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SMMEs as users and suppliers of information on ICT sector
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Corporation no. 2002/047290/23
4th Floor Campus Building
999 Hilda Street
Hatfield 0082
www.FeedbackRA.co.za
Small Enterprise as Users and Suppliers of Information on the ICT
Sector.
Submitted to
SEDA
Project Management Contact Details
Feedback Research and Analytics
Feedback Research and Analytics
999 Hilda Street, Hatfield 0083
Tel: +27 12 430-2009. Fax: +2712 3420931
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Table of contents
1. List of Abbreviations ............................................................................................. 5
2. Introduction ........................................................................................................... 8
2.1. Brief ............................................................................................................... 10
2.2. Purpose and objectives .................................................................................. 11
2.3. ICT SMME: A definitions............................................................................. 11
3. Methodology........................................................................................................ 12
3.1. Approach ....................................................................................................... 12
3.2. Ways in which sources were elicited............................................................. 13
4. ICT technologies used by small businesses......................................................... 14
4.1. Social and economic benefits of ICT ............................................................ 14
4.2. ICT and productivity ..................................................................................... 15
5. The Benefits of ICT to SMME’s ...................................................................... 16
6. Barriers and issues related to the use of ICT ............................................... 29
7. Defining the ICT Value Chain ............................................................................ 36
7.1. Primary Groups ............................................................................................. 37
7.2. Networked Interaction ................................................................................... 37
8. Activity & Opportunity within the ICT sector .................................................... 39
8.1. Performance Trends within the ICT Sector................................................... 39
8.2. SWOT analysis .............................................................................................. 45
8.2.1.1.1. Strengths .................................................................................. 46
8.3. ICT Spend in BRICS Countries 2000 – 05 ................................................... 48
9. NGOs and ICT for Development......................................................................... 49
10. Demographic of the sector................................................................................... 49
11. Future growth prospect of SMMEs within the ICT sector .................................. 49
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11.1. Policy environment................................................................................ 49
11.1.1. Provincial ICT Development planning.............................................. 49
11.2. Funding environment............................................................................. 50
11.3. Unexploited markets and under serviced areas ..................................... 50
12. Opportunities and challenges .............................................................................. 50
12.1. Opportunities ......................................................................................... 50
12.2. Challenges ............................................................................................. 51
13. Issues for Possible Further Exploration............................................................... 53
13.1. Trends Impacting the ICT Sector .......................................................... 53
14. Recommendations ............................................................................................... 53
14.1. Recommendations: ICT developments to benefit SMMEs ................... 53
14.2. Challenges and corrective measures...................................................... 56
14.2.1. Leveraging ICT enabling from business use ..................................... 56
14.2.2. Promoting the use of ICT to enable exports across all SMMEs........ 57
14.3. Potential support mechanisms that could be applied............................. 58
14.3.1. Enhancing `ICT enabling' through skills development ..................... 58
14.3.2. Liaison with industry ......................................................................... 59
14.3.3. Enhancing local ICT import competing firms ................................... 59
14.4. Opportunities and how they can be explored ........................................ 59
14.5. Specific interventions or quick gain strategies for SEDA..................... 61
15. Bibliography ........................................................................................................ 64
16. Annexure A: Annotated bibliography ................................................................. 68
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1. List of Abbreviations
ADSL Asymmetrical Digital Subscriber Line. ADSL is a form of DSL, a
data communications technology, that enables faster data
transmission over copper telephone lines than a conventional
modem can provide.
B/OSS Business Support Systems. The complementary term for “OSS”,
BSS is a newer term and typically refers to "business systems"
dealing with customers, supporting processes such as taking
orders, processing bills, and collecting payments. The two
systems together are often abbreviated BSS/OSS or simply
B/OSS.i
DSL Digital Subscriber Line. Generic name covering several different
technologies for data transmission over fixed phone lines.
EDI Electronic Data Interchange. A system for exchanging trading
information in standard form by computer systems through the
use of electronic messaging systems – for instance, examination
entries, personnel records and transactions between trading
partners.
EFT Electronic Funds Transfer. An electronic-based transactions for
instance Internet Banking transactions.
I/O Input/Ouput
ISD Internet Service Developer
ISP Internet Service Provider. An Internet service provider is a
business or organisation that sells to consumers or business
access to the internet and related services. -
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LAN Local Area Network. A communications system linking
computers within a restricted geographical area such as a
building or campus. This also allows computers to share
information from a central source.
OSS Operations Support Systems. The network systems" dealing
with the telecom network itself, supporting processes such as
maintaining network inventory, provisioning services, configuring
network components, and managing faults.
PC Personal Computer
PSTN The Public Switched Telephone Network (PSTN) is the
concentration of the world's public circuit-switched telephone
networks, in much the same way that the Internet is the
concentration of the world's public IP-based packet-switched
networks. Originally a network of fixed-line analog telephone
systems, the PSTN is now almost entirely digital, and now
includes mobile as well as fixed telephones.
SVC Scalable Video Coding. The objective of SVC is to offer content
in a "scalable" way; i.e. content can be coded once, and can then
offer streams of various quality.ii
TV Television
VAN Value Added Network Services. A term used to refer to other
alternative, telecommunications service providers, generally
known as VANS licensees, that provide telephony services to the
telecommunications market.
VPN Virtual Private Network. A service that links a company's local
and telecom networks with the computers and phones of
employees who work remotely, forming a telecom or data
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communications network that looks to users like a single
business network.
WAN Wide Area Network. In contrast to a local area network, which
links computers at the same site, a network which links
computers over a large geographical area, including
telecommunication links such as satellites.
iii
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2. Introduction
The African business graveyard is littered with corpses of small and medium scale businesses that would have survived if anyone took notice. Governments, bankers, policy makers, even the World Bank institutions all agree that small businesses are the engine of growth in any economy. The key to unlock this vast potential wealth of Africa and create sustainable prosperity is however missing. BusinessinAfrica, 1 March 2004 1
Small Micro and Medium Enterprises (SMMEs) are the backbone of a growing
economy. In the South African context, SMMEs operating in the Information and
Communication Technology sector are more than an engine for economic growth.
They are creators of jobs and play a key role in opening access to mainstream
economy by the marginalized parts of the population.
The Government of the Republic of South Africa, in recognition of the key role
played by SMMEs in the ICT sector in its broad development and poverty alleviation
strategy has sought to give these organizations a priority attention. It is cause for
concern that sector is far less than expected considering substantial amounts of
resources that have been invested in this sector in the last few years.
The South African SMME sector is, nonetheless, not as productive and as
competitive as it should be. For the most part, this is due to the fact SMMEs still use
old-fashioned technologies and most of them have no access to facilities for the
testing and promotion of innovative ideas. There is also very poor or no technology
support for SMMEs. As a result, there are very low entry rates of SMMEs into the
productive "value added" sectors and this leads to the high failure rate among start-
up SMMEs. As a result, there has been a focus and drive by government and other
stakeholders on Information and Communication Technologies (ICT) and the
creation of Small Medium and Macro Enterprises (SMMEs) to address the critical
1 http://www.businessinafrica.net/opinion/editorials/315011.htm
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underdevelopment. Consequently, there is an urgent to need to support SMMEs
through technology transfer and technology diffusion programmes.
ICTs revolutionalised the way in which societies interact, conduct business and
compete in the international market. Its potential impacts on the productivity and
competitiveness through cost and turnover reduction, increase in profitability and
ability to establish, advance customer relations, enhancing knowledge and
facilitating innovation of products and services, to name but a few, makes ICT
important to all types of enterprises including SMME’s (Wakelin & Schadrach, ed).
The differentiation of Duncombe and Heeks (2001, p.9) is applicable to the South
African micro and small business enterprises. The authors differentiate between
survivalist, thunddlers and flyer enterprises. Survivalist enterprises were pushed into
starting a business for the sake of obtaining an income to support a family – they
have no other source of income, although the income generated from the enterprise is
still typically below the poverty line. Thundlers typically have a static turnover and
have no motivation to expand or grow. The income provided by the enterprise is
sufficient to meet basic needs. Flyers are market driven enterprises focussed on
growth. The income generated by flyers meets more than basic needs.
The SMME sector in South Africa makes up 99,3% of all private enterprise in the
country (Coetzee, Denner, Eksteen, Eloff, Govender, Hirsch, Morwala and Van der
Merwe, ed). There are about 3 million micro enterprises in South Africa and more
than half of the employed are employed in some micro or small business in the
private sector (Dahl & Normark, 2004, p. 5). ICT holds numerous benefits for
SMMEs and more specifically SMME’s in developing and African countries such as
South Africa. Since the benefits may enable enterprise development and growth it
becomes especially important to explore its use in SMMEs in South Africa, where a
lot of development and investment have taken place in ICT infrastructure over the
past decade without congruent growth in SMMEs (Ndiwalana & Tusufira, 2006).
An estimated 20% of the countries total domestic income is derived from the
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informal sector (Dahl & Nordmark, 2001). 50% of small enterprise consists of
survivalist enterprises (Jackson, 2004).
Flyers generally have better access to and resources to make use of ICTs. As such,
they are in the position to reap more benefits from the investment of ICTs
(Duncombe & Heeks, 2001, p. 9). Flyers will potentially also use more advanced
ICTs such as Internet and e-mail and can more easily overcome user requirements
such as training and high entry and maintenance costs. However, given a survivalist
can gain access to ICT and gain the needed training to use it effectively, growth and
development of the enterprise is a given consequence.
2.1. Brief
In March 2007, Feedback Research and Analytics (Feedback) was commissioned by
the Small Enterprise Development Agency (SEDA) to conduct a desktop research
into “Small Enterprises as Users and Suppliers of Information on the Information
and Communication Technology (ICT). Sector.”
The research is undertaken in pursuance of SEDA’s mandate as prescribed in
Sections 9A and 10 (1) [a-d] of SEDA’s enabling legislation –National Small
Business Amendment Act no. 29 of 2004, whose objectives and functions are to:
(a) design and implement development support programmes (b) promote a service delivery network that increases the contribution
of small enterprises to the South African economy, and promotes economic growth, job creation and equity; and
(c) Generally, strengthen the capacity of: (i) service providers to support small enterprises and (ii) small enterprises to compete successfully domestically and internationally.
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2.2. Purpose and objectives
The overall purpose of the study is to assist SEDA to identify opportunities and
challenges of small businesses operating in the ICT sector in order that it can
develop appropriate support mechanism. The objectives of the study are:
♣ to identify current ICT technologies used by small business
♣ to identify future growth prospects of SMMEs within the ICT sector
♣ to identify capacity building needs of SMMEs within the ICT sector
♣ to increase the quantity, quality and accessibility of information on
currently active SMMEs operating in the sector
♣ to identify opportunities and challenges faced by SMMEs within the ICT
sector by province
2.3. ICT SMME: A definitions
Both terms – ICT and SMMEs are not easy to define, mostly due to lack of
consensus on any one definition. The Western Cape Provincial Government defines
ICT as “The industries that provide goods and services that support the electronic
Display, processing, storage and transmission of information.”2
In defining an ICT company, we have adopted the definitions developed by the
Organization for Economic Cooperation and Development (OECD) and Price
Waterhouse Coopers (PWC) as described in the Terms of Reference document. Key
words in the OECD definition are ‘processing, transmission and display’ of
information by electronic means. PWC goes further to develop a list of core
2 Naidoo, R. et al. 2004. . INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) FIRST PAPER:Research to inform Strategic Policy and Initiatives for the Information and Communication Technology Sector in the Western Cape. Cape Town South AFrica
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activities of an ICT company grouped in four categories -- bandwidth, hardware,
applications and enterprise management.
