/ weak ) - Hofstede PDI / IND (medium/ strong)
http://www.sarpn.org.za/RegionalViews/southAfrica.phphttp://www.worldbank.org/cgi-bin/sendoff.cgi?page=%2Fdata%2Fcountrydata%2Fict%2Fzaf_ict.pdfhttp://www.cia.gov/cia/publications/factbook/geos/sf.htmlThe cultural relativity of organizational practices and theories, Gary Hosftede, Journal of International Business Studies, Fall 1983
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“Our investment will require a world class communications infrastructure to succeed. From personal experience, the infrastructure in most African countries is wanting. Is South Africa any different?
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SOUTH AFRICA COMMUNICATION INFRASTRUCTURE
Statistics
- mainlines 4.8 million/ cellular 18.6 million- internet code (.za)- internet accounts 3.5 million* (27% users
in Africa)
- internet penetration 7.3% (1.5 % in Africa)
- internet use (growth) 2000-2005 46% (198% in Africa)
- medium level in digital access index (0.45) – sub Saharan Africa average (0.15)
- 350,000 wired computers in education (2001)
- 288,000 Internet Hosts- 2 submarine cables*, 3 Earth Satellite Stations
www.kodiak.org/
http://www.worldbank.org/
http://www.internetworldstats.com/stats1.htm
http://www.cia.gov/cia/publications/factbook/geos/sf.html#Comm
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SOUTH AFRICA COMMUNICATION INFRASTRUCTURE
Statistics
- mainlines 4.8 million/ cellular 18.6 million- internet code (.za)- internet accounts 3.5 million*- internet penetration 7.3%- internet use (growth) 2000-2005 46%- medium level in digital access index (0.45) – sub Saharan Africa average (0.15)- 350,000 wired computers in education
(2001)- broadband accessibility 3.7 out of 7 World Bank index- Only Sub Saharan country with 3G service- 521 secure servers
www.dttuk.co.uk/images/ computer-cables-big.jpg
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“What is the government commitment to the IT industry ? Will we be operating in an environment that protects our copyrights?
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GOVERNMENT ICT POLICY / SUPPORT
-$11 billion spent on ICT expenditures in 2001
- 10% of GDP spent on ICT ($264/capita)
- Corporate Income tax reduced by 29% (2005 Budget)
-BASED ON WORLD BANK INDEX 0-7
- Govt. online services availability 3.6 out of 7
- Laws relating to IT use 4.0 out of 7
- Govt. prioritization of ICT 4.5 out of 7
http://www.treasury.gov.za/documents/budget/2005/guide.pdf
http://www.worldbank.org/
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“What type of companies are located there that would benefit from our products? Can the domestic economy
sustain demand for high tech products?
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• Johannesburg Stock Exchange (top 10 in the world market cap $120 billion 2002)
• South Africa an exporter of hardware/ software ( 6% of GDP)• Linked with London Stock Exchange and 19 other exchanges in Africa• High Tech presence in SA
– NEC South Africa– IBM South Africa– Mecer (domestic)– Sahara Computers (domestic)– Pfisterer Group (domestic)– Siemens South Africa– Cisco South Africa
SOUTH AFRICAN ECONOMY
http://www.anc.org.za/ancdocs/history/mbeki/2002/tm0517.htmlhttp://www.ha.co.za/CompanyProfile.aspxwww.mecerpc.co.za/ www.nec.co.za/
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QUESTIONS?