With regard to the definition of small, micro and medium –size enterprise, we are
fully cognizant of controversies and lack of consensus on definitions that are based
on number of employees, or total business assets. We have adopted SEDA’s own
definition as found on its website, to mean a ‘firm with up to 200 employees’. This
definition will be further defined in consultation with SEDA to take into account
firms that have less than 200 employees that are obviously not SMMEs, a
phenomenon that is not uncommon in the ICT sector where you find multi-billion
rand companies that were definitely not intended to fall within SEDA’s mandate.
3. Methodology
3.1. Approach
The methodology for this literature survey evolved in the following manner: The
first step was to pull together a four person team of consultants. Three senior
researchers and one junior researcher.
• Initial Brainstorming to decide on possible issues to discuss
o Current ICT technologies used by small businesses
o Identify Future growth prospect of SMMEs within the sector
o Capacity building Needs of SMMEs within the sector
o Ways to increase the quantity, quality and accessibility of information
on currently active SMMEs operating with the ICT sector
o Opportunities and challenges faced by SMMEs within the ICT sector
per province,.
• Initial Search for Sources,
• Development of detailed research questions
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• Develop Report Outline
• Literature review and analysis
• Additional Search for Sources
• Write up of Literature Review.
3.2. Ways in which sources were elicited
Sources were elicited by:
• Internet search using Google Scholar with the following key words
o SMME ICT
o “ICT Barriers” SMME Development”
o ICT SMME Development
• Calling well-known authors on the topic of ICT and SMMEs
Name Organization
David Barnard Sangonet
Racuni Naidoo Matchbozology Creative Incubator
Chalwyn Vorster Sustainable Development consulting
Seana Nkhahle South African Cities Network
Ceri Oliver-Evans Graduate School of Business, UCT
• Journal Articles
o Identified through the abovementioned internet search
o UP library search with keywords
o St. Augustine College library
o Wits Library
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• Books
o UP library search with keywords
o St. Augustine College library
o Wits Library
All relevant sources published in the past 7 years were included, and although the
focus was on research conducted in or about South Africa, a limited number of
significantly relevant international publications were also included in order to
provide a perspective on the lessons learnt in other developing and developed
countries around the world.
4. ICT technologies used by small businesses
4.1. Social and economic benefits of ICT
♣ Industry is the engine of growth, because its ability to extend markets,
increase productivity and generate technological innovation
♣ It is an instrument of social cohesion and inclusion as it connects people
over distances.
♣ It finds application in all the sectors of the economy. For example, the
following sectors of economy depend of ICT.3
Banking and insurance Manufacturing
Health care Other Financial services and real estate
Energy and utilities Retail and wholesale Trade
Agriculture, Forestry and Fishing Construction
3 Western Australia Information and Communications Technology Industry Development Forum.
2006. Enabling Growth: The contribution of ICT to West Australian Economy. Perth, Australia.
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Mining Education
Government – administration and service
delivery
Professional and other services
IT: Internet Transport
Telecommunications Broadcasting
Social enterprise and non-profit work
4.2. ICT and productivity
It common knowledge that there is a direct link between the ICT and improved
productivity. ICT is a great enabler of productivity. Studies undertaken in Australia4
provide abundant proof of this point.
Use of IT provides companies with an opportunity to:
♣ “undertake existing tasks more quickly, cheaply and effectively by substituting ICT for other inputs, especially labour; and
♣ to improve multifactor productivity (the efficiency and effectiveness of input use) by using ICT as a means to innovate - to develop and introduce new value-adding and efficiency-enhancing products, processes and organisational structures”5
Further the above-mentioned Australian study shows that investment in ICT can
affect labour productivity growth in two main ways.
• A capital deepening effect - (increasing the capital to labour ratio) raises labour productivity because on average, each unit of labour has more capital to work with in order to produce more output; and
4 Productivity Commission 2004, ICT Use and Productivity: A Synthesis from Studies of Australian Firms, Commission Research Paper, Canberra. p. 8. 55 Western Australia Information and Communications Technology Industry Development Forum. 2006. Enabling Growth: The contribution of ICT to West Australian Economy. Perth, Australia.
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• A multifactor productivity (MFP) effect - MFP growth reflects the combination of inputs so that more output is produced for any given quantity of input.
How ICT affects firm performance
Key area of impact Nature of impact
Labour Enhancement of human capital. Staff reduction in some instances, but not all.
Facilities and outsourcing Reduction of some facilities and outsourcing of certain functions, sometimes overseas.
Production and distribution processes
Greater consistency of product quality as well as quality enhancement. Process change across the spectrum from little change to major re-engineering of entire process.
Management practices More timely and accurate management of information. Greater centralisation of decision-making. Improved communications and reporting systems. Improved inventory control.
Product characteristics and mix
Development of customised products and services (for example, in banking and mining services).
Relationship with customers and suppliers
Better and more frequent communication with customers and suppliers. Greater responsiveness to customer needs and more certainty in new product design.
Source: Productivity Commission 2004, ICT Use and Productivity: A Synthesis from Studies of Australian Firms, Commission Research Paper, And Canberra. p. 4.
5. The Benefits of ICT to SMME’s
There are numerous specific benefits that SMMEs can reap from the use of ICTs that
can potentially increase enterprise competitiveness, productivity and management.
The specific benefits highlighted in literature include:
• Better marketing efforts
• Better internal and external communication
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• Better access to and use of more accurate information
• Better facilitation of administration
• Improved business processes
• Improved services
• Increased innovation
• Reduction of costs
• Positive impact on turnover
• Increased profitability
• Increased client growth
• Increased customer relationship
• Time efficiency
• Increased sales
• Potential to build human resources capital with less loss in productivity
In turn, the effects of these specific benefits, feed into increased competitiveness,
productivity and better management of SMMEs.
When ICT is used as a secondary processing technology in SMMEs it will benefit
them if it is used as a business communication tool. ICT can facilitate and enable
communication. In Uganda and Kenya, community organisations use ICT to
facilitate communications, especially if combining for example e-mail with
traditional community communication systems. ICT could also be used to establish
networks between community members and with the outside world (Dahl &
Nordmark, 2004). According to Dahl and Nordmark (2004) it is very important for
people in rural areas and in townships to be able to communicate with people outside
their own environment as it will possibly increase the accuracy of information.
The use of ICT as a method of internal and external communication is not limited to
flyers only, but includes survivalists as well (Duncombe & Heeks, 2001). In South
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Africa mostly all enterprise owners have access to mobile phones. It is used very
effectively for marketing and communication.
There is a great risk that information to poor entrepreneurs in informal settlements
and rural areas are inaccurate information as they rely mostly on informal
information systems from those around them and like them (Duncombe & Heeks,
2001). While it is essential to sales and appropriate to small enterprises to establish
such informal information systems, it is often of poor quality and is restrictive in its
range. In such instances, ICT can be a valuable tool for business communication.
In South African Townships, the most used informal system of information transfer
is the mouth to mouth method. Although this is a reliable way of information
exchange, the accuracy of the information may diminish as the transfer takes place
between more than two people that do not share the same location.
ICT is also a time efficient method of information transfer. To travel to the
source of information to obtain more accurate information may be quote expensive
and less time efficient. By implementing ICT, this problem of information accuracy,
time and costs can be reduced.
Fast effective communication via ICT, especially telephone, has become an essential
commodity to many informal SMEs in South Africa (Dahl & Nordmark, 2004).
Text messaging is for instance used as communication tool by street vendors as a
low cost communication tool. Other common ICT tools used for business
communication purposes in developing countries includes, landline telephones,
payphones and fax facilities are commonly used.
With ICT, marketing efforts can also be improved through the dissemination that
travels quicker and reaches more customers and potential customers. Marketing via
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ICT increase the potential client base of as it reaches more potential clients through
marketing efforts (Dahl & Nordmark, 2004).
By using ICT to market SMMEs customers can be made more aware of the channels
to do business. Price of services and important information can easily be
communicated to clients and potential clients in remote areas. Web-enabled online
activities allow local business enterprises to market their goods and services globally
and to generate interstate and international sales without incurring ‘brick and mortar’
expenses. This will increase also the global competitiveness of South African
SMME’s.
Tanburn and Singh (2001) mentions that the mobile phone has some many benefits
to SMEs in developing countries that even informal sector owners can use it to find
customers. She mentions the uptake of informal-sector owners in Asia that use it. It
is also used by SMEs in the informal sector in South Africa. Text messaging is for
instance a cost effective manner of marketing.
According to Dahl and Nordmark (2004) ICT is very useful to women entrepreneurs
in South African Townships since they want to market to potential customers outside
the Townships. Women entrepreneurs with small and micro enterprises have a need
to draw foreign customers, in which case ICT, specifically the Internet can be of use.
ICT can enable better and more frequent communication with customers and
suppliers. As such it also enables the development of closer customer relations. If
more frequent and quicker communication with clients can be established, the match
between demand and supply can be better which provides improved services to
customers.
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Enterprises function on the basis of four tangible resources, namely money, people,
materials and technology, and one intangible resource - information (Wakelin &
Schadrach, 2nd). Information with regard to supply, demand, the operating
environment and internal processes is crucial to the effective management of any
enterprise, for without quality information if it is properly interpreted and applied as
knowledge is a principal source of power within communities (Ndiwalana &
Tusubira, 2006, p. 1).
The lack of information is one of the non-financial aspects that constrain small
enterprise development (Jackson, 2004). Information poverty in small enterprises
results in wrong decisions as well as an inability to learn from such erroneous
decisions. This in turn results in the loss of valuable resources such as money, time,
income and business relationships (Wakelin & Schadrach, nd). Better informed
SMME’s will generally have enhanced prospects for emerging opportunities.
It is especially informal small and micro enterprises that stand a chance of being
effected by inaccurate information since they rely mostly on informal information
systems. As such, the risk exists that accurate information from outside the local
context may not reach them.
Rathgeber and Adera Ofwona (Dahl & Nordmark, 2004) cited that information is
known as the most important thing for a sustainable and equitable development.
Poor access to information and access to poor information by SME may lead to
incorrect strategic or tactical decisions, loss of potential income, and failure to learn
from past mistakes (Ndiwalana & Tusubira, 2006, p. 2).
Small enterprises in Africa are subjected to increased competition, as well as to
increased demands for quality of products and services. Surviving in this
competitive environment will require raising the overall productivity of small
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enterprises, which in turn will require higher levels of management capacity. In this
regard the ability to acquire, process and effectively use business information tools
becomes central (Duncombe & Heeks, 2001).
ICT can enable SMME’s to gain access to timely and quality information, and thus
empower them to take informed decisions in their business (Dahl & Nordmark,
2004; Wakelin & Schadrach, Ed). Where access to information is limited for many
people, as is the case for SMME’s in rural areas in Africa, ICTs such as the Internet
can facilitate access to information. For instance, Dahl and Nordmark (2004) found
that women entrepreneurs in townships in the Western Cape can benefit from the use
of Internet when searching for information. Market research can also be conducted
with more ease and efficiency through the use of ICT. As consequence, SMMEs that
use ICT for such purposes will have more comprehensive knowledge of their market.
Evidence suggests that business information is a critical demand for SMEs. Most
demanded information include those related to assistance with training and skills
development; sources of financial assistance; technology; and business support
services (such as registration, technology and book keeping) (Duncobe, 2006). ICT
is a driving force for enterprises’ capacities to access, adapt and apply information
and knowledge in their production and marketing, ICTs offer enormous
opportunities for transfer and acquisition of skills, technical knowledge and
business-related information (Wakelin & Schadrach, Ed).
Information with regard to customers and markets is another important benefit that
the ICT holds when it is used as a secondary processing technology. The internet
shows to have the greatest impact for accessing market information amongst flyers in
developing countries. Access of market information via the Internet is mostly used
by exporter/importers (including the tourist sector) (Duncombe & Heeks, 2001).
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Flyers usually have greater access to internet, fax and telecommunications
technology for information access than survivalists and thudllers (Duncombe &
Heeks, 2001). This can be an entry point for ICT development as well as an
opportunity for SMMEs in South Africa to provide such as service.
The use of ICT directly impacts SMMEs by improving the efficiency of business
processes and services (Duncombe & Heeks, 2001, p. 8). In a study conducted in
Western Australia (Western Australian ICT Industry Development Forum, 2006) it
was found that a lot of companies use ICT to improve customer services, offer
innovative products and to improve internal and external communication with
customers. In terms of increased innovation, ICT has the potential to enable SMEs
to develop new products and services, thereby establishing new business
opportunities and markets (Duncombe & Heeks, 2001, p. 6). In South Africa,
specifically in the Townships, ICT can be of great benefit to innovative services in
the tourism sector as Tourism is rapidly increasing in South Africa (Dahl &
Nordmark, 2004).
Overall the effective use of ICTs can facilitate better business administration. ICT
provide a data processing tool to SMME’s. Internal data processing, including
business accounts, payroll, invoicing and so forth is an important area for all SMEs,
particularly with regard to controlling enterprise finances and cash flow (Dahl &
Nordmark, 2004). The use of ICT can structure and organise business process better.
For instance, better operational and financial records improve business processes
(Ndiwalana & Tusubira, 2001). A lack of financial records is for instance cited by
Jackson (2004) as one of the weaknesses in SMME’s in both developing and
developed countries.
Using ICT for better business administration do not necessarily imply the use of the
Internet, but rather the use of a stand-alone computer. It is thus less expensive and
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this enable more SMME’s to reap this benefit of ICT. Still some computer
knowledge is necessary, which may still be a barrier for most SMME’s – not always
in terms of cost but also in terms of time. Dahl and Nordmark (2004) mentions an
alternative for survivalists and thudllers would be to share ICT, such as a computer,
for business administration. A possible alternative could be that two or a few more
businesses could share one computer, but this is only possible if they are located
close to each other.
Administrative processes that need connectivity include booking confirmations and
invoices. Although e-mail and internet will be the most cost effective solution
especially if international customer must be reached, Dahl and Nordmark (2004)
found that fax facilities are still the most economical for SMME’s in rural areas.
ICT also improves production control through better administration. There is
however a need to develop tailor made software products for SMME’s since off the
shelf product for administration is often inappropriate and expensive (Duncombe &
Heeks, 2001).
ICT reduces cost to company and therefore increase organisational efficiency and
financial control. In the 2003, the SME Survey indicated 59% of the SMEs indicated
past positive impact of ICT on cost reduction. 69% expected a positive impact on
cost reduction in the future (Goldstuck, 2003).
Because of its cost reduction qualities, ICT is usually adopted in developing
countries (Tanburn & Singh, 2001). Take for instance the difference in cost between
an international telephone call and sending an e-mail. In South Africa the use of
internet through dial-up connections (narrow band) is still very prevalent for SMEs.
By implication, an international e-mail will cost the same as a local telephone call. It
is however still much more affordable than an international land line phone call.
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The impact of cost reduction seems to increase with company size. In 2003
(Goldstuck, 2003) micro enterprises in South Africa reported a 50% positive impact
on cost reduction while in companies sized 101 – 150 and 151 – 200 the positive
impact increased to 70%. This is similar to trends in Africa (Dahl & Normark, 2004)
as well internationally. In Western Australia for instance, a main motivator for
industries to use ICT products and services is to cut costs.
The cost efficiency of ICT use goes hand in hand with the time savings associated
with it since time is money. The impact of ICT on cost reduction may not be shared
by SME’s in all sectors however. The engineering sector and construction sector in
South Africa share a lower positive impact on cost reduction (although the impact is
still generally positive), while the IT Software and Services sector have much higher
positive impact rating (Goldstuck, 2003).
ICT have a positive impact on turnover also. In the 2003 the SME Survey in South
Africa, reported that an overall of 46% SME’s reported positive past impact on
turnover with 52% expecting a positive impact in future (Goldstuck, 2003). SMEs
in construction and Engineering did not report the same high positive impact (35%
and 33.81% respectively) while the IT software and services sector reported the
highest impact with 76%.
The use of ICT can increase SMME’s ability to retain existing clients and win new
clients. Consequently market share growth potential may also increase (Goldstuck,
2003). In 2003, 55% SME in the SME Survey in South Africa indicated that ICT
had a positive impact on retaining and winning clients during the past, with 64%
indicating that they expect a positive impact in future (Goldstuck, 2003). Although
still relatively high ratings existed, SME’s in the engineering and construction did
not share the high positive impact of ICT on winning new clients and retaining
existing clients (43.32% - 45.8%). IT Software and Services on the other hand had
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the highest positive impact rating of 76% and financial services followed them
closely with 65.67%.
The proportion of companies reporting positive impact of IT on winning new clients
and retaining existing clients in the past rises in direct relationship to the size of the
company. Micro enterprises reported 46% positive impact and companies with 81 –
90 employees reported 67% positive impact in the 2003 SME Survey. Companies
with more than 100 employees indicated 67% positive impact (Goldstuck, 2003).
The increase of product use and sales is another consequence ICT as marketing with
ICT can increase client base, as well as the method of doing business with clients.
Internet technology specifically enables SMME’s to sell products and services
online. Poor access to markets for output is one of the weaknesses mentioned by
Jackson (2004). ICT can increase market access (Ndiwalana & Tusubira, 2001).
ICT use has a positive impact as well on SME profitability. In 2003, 57% SME’s in
the SME Survey indicated that ICT had a positive impact on profitability in the past.
66% expected a positive impact in future. The impact seemed to less for companies
with fewer then 20 employees (49 – 52% positive impact) and 31 – 40 employees
(57% positive impact). As company size increased, positive future expectations
seemed to increase with 10% with each band of company size.
SME’s in the engineering, construction, Health Services and Utilities had the lowest
positive rating of the positive impact (ranging from 49% - 50.6%) on profitability,
with IT Software and Services (74.53%) and financial services (63.91%) sectors
reported the highest positive impact on profitability.
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ICT can reduce time needed for transactions. Especially for SMME’s owned by
women in Townships, saving time by using ICT is an advantage. “In South Africa,
as in many other African countries, women are responsible for both raising children
and for their home. By using ICTs in their businesses women entrepreneurs could
support their families and also spend more time with their children and take care of
their homes.” (Dahl & Nordmark, 2004:, p. 51).
Training opportunities world wide is moving towards more flexible training
solutions which include web-based training. SMME’s see the profit of developing in
human resources development, but struggles to balance workload of employees,
costs of training and time lost on training to name but a few considerations. More
flexible options such as online training programmes may be a viable alternative to
train employees without having to loose human resources capacity as well as spend
money on travel and stay (Goolnik, 2002; Brink, Munro & Osborne, 2002).
The ICT industry also creates allot of opportunities for growth of SMMEs. That is
when ICT is used as an enterprise output of SMME’s through manufacturing for
instance, computer hardware and telecommunications products and the production of
software. Although hardware is manufactured on a large scale by mostly macro
enterprises on a large scale, there is an opportunity for SMMEs to create tailor made
hardware and software specifically for their local market (Duncombe & Heeks,
2001). In other developing countries, small scale software producers have succeeded
by focussing on the local market (Duncombe & Heeks, 2001, p. 11). When ICT is
used as a primary processing technology by SMMEs there are a lot of benefits in the
production of tailor made digital products and software customisation. An SMME
may also choose to build information systems themselves and customise software
internally to the needs of the business. Evidence shows that enterprises that tend to
be more successful (Duncombe & Heeks, 2001).
SMMEs can also benefit from providing ICT based services to other enterprises and
individuals. Services can include data entry, Internet service provision, web design
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and other services which are growing rapidly in developing countries such as South
Africa. Services need not be IT based, but can include secretarial and word-
processing services, printing and design services. In other African counties as well
as in Townships in South Africa the use of personal telephones as payphone services
is an example of this as it is used by mostly survivalists.
ICT related support activities that SMMEs can be involved in include also training
and consultancy to other SMMEs (Duncombe & Heeks, 2001). In-house training in
basic application of ICT and tailor made training services are for instance examples
of SMME needs (Goolnik, 2002; Brink, Munro & Osborne, 2002).
SMME’s may use ICT for e-commerce as well. This is true for especially exporters.
This reduces cost and time of transactions and improves transaction certainty and
record keeping (Duncombe & Heeks, 2001). E-commerce may have further benefits
for enterprises in developing countries: it will make it easier for local SMEs to
access the world markets, stimulate global markets and allow SMEs to tap into the
global supply chain. It will also encourage small scale service sector providers to
link more effectively into world markets (Duncombe & Heeks, 2001).
The reduction of costs, increase in client growth, and increase in profitability and
decrease in turnover are key factors and advantages of investment in ICT that
increase the competitiveness of SME’s. In a Western Australian survey in 2006,
findings indicated that ICT provides businesses with a competitive advantage
including the enablement of:
• Better customer relationships
• More effective marketing efforts
• Better communications with staff and suppliers
• Improved knowledge of the market and facilitation of information gathering
• Cost efficiencies and time savings
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In the same study, companies that did not perceive ICT use as increasing their
competitive advantage it was very clear that ICT was a vital part of their business
operations and that they perceived that their competitors would be using similar ICT.
The UK government also place emphasis on the role of ICT in contributing the
competitive gains by SME’s (Brink, Munro & Osborne, 2002). The competitive
advantage brought about by ICT is however not only limited to develop countries.
In Uganda women entrepreneurs in believe that ICT could give them access to
information that would help them improve their financial position of their business
(Dahl & Nordmark, 2004). Various developing countries in search of economic
competitiveness in the global economy have linked the diffusion and adoption of
ICT with competitive gains for both SME and their economies (Ndiwalana &
Tusubira, 2006, p. 2).
The impact of ICT on competitiveness does however seem to vary according to
company size. In the 2003 SME survey, company size seemed to be major factor in
impacting the competitiveness of SME’s as positive impact increase with company
size in terms of all measures of competitiveness (Goldstuck, 2003).
ICT may further lead to an increase of productivity in companies through its ability
to decrease the time spent on tasks, decrease the costs involved in tasks and increase
efficiency of task completion by substituting ICT for other resources, such as labour.
It may also reduce the need for facilities and outsourcing of certain function.
Ndiwalana and Tusubira (2006) mentions that ICT can potentially transform the
productivity of SME’s in two ways:
1. Using ICT as direct input with in the production process. E.g. village phones
owned by rural women and used to provide payphone services to
neighbouring rural communities.
2. Using ICT as tools to help streamline underlying business processes of an
SME. For instance computerising inventory control or accounting.
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From the previous discussions on the benefit of ICT on SMME’s it is evident that
ICT investment can lead to better enterprise management. Since more timely and
accurate of information can be provided by ICTs, there can be greater centralisation
of decision-making, improved communications and reporting systems and improved
inventory control which are all aspects that can lead to improved management.
Besides the availability and quick dissemination of information internally and
externally, software programmes tailored for planning and management is available.
Bosscha, Coetzee, Tereblanche, Gazendam and Isaac (2006) indicates however that
there are high costs associated with such systems which put them beyond the reach
of small manufacturing companies that employ less than 100 people.
Even though less expensive and simpler systems are available, they are not useful to
small companies but rather cater for medium sized manufacturing enterprises. For
small manufacturing companies that cannot afford advanced management systems
poor product quality and inefficiency can be the consequence. This is due to for
instance, a delay in problem identification and intervention, poor job scheduling,
poor inventory management of both raw materials and manufacturing products. A
solution proposed by Bosscha et al (2006) is the use of open source software. The
idea of using open sources software works well in theory, but needs a lot of
development and research to reach full potential in practice. This may be an
opportunity for output of SMME’s in South Africa.
6. Barriers and issues related to the use of ICT
The benefits of ICT may vary according to various sectors. Although all SMMEs
will benefit, research by Duncombe and Heeks (2001) showed that service based
enterprises (i.e. business, financial and technical) and importers/exporters (tourist
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industry, manufacturing and services) will reap the most benefit from ICTs and will
be in better position to transmit benefits to the wider community.
Constrains to increase ICT use is considerable in developing countries such as South
Africa. This is because:
• There is a lack of physical resources and infrastructure (Duncombe, 2006).
• Access to ICT is expensive.
• Technology education and extension institutions are weak.
• The local supply chain capabilities and access to international know-how are
restricted
• Domestic demands are low due to underdeveloped public sector services and
lack of medium-scale and large-scale firms driving ICT innovation.
All these constraints, and more, mean that ICT diffusion into the SME sector is low
(Duncombe & Heeks, 2001, p. 8).
South Africa has a relatively large and growing population that has access to ICT.
Although the concentration of accessibility and fastest growth areas are in urban
areas of some provinces. There is however still many issues that hinder further
growth of ICT. These include access to townships residents, rural areas and poor
provinces. The digital divide in the country is large even though the
telecommunication infrastructure and ICT access is better in South Africa than in the
rest of the continent. Similarly, access to Internet is growing rapidly and is far ahead
of the rest of Africa, but still lags behind developed countries (Dahl & Nordmark,
2004, 17 - 18). Coetzee, et al. (ed) mentions that the high cost and availability of
telecommunications infrastructure is seen as a major cause of competitive
disadvantage in a globalising world that affects SMMEs and rural communities the
most.
ICT ownership is also very expensive. Duncombe and Heeks (2001) cite that ICT
ownership does not only relate to overt costs such as hardware and software, but
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includes also ongoing and hidden costs which includes operational costs, training
costs, upgrading costs, and so forth. Hidden costs is said to make up more than 60-
70 % of the ownership costs. The cost of ownership of ICT in South Africa creates
on opportunity for the development of product and financing innovations that are
more suitable to the needs of South African companies – more specifically more
affordable solutions to ICT.
Using ICT as facilitator of information is an entry point for the development of
SMME’s through ICT (Ndiwalana & Tusubira, 2001). In South Africa a lot of
SMME’s rely on informal systems of obtaining information. Besides the threat of
receiving inaccurate information it may also not be time efficient. SMME’s owner’s
reliance on informal sources of information leads in part to a scarcity of information,
which may have negative effects on the business enterprises. ICT can supplement or
replace informal information resources by providing access to timely and high
quality information.
Computer technology can be used by SMME’s for various tasks. They include
payroll and accounting purposes, email and internet access, stock management and
production control, data storage and retrieval, research and development, and human
resources related tasks. Land-line telephone, cellular phones and fax technology is
however mostly used, especially by SMME in Townships and rural areas in South
Africa. The entry and maintenance of acquiring IT ICT, as well as training
requirements which is also expensive, makes the probable use of computer
technology in South African micro and small enterprises unlikely.
Despite efforts to use ICT for advancement of SMME’s in terms of infrastructure
development in South Africa, growth in small business performance has not grown.
Ndiwalana and Tusufira (2006) cite four reasons for this:
• Service costs of ICE remains high in South Africa
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• Users exploit ICT or entertainment and other social aspects rather than
economic benefits.
• Access to information and data sources has not increased in proportion to the
increase in access to telecommunications, primarily due to a lack of
appropriate applications and services to leverage the existing infrastructure
• There is limited awareness of potential benefits, compounded by lack of basic
ICT and computer literacy among the majority of the population.
Survivalists form the majority of micro enterprises in developing countries
(Cuncombe, 2006). Few survivalist enterprises6 have direct access to digital ICT
and indirect or intermediated access to ICTs will be the norm (Wakelin & Schadrach,
ed). Since ICT can allow a reduction in transactions costs, improved
communications with markets and in the supply chain and improved information
about new opportunities it should be in some way promoted in these enterprises also.
The most common way to promote ICT access, and more specifically digital ICT
access, to survivalist enterprises is through telecentres. These facilities may include
telephone, fax, documentation searches, video libraries for entertainment and
education, health and nutrition training, government services, market process and
more (Wakelin & Schadrach, ed, p. 34).
The successful adoption of ICT by either flyers or survivalist is crucially dependent
on the environment in which they are operating. An institutional and policy
framework is required for the successful adoption of ICTs. The e-readiness of
different countries, regions and even enterprises depend not only on the ICT capacity
6 Livelihood enterprises are micro and small enterprises which contribute to family
income, enabling the purchase of essential goods and services. Survivalist
enterprises are those who are typically income generating. Survivalists are pushed
into enterprises by the lack of other income generating activities. The enterprise will
usually be located at the home and is typically unlicensed and unregistered. They
are commonly founded upon direct sales, trading or processing of natural resources.
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of the enterprise but on the readiness of the wider business community and the
institutional and political environment (Wakelin & Schadrach, Ed, p.36). Wakelin
and Schadrach (nd, p.36) highlight four aspects of the external environment that
requires attention:
• the policy and regulatory framework,
• the telecommunication (and other infrastructure),
• the ICT sector itself, and
• the promotion and awareness of ICTs and e-commerce.
Full participation in e-commerce and the widespread adoption of ICTs for enterprise
operations will require expansion of the ICT infrastructure and other essential
services (such as electronic banking), the development of a strong user base to make
it easier for enterprises to enter into e-commerce, and support services for SMME’s
such as public access facilities (telecentres) should be established (Wakelin &
Schadrach, ed, p. 36). The benefits brought about by ICT will remain out of the
reach for the majority of small enterprises. Most small African enterprises will
neither own ICTs not access nor use ICT-based data. The benefits of ICTs can be
extended to more enterprises via ICT intermediaries (Duncombe & Heeks, 2001).
In a Western Australian study it would seem as though ICT is not only beneficial to
business success, but rather to a larger extent vital to business. However, as in South
Africa, the full potential of ICT is not accessed and used. For instance in South
Africa, fixed line telephone, mobile phones and fax technology is widely used by
SMME’s. The use of e-mail, Internet and computer technologies could enhance
business enterprises even more, but its use in small and micro enterprises in
especially the informal sector is very limited. Micro and small enterprises in
Western Australia use ICT mostly for accounting purposes. The barriers to using
ICT to its full potential include the:
• Shortage of skilled people
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• Security issues
• Privacy concerns
• High staff training costs
• High ongoing costs
In Western Australia, the most prominent barrier to the use of ICT was the lack of
skilled people. Besides the costs involved in constant training costs to keep people
up to date, even ICT trained people are not necessarily trained in the application of
ICT skills to business in different organisations. In South Africa, a lack of expertise
through training is also a problem, but seemed to be overshadowed by the high costs
involved in access to ICTs – especially for survivalist enterprises.
A problem associated with training and skills development for ICT in both
developed and developing countries are the lack of communication between the
market and what is supplied by service providers. This leads to an oversupply in
certain skills (e.g. A+ and MCSE) (YDT, 2003). The cost and location of training is
also a limitation to ICT training. ICT training may be very limited in rural areas.
Since the ICT is such and important developmental need in South Africa and a lot of
emphasis is placed on skills development in this area, there are also a lot of ‘fly by
night’ operators that target vulnerable people in rural areas where information is
limited (YDT, 2003).
Coetzee et al. (ed) mentions the need for increased government involvement in either
subsidizing training, promoting training more explicitly, or motivating the Sector
Education and Training Authorities to provide more ICT training.
Although the problem of the digital divide in South Africa is often perceived as a
problem with access, access is only one of the first barriers. Even if access to ICT is
gained, it will have little benefit if those that gained access do not have the
knowledge and skill to use it properly and effectively (YDT, 2003). As mentioned
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by Dahl & Nordmark (2004) it is not enough to have ICT; knowledge and skill to use
and implement it effectively in Business enterprises is vital.
Knowledge is a condition for the benefits of ICTs for SMME’s in Townships in
South Africa (Dahl & Nordmark, 2004). This is especially true for computer
technology and Internet use. To get the most out of computers it is important to learn
how to use them properly other wise they can be a rather big obstacle. Without
proper knowledge it would take a much longer time to do the work on a computer
than in a traditional way. As consequence, it would also be more expensive as time
is money.
In South Africa, affordability and accessibility to specifically the Internet and
computer technologies are two factors that present barriers to the implementation
and use of ICT in SMME’s (Bauer, 2001). For instance, micro enterprises in
townships in South Africa do not currently use the Internet unless they travel to the
nearest town to use and internet café. This is rather expensive.
In developing countries, such as South Africa, the implementation of mobile phones
rather than Internet may be more advantageous to overcome training obstacles and
high costs associated with for instance computer technology. Tanburn and Singh
(2001) mention however those mobile phones do not even require language skills
and payment can be made in smaller installments the makes it more affordable for
most SMMEs.
Tanburn and Singh (2001) mention another issue: perceptions of ICT. These include
the perception that ICT is cater only for the elite, even though some ICT applications
are relatively easily accessible and affordable. As such, there is a need for raising
awareness of the benefits of ICT for SMMEs (Coetzee, et al., Ed).
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7. Defining the ICT Value Chain
In order to uncover the value of ICT to SMEs, it is essential to define what is meant
by ICT. ICT can be defined as the provision of infrastructure, services, and content
that will enable and streamline communication. According to the OECDiv, ICT
activities are those that “process, deliver and display information electronically”7.
The current state of technology has led to a networked environment operating around
an interconnected array of telecoms, broadcasting services, the internet, carrier and
transmission devices and end point technologyv.
Laying out a value chain that will align this interrelationship between participants is
by no means a simple task due to the complexity within and elastic parameters of the
industry’s operation. In fact, due to the advancement and convergence of
technologies the industry has evolved from vertically integrated silos to a ubiquitous
network. Services are applied within technologies and technologies within services,
doing away with a predictably flow of consecutive operations between defined
activities. For this reason the ICT sector might be better termed a cluster rather than
a value chain.
Due to uptake of ICT-related services across the majority of local industries, full-
time staff that develop and maintain ICT-related services and equipment are now
commonplace in business. For the purposes of this study however, the ICT value
chain has been limited to businesses with sales being primarily generated through
ICT-related services or products, rather than businesses with ICT support divisions
7 For manufacturing industries, the products of an ICT participant must be
intended to fulfil the function of information processing and communication
including transmission and display, or must use electronic processing to detect,
measure and/or record physical phenomena or to control a physical process. For
services industries, the products of a participant must be intended to enable the
function of information processing and communication by electronic means.
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or making use of ICT. Therefore suppliers that enable the use of ICT whether that
be services or product-related, will be subject of this definition.
7.1. Primary Groups
The ICT industry is divided into sectors, as denoted by the South African
Department of Communications:
• Information Technology • Telecommunications • Broadcasting services • Postal Services
Each of these networks provides commercial opportunity for SMEs in South Africa.
However, for the purposes of this report, the OECD definition for ICT activities has
been applied for definition. Consistent with the OECD definition, Postal Services
have also been excluded from the ambit of activities being considered as the primary
medium of communication is not electronic. This is also despite the Postal Services
Act No.124 of 1998 seeking to promote small and medium enterprise participation
within the highly vertically integrated services.
7.2. Networked Interaction
It is clear from the above definitions that the ICT industry can be segregated broadly
by either Product- or Service-related arenas. A Product-orientated activity might for
instance be the supply of a hand-held computer, whereas a Service-orientated one,
the integration of the hand-held device into an IT logistics solution.
Along this continuum, activities can also be placed according to whether they are
Content- or Carrier-characterised. Carrier-characterised activity might be the
offering of broadcasting services via a community radio station, where a content-
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11
1S
11
2P
1.1.3 1.1.4
Basic Telephony
Services
Voice: Local ISD, STD Mobile: Voice, Paging, Data
Call/Telephony
Services
Resale/Aggregation Callback, Account Mngmnt; Call
Basic Carriage &
Transmission
Interconnect (ends); Transmission Services
Leased Line & PSDN
Services
Leased lines; Broadband; Data Network Services;
Higher Level &
Network Services
EFT & Transactions; EDI-Commerce; Voice/Email; Video
Professional Services
Consulting; Systems Integration; EDP/Accounts/Audit; Engineering Services;
Network & Services
ISPs; ASPs; Pay-TV Networks; Broadcast Networks
Computer Comms &
Software SVCs
Bureau/Data Processing; Financial Mngmnt; Outsourcing;
Line, Transmission &
Broadcasting
Equipment
Cable & wire line; Cellular, Radio;
Switch LAN/WAN &
Data Equipment
COS; Bridges; Routers; Hubs; Multiplexers; Modems
Terminal & Peripheral
Equipment
CPE & Handsets; Mobile Paging; Printers; I/O Devices;
Computer Equipment
PC & Handhelds; Workstations; small-scale, mid-range, large-scale
Network Software
Net operating; Systems; Net Mngmnt/Diagnostics; Navigation tools;
Packaged Software
Applications, tools etc
Systems Software
Systems, utilities etc
Networked
Connections
Online Publications; News services content; Database
characterised activity might be the supply of radio slots that might be broadcast
using these services.
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By placing value chain activity on this two-dimensional axis, one can map out the
placement of activities comprising the ICT industry. Each grouping depicted below
is intended to show by way of example the types of businesses making up a category
and is not necessarily exhaustive.
Trade within this framework of activity does not necessarily take place between
adjacent categories or in a linearised fashion. Rather the networking nature of the
cluster is derived from complex interactions that take place between any numbers of
businesses from any category.
8. Activity & Opportunity within the ICT sector
8.1. Performance Trends within the ICT Sector
The following extracts of ICT activity on a global and local scale have been drawn
from the OECD Information Technology Outlook 2006 report.vi Please note that
where statistics have been stated, content provision activities, media and
broadcasting have been excluded, per OECD definition of ICT.
The definition and scope of ICT as discussed by these results is limited the following
International Standard Industrial Classification (ISIC Revision 3) codes:
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Table 1 ISIC8 codes for ICT
Manufacturing
3000 Manufacture of office, accounting and computing machinery
3130 Manufacture of insulated wire and cable
3210 Manufacture of electronic valves and tubes and other electronic components
3220 Manufacture of television and radio transmitters and apparatus for line
telephony and line telegraphy
3230 Manufacture of television and radio receivers, sound or video recording or
reproducing apparatus, and associated goods
3312 Manufacture of instruments and appliances for measuring, checking, testing,
navigating and other purposes, except industrial process control equipment
3313 Manufacture of industrial process control equipment
Services -- goods related
5150 Wholesale of machinery, equipment and supplies
7123 Renting of office machinery and equipment (including computers)
Services – intangible
6420 Telecommunications
7200 Computer and related activities
vii
8 International Standard Industrial Classification of All Economic Activities, Revision3
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This section serves to provide a broad outline of ICT within the world context and
with some local performance indicators. The intention is to provide a high-level
view of spend within the various ICT sectors and the possible opportunity nodes.
ICT is still enjoying rapid worldwide growth currently; with 2006 statistics figures
expected to have reached 6%. ICT spend has also grown on average 5.6% over the
period 2000 – 04 in current USD, while OECD countries’ share dropped from 89%
in 2000 to 83% in 2006. This is mainly due to increased spending in emerging
economies, notably China having seen a growth of 22% per year between 2000 and
2005 to USD 118 billion in current prices. Other than China, nine non-OECD
countries have seen massive growth including India (23% pa) and Russia (25% pa),
and a second group including South Africa, Indonesia and Eastern-European OECD
countries comprosing a second high-growth family. Rapid growth in ICT in these
economies is also reflected in their high share of international trade, foreign direct
Comms equipment
6%
Electronics & components
34%
IT equipment18%
Software3%
Services6%
Telecommunications33%
Figure 8-1 Top ICT 250 Firm Revenue Share by Sector, 2005
Note: Preliminary 2005 data are based on financial year
reports for 2005 or the most recent four quarters.
Source: OECD, Compiled from annual reports, SEC filings
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investment (FDI) and mergers and acquisitions (M&A). For more information
regarding trends of the ICT within the BRICS countries (Brazil, Russia, India, China,
South Africa) see Annexure ICT Spend in BRICS Countries 2000 – 05.
Amongst the top 250 firms of the OECD study, sales have shown good growth in
software and IT equipment and services, but communication seemed to have
suffered. These sectors also now command the highest mix of revenue generated
amongst the top ICT firms (see Fig 2 below).
IT Services has also been the only sector to remain profitable throughout the period
2000-05. However, revenue in software has continued to grow over the period to
almost match the same levels as that of IT Services. A worldwide view of revenue
mix reveals that more than half 2005 ICT spend was on communications services
and hardware, 23% on computer services, and 17% on computer hardware and 10%
on software.
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Figure -2 Worldwide ICT Spending by Market Segment 2005 - 08 USD Billions in Current Prices
0 0
500 000
1 000 000
1 500 000
2 000 000
2 500 000
3 000 000
3 500 000
4 000 000
2000 2001 2002 2003 2004 2005 2006 2007 2008
Computer Hardware Computer Software Computer Services Communications
Note: Data for 2005 to 2008 are forecasts
Source: OECD based on data supplied by WITSA
Closer to home, South Africa also spent USD 23.6 million in 2005. In recent years,
large leaps in growth were seen in 2002 (56%) and 2003 (36%) but slowed down
considerably in 2005 (14%). The fastest growing segments have been in Software
and IT Services, which both saw 21% growth in 2005 but Communications only
managed a 9.5% growth for the same period. However, the largest portion of
revenue has fallen to the Communications. The highest sales volume growth in 2005
was also generated by Communications (USD 1,116 million), followed by IT
Services (USD 776 million), IT Hardware (USD 564 million) and Software (USD
404 million).
Unfortunately limitation of the study precluded sourcing accurate data of SMEs’
contribution to the industry’s growth.
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USD Million in current prices
0
5,000
10,000
15,000
20,000
25,000
Communications 6,896 5,845 5,772 8,947 11,709 12,825
IT Services 1,293 1,351 1,486 2,440 3,632 4,408
Software 627 724 800 1,328 1,965 2,369
IT Hardware 1,661 1,707 1,698 2,503 3,457 4,024
2000 2001 2002 2003 2004 2005
10,4779,627 9,756
15,218
20,763
23,626
Figure 8-3 South African ICT Spend by Market Segment, 2000-05
Source: OECD, based on data supplied by WITSA.
Growth in the South African ICT industry also outstripped that of the Top 250 Firms
as evaluated by in OECD countries. As shown below, all sectors of the South
African ICT market have outperformed those of the Top 250 Firms as a whole,
notably Software & IT Services.
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8.2. SWOT analysis
A SWOT Analysis (Strengths, Weakness, Opportunities, Threats) of the ICT sector
is summarised below. This analysis was generated for the ICT sector study by the
National Research and Technology Foresight Process (NTRF), which commenced in
1998 and published its findings in November 1999. The study was initiated by the
then Department of Art, Culture, Science and Technology (DACST) to identity the
technologies and technology trends across twelve industries that would shape
research and technology policy making the best likely impact on the creation of
19.4%
30.5%27.8%
13.2%
17.7%
5.1%
8.3% 8.3%
4.1% 4.3%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
IT Hardware Software IT Services Communications Total
South African Avg Growth % OECD,Top 250 Firms Avg Growth %
Figure 8-4 ICT Spend Growth per sector for SA vs Top 250 Firms, 2000 - 05
Source: OECD, based on data supplied by WITSA
Note: Communications for the Top 250 Firms comprises Communications
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wealth and quality of life for all South Africans. Unfortunately there is little
evidence of updated information from this extremely useful information which was
published in 2000. Even though some points are significantly outdated they can
serve as pointers within the ICT sector to highlight opportunities for supply within
the local ICT industry, and at the same time offer a means of managing and
harnessing the opportunities.
8.2.1.1.1. Strength
s
Weakness
• Accelerated roll-out of infrastructure
• Education and learning in the IT field
• Existing skills base in place - pockets
of excellence
• English is ICT’s lingua franca
• Government will to introduce IT
facilitated Public Sector Services
• Existing IT Infrastructure
• IT Costs are relatively low
• South Africa’s IT Leadership in
Africa
• South Africa’s International IT links
• IT is a new driver of the Economy
• Inequitable Access
• Lack of a National IT strategy
• Low Levels of Literacy and
Education
• Inadequate IT Skills Base, worsened
by the brain drain
• IT “Phobia” and Elitism
• Poor Government Services hamper IT
roll-out
• Industrial Age management is still
being used in the IT age
• Small Local IT Market
• Poor Technology Transfer
• International lack of clout in IT
• Poor conditions for investors
• IT precipitated antisocial behaviour
Opportunities Threats
• Emerging Information Society
• Accelerated roll-out of
telecommunications infrastructure
• IT worsens disparities in the
Information Society
• Lack of IT skills in the labour force
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• Policies to foster an Information
Society
• IT enabled
Learning/Education/Training
• Distance education
• National policy to stimulate IT
development
• Public Service Delivery through IT
• Transformation of Government using
ICTs
• Software development to address
developing world problems
• Indigenous knowledge exported via
ICTs
• Less legacy infrastructure than the
developed world
• International links solve several IT
weaknesses.
• Various ways of financing IT
operations
• SMMEs, the future of the IT industry
• Work patterns are more flexible
• ICTs can enhance security and safety
outside the IT sector
• Education funding is low
• Distance education is not a mature
medium
• Government Inefficiencies - too
sluggish for the fast moving IT sector
• Government policies may lead to job
losses
• Redundant and Inappropriate
Technologies
• Globalisation favours the developed
world
• A weak economy is further threatened
in a global information society
• New social problems arise
viii
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8.3. ICT Spend in BRICS Countries 2000 – 05
Source: OECD, based on data supplied by WITSA
USD millions in current prices
2000 2001 2002 2003 2004 2005IT HARDWARE
China 12 507 16 639 20 357 27 027 39 057 47 927Hong Kong China 1 961 2 007 2 033 1 921 1 980 2 026
Chinese Taipei 2 767 2 892 3 362 3 605 4 148 4 391India 2 257 2 764 3 457 5 013 7 204 10 264
Russia 1 816 2 107 2 345 2 881 3 900 4 852Brazil 6 263 6 404 7 031 9 905 12 407 15 946
South Africa 1 661 1 707 1 698 2 503 3 457 4 024SOFTWARE
China 1 085 1 658 2 253 3 344 5 295 7 940Hong Kong China 278 318 358 373 432 492
Chinese Taipei 519 628 739 860 1 046 1 228India 358 456 588 948 1 350 1 908
Russia 343 395 450 570 742 923Brazil 1 602 1 698 1 787 2 469 2 877 3 566
South Africa 627 724 800 1 328 1 965 2 369IT SERVICES
China 851 1 389 2 155 3 591 6 203 10 006Hong Kong China 540 601 688 747 903 1 071
Chinese Taipei 788 929 1 073 1 226 1 478 1 731India 1 120 1 386 1 787 2 859 3 876 5 243
Russia 891 979 1 158 1 537 2 099 2 747Brazil 4 937 4 792 5 101 7 353 9 040 11 911
South Africa 1 293 1 351 1 486 2 440 3 632 4 408COMMUNICATIONS
China 29 917 32 129 37 612 41 437 47 102 51 759Hong Kong China 9 098 8 432 9 423 9 595 11 662 12 240
Chinese Taipei 14 200 11 069 11 977 12 570 13 247 14 367India 12 841 12 239 14 166 16 873 23 734 29 023
Russia 6 064 7 508 9 134 11 566 14 798 18 806Brazil 20 609 17 691 17 757 21 491 24 006 30 642
South Africa 6 896 5 845 5 772 8 947 11 709 12 825TOTAL ICT
China 44 359 51 815 62 376 75 400 97 658 117 632Hong Kong China 11 878 11 358 12 501 12 637 14 977 15 829
Chinese Taipei 18 274 15 518 17 151 18 262 19 920 21 718India 16 575 16 844 19 997 25 692 36 164 46 438
Russia 9 114 10 989 13 088 16 554 21 539 27 327Brazil 33 410 30 585 31 675 41 217 48 330 62 065
South Africa 10 477 9 627 9 756 15 217 20 763 23 625
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9. NGOs and ICT for Development
Non-governmental development organizations and other organizations of civil
society run into thousands throughout the country. These, mainly small community
based organizations are big consumers of ICT products and services. A targeted
study to establish the ICT consumption needs this sector will be highly informative,
especially because, many of these organizations are both commercial and social
enterprises. These organizations mainly serve marginalized poor black and rural
communities, improving their performance opening access to ICT goods and
services would significantly improve their performance for the benefit of the
neediest members of the South African community.
10. Demographic of the sector
This is an area that needs additional research. But it is observed that the
concentration of ICT SMMEs is still found in the urban areas of the country. A brief
visit to Soweto, Sebokeng, Soshanguve in Gauteng showed that there are hardly any
ICT services providers in these areas except for a growing number of mobile phone
shops and an occasional internet café.
This presents the greatest challenge as the majority of the population lives in these
areas. One of the main reasons identified were lack of basic infrastructure, skills,
and information about funding. More work needs to be done in this area.
11. Future growth prospect of SMMEs within the ICT sector
11.1. Policy environment
11.1.1. Provincial ICT Development planning
The researchers could only get hold of ICT development plans for Kwazulu Natal
and the Western Cape Provinces. We could not establish whether other provinces
have or have not developed these plans.
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11.2. Funding environment
Governments has establish various institutions to provide funding for SMMEs
generally though there is little known about specific funding available for ICT
SMMEs.
11.3. Unexploited markets and under serviced areas
Traditional black residential areas – townships and rural areas are crossly under
serviced and are open for exploration. Opportunities to provide basic internet café
type services are abundant in these areas. It is a special market that requires special
services though, because of low levels of literacy in some cases.
12. Opportunities and challenges
12.1. Opportunities
Law governing communications and electronic commerce in SA is the “E-commerce
and Transactions Act of 2002”, designed to provide a national e-strategy for South
Africa, promote the use of ICT in SMMEs. SMMEs have been acknowledged as the
key generator of economic innovation, especially in ICT applications and specific
programs address SMMEs requirements directly so as to maximize the benefits of
the development of the information economy with in SMMEs. SMMEs in South
Africa cover a very broad range of firms, from established traditional family
businesses employing over a hundred people which are medium-sized enterprises,
down to the small self-employed from the poorest levels of the population (informal
micro enterprises). While the upper end of the range is comparable to the small- and
medium-sized enterprises (SME) population of developed countries, statistics reveal
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that an immense majority of SMMEs are concentrated on the very lowest end. These
are primarily black survivalist firms.
12.2. Challenges
Cost effective solutions: The SMME sector in South Africa makes up 99.3% of all
private sector enterprises. One of the major challenges facing SMMEs is the
acquisition and deployment of cost-effective and appropriate ICT solutions. SMMEs
must be able to identify the ICT infrastructure required to improve performance and
global competitiveness. Likewise, they must be aware of available products, services
and initiatives (public and private), locally and worldwide, to meet these
requirements9.
Lack of skills: The biggest challenge is how to effectively equip small businesses
with the skills and knowledge that enable them to effectively participate in
articulating their ICT needs one hand, while also generating the necessary human
capacity and supporting it to create solutions that respond to these needs in an
effective and sustainable manner. Very little research regarding SMMEs has been
done in South Africa. For instance, it was found that there is still great disparity
between courses offered, the graduates produced and the actual job market.
Additionally, most training service providers do not invest in job market surveys, or
in tracking of graduated students. Consequently, many ICT courses currently
offered do not have a significant impact on job creation.
Khula Report (2004) identifies the following major challenges
♣ Prevalence of Low Value-Adding ICT Enterprises – Most black SMMEs
in the sector are set to perform less value adding roles in the value supply
chain of ICT goods and services.
9 http://www.csir.co.za/plsql/pTl0002/PTL0002_PGE038_ARTICLE?ARTICLE_NO=7012122
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♣ Sustainability of Start-up ICT Enterprises – As a result of the lack of
capital base, access to support infrastructure, as well as the shortage of
management skills, black SMMEs are often unable to fund and/or sustain
their operations in the long term.
♣ Lacks of Entrepreneurial Culture/Job seeking mentality – Black people
were channeled by the Apartheid psyche to enter the job market over and
above being encouraged to develop their own businesses.
♣ Reluctance to partner with BEE and SMMEs – It has been submitted that
some enterprises involved in the services environment (as opposed to
product vendors) do not partner with BEE companies and other
programmes currently implemented by the DTI.
♣ SMME Development Programme – There needs to be a co-ordinated
industry effort at developing sustainable black SMMEs in the sector.
♣ Limited knowledge of Available Enterprise Support Programmes – Most
BEE enterprises has limited knowledge of government policies and
enterprise support measures that are currently in place. Consequently,
access to available enterprise incentives through the dti’s Black Business
Supplier Development Programme is very low.
♣ Insufficient support – Insufficient support received from government
quasi government enterprises for local manufacturers and their products.
♣ Financial Management Education – It is submitted that financial
management education and training directed at SMMEs and potential
entrepreneurs is lacking. It is further submitted that people in rural
communities, in particular, are intimidated by their lack of knowledge
and understanding of financial structuring and the attendant operational
complexity related to such structures.
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13. Issues for Possible Further Exploration
13.1. Trends Impacting the ICT Sector
Factors influencing ICT development and use in this country, especially with respect
to SMEs and how they are impacted.
Some of the possible factors that might need further exploration include:
• Competitiveness (Saitis report) • The enabling environment especially in areas where there is still limited access
(Saitis report) • HR Development (Saitis report) • Creating the Information Society in South Africa (Saitis report) • Emerging Technology Applications (OECD IT Outlook 2006 report) • Funding R & D (with foreign examples of how this has been made accessible)
(OECD Drivers of Innovative Clusters report) • Factors influencing an IT Purchase (SME Survey 2003, p49) • Skills and HR
14. Recommendations
14.1. Recommendations: ICT developments to benefit
SMMEs
Duncombe and Heeks (2001: 4) used findings of a study in Botswana to develop
ICT-related categorisation of enterprise, which recommends different priorities for
different enterprises which is useful for the support and development of SMME’s
through ICTs in South Africa. The categories of SMME’s include:
• Non-ICT users: those who do not use ICTs or telephones. For them, the
priority will be to build information networks; to develop community
telecommunications and radio/TV/news-paper-based channels first and
foremost: and to use ICT intermediaries only as a secondary priority.
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• Non-IT users: those who use telephone/fax but not computers. For them, the
priority is to gain access to ICT intermediaries and also to improve capacities
for information capture, processing and dissemination.
Non-networked ICT users: Those who have stand-alone computers. For them, the
priority is to build basic management and information capacities and to help make
more/better use of the computers they already have. This group is a clear reminder
that access to ICTs and effective use of ICTs are two quite different things.
• Networked/intensive ICT users: those making significant use of networked
computers. For them the priority is to adopt a more integrated and strategic
approach to ICTs that applies the technology to key business goals. ICT
initiatives for enterprise should focus on this group.
Duncombe and Heeks (2001, p. 4) assert that the success of ICT developments in
developing countries will be critically dependent on know-how’s and skills capacity
within the local and ICT sector and amongst secondary ICT-users. In their opinion it
is especially technical managerial and developmental skills that need to be developed
to fully harvest the benefits of ICT.
To fully support the development that ICT can bring to SMMEs Duncombe and
Heeks (2001, p. 4) recommends:
• A needs driven approach to interventions
• Emphasis on market demands rather than supply. Agencies and policies need
to think far more about the drivers/pull factors that make enterprises’ want to
use ICT rather than those that allow them to use it.
• Macro-level policy interventions are less costly and have shown to be more
successful than micro level individual enterprise interventions.
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Duncombe and Heeks (2001) assert that enterprise level support to flyers10 will have
little need for direct business assistance but can be assisted through policy measures
that facilitate access to finance, reduce to cost of access to infrastructure, support
skills and technology and creates market access (through linkages and vendor
development programmes, for example) (5).
To move towards e-readiness leadership, increased telecommunications
liberalisation, human capital development, creation of a business environment and
strengthening data infrastructure within the enterprise sector is needed. Coetzee, et
al (Ed) mentions it is because of a lack of leadership in ICT initiatives in South
Africa that fragmentation occur throughout various sectors and organisations. As
consequence there may be a large number of small ICT initiatives that operate
without a common goal. Owing to the fragmentations in ICT, investments in the
development of SMME ICT capacity do not have a significant impact and are not
addressing and industry need. Strong ITC leadership is needed, dedicated by the
needs of SMMEs (Coetzee, et al, Ed).
Increased telecommunications liberalization should be implemented to expand
connectivity and reduce costs of access to ICTs.
Human capital development is another priority of support to SMMEs. Academic
networks can especially play a role her in small businesses to appreciate and
leverage the potential benefits offered by ICT in sub-Saharan Africa (Ndiwalana &
Tusubira, 2006:4). ICTs can also be introduced in schools to develop potential
SMME owners to use ICTs.
Tanburn and Singh (2001) indicated that an environment fit for the development of
SMMEs through ICT should be competitive in nature. It should not protect
10 Flyers and potential flyers are typically SMME that are growth orientated. They
are almost exclusive urban or peri-urban based. They are market orientated, having
identified niche product or services leading to profitable and sustainable market
opportunities. They benefit from a higher degree of integration into market systems,
which are most highly developed in lower proximity.
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traditional telecommunications providers for instance (Tanburn & Singh, 2001: v).
A lack of competition result in uncompetitive prices – that is usually overpriced
services, such as telecommunications providers in many developing countries
(Tanburn & Singh, 2001, p. v).
Another system of support to SMMEs will be to develop ICT applications and
information content specifically for their enablement and development of (Bauer,
2001). This is another aspect in which academic networks in South Africa can
support SMME development through research.
14.2. Challenges and corrective measures
14.2.1. Leveraging ICT enabling from business use11
The Government should work to create a better understanding of how SMMEs can
harness the power of ICT and better communicate the benefits to be had by adopting
ICT. Strategies could include:
♣ -Using specialist channels to communicate messages that address ICT
issues faced by small businesses; and
♣ -Making simple e-commerce tools readily available to small businesses.
SEDA should stimulate increased knowledge of the applications of ICT and
encourage this application to SMMEs. This could be achieved by:
♣ -Regularly bringing together exceptional achievers in the adoption of ICT
via an ideas forum;
♣ -Lowering the cost of ICT-related information to SMMEs;
11 Adapted from: Western Australia Information and Communications Technology Industry
Development Forum. 2006. Enabling Growth: The contribution of ICT to West Australian Economy.
Perth, Australia
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♣ -Increasing the accessibility of SMME advice by facilitating mentoring
and
♣ -Making simple e-commerce tools readily available to small businesses
14.2.2. Promoting the use of ICT to enable exports
across all SMMEs
The Government should consider playing a greater role in the promotion of online
activities, predominantly online commerce. This could be done by:
♣ -Establishing workshops for business enterprises showcasing the advantages of online selling technologies and the business benefits associated with them. Workshops should be targeted to industries where there is thought to be potential for greater use of the Internet and associated services;
♣ Focus should also be given to dealing with business concerns about ICT
security and privacy by explaining the security technologies available and
promoting their use;
♣ The initiative should also include avenues by which Government can
demonstrate the ways business can use ICT and the Internet to enhance
export opportunities; and
♣ -The workshops could also facilitate the two-way flow of information so
that Government can better understand why particular industries are not
adopting Internet services such that more policy action can be considered.
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14.3. Potential support mechanisms that could be
applied
14.3.1. Enhancing `ICT enabling' through skills development12
SEDA in collaboration with the ICT SETA should continue to support individuals in
gaining appropriate basic ICT skills. This could be achieved by:
♣ -Communicating the message to SMMEs of the significance and
importance of obtaining basic ICT skills;
Providing all SMMEs with the opportunity to gain the basic ICT skills needed to be
an active participant in society by:
♣ Improving access to vocational education courses that focus on ICT;
♣ Including ICT topics of study in non-ICT training courses;
♣ Encouraging the adoption of continuing professional development which
focuses on ICT;
♣ Partnering with industry and education and training providers to improve
the perceived attractiveness of ICT courses;
♣ Using its position as a large employer, Government to provide on-the job
ICT enterprise development training to public service employees;
♣ Further encouraging the use of ICT to facilitate learning at an early age in
the school environment - this would include the ongoing provision of ICT
infrastructure in schools and ongoing ICT professional development for
teachers;
12 From: Western Australia Information and Communications Technology Industry Development
Forum. 2006. Enabling Growth: The contribution of ICT to West Australian Economy. Perth,
Australia
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♣ Partnering with education and training providers to identify the core ICT
competencies necessary and establishing common standards of ICT
literacy across the education and training system.
14.3.2. Liaison with industry
SEDA should undertake ongoing liaison with industry to identify the ICT skill needs
and supply chain opportunities of business and in particular those needs that are not
being met. Policy programs can then be structured in such a way so as to target
identified skill gaps through the provision of education services and perhaps even the
promotion of South Africa and Africa as a place for interstate ICT-skilled people to
work.
Expand current assistance to start-up ICT businesses to established small and
medium sized ICT businesses.
This should include facilitating access to services such as legal services, design services and venture capital providers as well as more traditional services such as commercialisation and business growth.
14.3.3. Enhancing local ICT import competing firms
Identify and investigate the country’s import-competing industries with a view to
developing a program to assist them in their operations.
14.4. Opportunities and how they can be explored
South Africa's government has put a strong emphasis on ICT sector development
through the execution of a National ICT strategy. This plan proactively addresses
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ICT penetration with in SMMEs, particularly for disadvantaged segments of the
society. Since 1994, the ICT sector has been growing flamboyantly, with ICT budget
expenditure at US$9.6 billion, 6.9 percent of GNP. This mirrors a comparative
advantage in high-level professional skills over blue-collar manufacturing skills. The
South African government has implemented a number of frameworks for policies,
infrastructure, partnerships and task forces that will help South African communities
play a role in the global economy. The ICT sector not only provides a significant
number of new jobs, but also is positioned as an enabler of increasing
competitiveness in sectors such as SMMEs, as a source of future export earnings,
and as a key enabler to achieve development goals (NICTS).
SMMEs are recognized as potential engines for economic and social growth all over
the world. Although figures may vary, SMMEs account for the majority of firms and
a corresponding share of employment within developing economies. The sector
largely exceeds the average economic growth of national economies in many
developing countries and contributes significantly to employment creation.
Accordingly, governments and development partners alike have recognized the
important role that the SME sector plays in overall development. Government
policies and programmes are therefore increasingly focused to supporting the growth
of SMMEs. These range from tax incentives to technical assistance, from regulatory
provisions to training and other types of incentives13
Information and communication Technology (ICT) can provide small enterprise an
opportunity to conduct business anywhere. The use of internet allows small business
to project virtual storefronts to the world as well as conduct business with other
organizations. Small enterprises can use ICT to establish e-commerce applications
13 . Hallberg, K., A Market-Oriented Strategy for Small and Medium
Enterprises, in IFC Discussion Paper no. 40. 2000, The World
Bank: Washington DC.
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particularly in developing economies where the infrastructure is not classified as
“high. technology”. E- commerce is the process of buying, selling, or exchanging
products services and information via computer networks including internet
services14.
ICT helps SMMEs through leveraging the benefits and synergy that accrue from
working together; academic networks can mitigate many of these challenges through
nurturing an appropriate human resource base, researching in appropriate
technologies as well as improving small businesses through creating a bigger market
for local solutions. It is through ICT that stronger negotiating position that can be
used to articulate and lobby for an environment that stimulates the use of ICT within
small businesses15
14.5. Specific interventions or quick gain strategies for
SEDA.
2010 presents plenty of work opportunities for SMMEs in the ICT sector to cater to
the huge influx of visitors to South Africa and neighbouring countries. There are
already many opportunities in the building and construction, tourism, and
telecommunications sectors.
Improvement of information systems: Small enterprises rely primarily on informal
information. This is essential to sales and is appropriate to small enterprise
14 Brian J. Corbitt, Nabeel A. Y. Al-Qirim E-business, E-government & Small and Medium-size Enterprises:
Opportunities and Challenges 15 Ali Ndiwalana and F. F. Tusubira, ICT in Small Businesses: How can Academic
Networks be more relevant? http://www.wideopenaccess.net/files/ICTs_SMEs_NRENs_reviewed.pdf
SMMEs as users and suppliers of information on ICT sector
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conditions. However, it is often of poor quality and is restrictive in its range.
Enterprise information systems must therefore be improved: networks must be
developed, through business linkages more than social or institutional linkages. A
much greater emphasis must be put on demand-related information: it is mostly
supply-related information that is provided at present. As well as supporting informal
information systems, there is a need to help larger enterprises through the transition
point to greater use of formal information and greater use of ICTs.
Research: Research should be driven by a bottom-up approach to help cultivate and
make ICT more relevant to SME needs. This will help create local ownership of ICT
projects by giving small business owners an opportunity to participate in defining
their needs and help build internal skills capacity to effectively utilize ICT within
small businesses. The ability to effectively utilize ICT is often the major constraint
and not equipment as is frequently assumed.
More government and other sector’s involvement: In order to fully harness the
latent potential of ‘baby’ ICT industry, governments and other bodies have a huge
role to play in terms of human capacity development. This can happen at two of
levels: First, they can help create more awareness of how small businesses can
leverage ICT to become more efficient and productive, in the process creating more
local demand for ICT services. Secondly, they can develop more appropriate human
capacity to respond to this growing demand by equipping the locals with skills that
allow them to not only be job seekers but also have the capacity to discern these
needs and create own businesses that respond to them.
Training: South African government and other private institutions needs to deliver a
strategic response that would drive ICT training policy towards the ultimate goals of
producing SMME trainees with in ICT sector, and positively contributing to the
reduction of poverty and to clear economic growth.In order to successfully conduct
staff training program, a strategy is required that takes into account the particular
characteristics of the enterprise. Ιn small enterprises the staff that can be trained on
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ICT is extremely limited and naturally cannot acquire specialized computing
knowledge nor can it be easily upgraded. Thus as a consequence, the training
program must be carefully designed so that it covers the necessary knowledge within
a relatively short period of time. Training programmes should be focused on:
♣ reaching relevant SMMEs
♣ motivating SMMEs for ICT
♣ ICT skills of employees
This should be customized as SMMEs are so different in context and learning needs.
This programme should be delivered through local trainers. However, it is important
to note that negative side-effect of this kind of customized training programme is it is
very costly.
Co-ordination of SMME policies: Co-ordination of SMME policies amongst
government departments: Currently the SMME policy in South Africa is not co-
ordinated or aligned, resulting in duplicated and conflicting efforts and a loss of
synergy.
There are numerous benefits for all types of SMMEs in all sectors in investing in
ICT. There are however a number of barriers, including cost, infrastructure and
training. The latter can however be overcome successfully by means of
interventions. Assistance to SMMEs is however necessary on both policy and
practice level.
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15. Bibliography
2005 Recent Findings on Tax-Related Regulatory
AISI (African Information Society Initiative). 2000. National ICT Profile: South
Africa.
[http://www.bellanet.org/partners/aisi/nici/Documents_English/southpub.en.doc]. 2
April 2001.
Ali Ndiwalana and F. F. Tusubira, ICT in Small Businesses: How can
AcademicNetworks be more relevant?
http://www.wideopenaccess.net/files/ICTs_SMEs_NRENs_reviewed.pdf
Bauer, S. 2001. Information and Communication Technologies (ICT) in the
promotion of Economic Development and Employment Promotion: Assessing
Experiences and Opportunities. Draft Report.
Bosscha P, Coetzee R, Terblanshe P, Gazendam A & Isaac S. 2006. ‘SmartFacory:
the challenges of open and low-cost ICT in the small manufacturing industry’. South
African Journal of Science, no.. 102, July – August, pp. 335 – 338.
Brian J. Corbitt, Nabeel A. Y. Al-Qirim E-business, E-government & Small and
Medium-size Enterprises: Opportunities and Challenges
Brink, B Munro, J & Osborne, M 2002. ‘Online Learning Technology in an SME
Work-Based Settings’. Educational technology & Society, Vol 5, no 2, pp. 81 – 86.
Business Day (Johannesburg) South Africa: 'Taiwan Method Could Help Fight
Unemployment in Country', April 12, 2007
Coetzee R, Denner F, Eksteen J, Eloff J, Govender E, Hirsch A, Morwala T, & Van
der Merwe W. (nd). ICT in Manufacturing. The ICT in Manufacturing Core Team.
Dahl, E & Nordmark, K. 2004 ICT in South African Townships: A means for women
of small enterprises to run their business more efficiently? Karlstad University
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Sweden: Division for information technology, Information systems. Available from:
http://www.humanit.org/docs/ICTinSA_Townships_January2004.doc
Duncombe, R & Heeks, R 2001. Information and communication technologies and
small enterprise in Africa: Lessons from Botswana. IDPM: University of
Manchester.
Duncombe, R 2006. ‘Using the Livelihoods Framework to Analyse ICT Applications
for poverty reduction through Micro enterprise’. Information Technologies and
International Development, Vol 3, no 3, pp. 81 – 100.
Economist Newspaper Group. 2001. "A Survey: South Africa." The Economist, 24
February.
Foresight Process; “Foresight Process ICT Sector Report”; 1999.
Goldstuck, A. 2003. SME Survey: an analysis of the impact of Information
Technology and financial services on Small, Medium and Micro Enterprises in South
Africa. World Wide Worx (Pty)Ltd
Goolnick, G 2002. Online Journal of Distance Learning Administration, Vol 5, no 2,
retrieved May 10, 2007 from
http://www.westga.edu/~distance/ojdla/summer52/goolnik52.html
http://www.commerce.uct.ac.za/Research_Units/DPRU/PBriefsPDF/PolicyBrief07-
10.pdf
http://www.csir.co.za/plsql/pTl0002/PTL0002_PGE038_ARTICLE?ARTICLE_NO
=7012122
http://www.smesurvey.co.za/#
ILO (International Labour Organization). 2001. "Information and Communications
Technology in a Middle Income Country—South Africa." World Employment
Report 2001: Life at Work in the Information Economy.
International Business Strategies; “ICT in South Africa”; March 2007.
Jackson, PLM 2004. Entrepreneurial Support in South Africa: A case study of a
small enterprise support centre in Johannesburg. A dissertation submitted in partial
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fulfilment of the requirements for the degree of MSc urban Governance for
Development. International Development Department, School of Public Policy,
University of Birmingham.
Mandla Langa Mainstreaming SMMEs: Technology as a Tool for Community
Development http://www.connect-world.com/Articles/old_articles/MandlaLanga.htm
Ndiwalana A & Tusubira FF 2006. ICT in Small Businesses: How can Academic
networks be more relevant? Open Access.
NICI (National Information and Communications Infrastructure). 2000. Country
Profile: South Africa. [ http://www.bellanet.org/partners/aisi/nici/South%20Africa/southab.htm].
OECD Science, Technology and Industry Outlook 2004 Country Response to
Questionnaire South Africa, http://www.oecd.org/dataoecd/30/9/34243230.pdf.
SAITIS (South African Industry Strategy Product). 2000. South African ICT Sector
Development Framework. [ www.saitis.co.za ].
SME Survey 2006: Finance and skills the enabler, ICT and BEE take a back seat:
http://www.coolcumba.com/press/press_article_33.htm, 2007
SMMEs, www.pnc.gov.za, 16th April, 2007
South African ICT Sector Development Framework,
http://www.dti.gov.za/saitis/docs/html/chap01.html
Tanburn J & Singh AD 2001. ICT and Enterprises in Developing Countries: Hype
of Opportunity. SEED Working Paper, no. 17, Series on Innovation and
Sustainability in Business Support Services (FIT).
The BMi-Techknowledge Group; “The South Africa Telecoms SME Customer
Profile & Market”, 2007.
The SME Survey; “SME Survey 2006”,
http://www.smesurvey.co.za/content/dynamicsubs.asp?MenuSubs_ID=11, 2007.
Van Hertog, P; “OECD Innovative Clusters Drivers of National Innovation
Systems”; 2001.
Wakelin O & Shadrach B n.d. Impact Assessment of Appropriate and Innovative
Technologies and Enterprise Development.
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Western Australian ICT Industry Development Forum. 2006. Enabling Growth:
The contribution of ICT to the Western Australian Economy. Retrieved June 6,
2007 from. http://www.tiac.wa.gov.au/ictforum/reports.html
Youth Development Trust 2003. Youth Information and Communications
Technology Training, Entrepreneurship and Job Creation: A report prepared by the
Youth Development Trust for the IDRC.
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16. Annexure A: Annotated bibliography Our Name for the resource Short Description Details How this is useful http://www.itweb.co.za/sections/business/2005/0508080838.asp?A=ELR&S=e-Learning%20and%20Business%20Education&O=FPIN
BTI, in line with its mandate to support information and communications technology businesses, has established the Bodibeng Entrepreneurial Training Institute (BETI) to provide quality business skills training to ICT entrepreneurs.
BTI might be a useful source to interview
1. SAITIS TOR FOR SMME SKILLS AND ENTERPRISE DEVELOPMENT
http://www.thedti.gov.za/saitis/Initiatives/Copy%20of%20ToR%20-%20Black%20ICT%20SMME%20v4p4.pdf
SAITIS PROJECT OFFICE Terms of Reference Black and Women ICT SMME Skills and Enterprise development Private Bag X84 Pretoria 0001 South Africa www.saitis.co.za Telephone: +27 (12) 310 1496 Facsimile: +27 (12) 322 4600
What happened to this initiative? .
2. PRESIDENTIAL NATIONAL COMMISSION ON SMMES IN ICT
http://www.pnc.gov.za/content/view/88/58/
OUTLINES who the players are and what the national agenda with regards to SMMEs in ICT is.
For context
3. Black and Women Indicates what the SAITIS
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Our Name for the resource Short Description Details How this is useful ICT SMME Skills and Enterprise Development Executive Summary March 2002
strategy was about.
4. Foresight ICT report This report addresses Information and Communications Technology (ICT), a unique sector because it represents a scientific discipline and industry in its own right, as well as cutting across all other sectors. Even a cursory glance at the other outputs reveals the all-pervasive role of ICT as we enter the information age
It was done in 2000, so is a little outdated.
5. USA Impact evaluation Powerpoint
Evaluate impact of Universal Service Agency (“USA”) on Universal Service and Access in South Africa. Focus on the period of 1997 - 2004. Benchmark USA against similar agencies in developing and developed countries. Pinpoint successes and failures of USA during its first eight years of operation. Inform stakeholders on USA’s achievements and shortcomings relative to the Agency’s mandate in the Telecommunications Act (as amended).
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Our Name for the resource Short Description Details How this is useful 6. SAITIS BASELINE
STUDIES: A Survey of the IT Industry in South Africa September 1999
This baseline study, a Survey of the IT Industry, is the first of a two-part study to provide an overview of the status of the information and communications industry in South Africa. These two studies feed into a three-year, $ 3,5 million Canadian) dollar programme called the South African IT Industry Strategy (SAITIS) project. SAITIS is being funded through a bilateral assistance programme launched by the Canadian International Development Agency (CIDA), in conjunction with the Department of Trade and Industry (DTI). Additional support has been provided for this baseline study the Acacia Programme of the International Development Research Centre (IDRC).
PROJECT TEAM: Tina James (IDRC) Philip Esselaar (Miller Esselaar and Associates) Jane Mosebi (Forge Ahead BMI-T) Angus Bowmaker-Falconer (Information Resources Group) Claire Sibthorpe (IDRC) Yokow Quansah (Information Resources Group)
Useful for defining the ICT industry
7. Survey of the IT Industry and Related Jobs and Skills in South Africa January 2000
http://www.thedti.gov.za/saitis/studies/jobs_skills/full-studies.pdf
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Our Name for the resource Short Description Details How this is useful 8. NEDLAC ICT
SUMMIT 2002 Plenary Session on behalf of Business
Lists the following associations active in the ICT industry * Information Industry South Africa * Information Technology Association * Black IT Forum * South African Communications Forum * Communications Users Association of South Africa * South African Value Added Network Services Association * Internet Service Providers Association * South Africa Cellular Service Providers Association * Electronic Commerce Association of South Africa * Computing Technology Industry Association * Geospatial Information Technology Association of South Africa * National Association of Broadcasters * Telecommunications Skills Development Forum * Electronic Industries Federation * South African Electrotechnical Export Council
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Our Name for the resource Short Description Details How this is useful * Smart Card Society of South Africa * Association for Services Management International * Telephone Services Association * The Infosecurity Organisation
9. IFIP Report by Computer Society of South Africa
Summary of 2000 SA IT industry programmes. The CSSA was actively involved in all of these efforts - either corporately or through individual members. This report will briefly refer to several of these projects.
10. SA Women in
Computing
This bibliography consists of a range of articles that consider aspects of gender and computing in South Africa.
11. Engendering Computing Toolkit
Worldbank
List of basic facts around disadvantaged groups and ICTs. Seems to be rather old.
12. Gender, ICTs and Entrepreneurship
Worldbank
Document that outlines how men and women differ in their access to, use of an benefit from ICTs.
13. Information communication technologies and the potential for rural tourism SMME
This article explores how information communication technologies (ICTs) can help tourismbased small, medium and micro-enterprises (SMMEs)
Author: France Bourgouin DOI: 10.1080/03768350220123864
2002 Source
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Our Name for the resource Short Description Details How this is useful development: the case of the Wild Coast
address their constraints to growth and development in rural South Africa. More specifically, it reports on research conducted in the Wild Coast region of the Eastern Cape province focussed on the constraints, and related information needs affecting the success of rural SMMEs operating in the tourism industry, and explores how ICTs might address these limitations. Within the context of the constraints faced by rural SMMEs, this article examines the information needs and current patterns of communication that impact on the development of the sector, the nature of tourism SMMEs in the case study area, and the potential use of ICTs to support tourism-based SMME development in rural areas.
Publication Frequency: 5 issues per year Published in: journal Development Southern Africa, Volume 19, Issue 1 March 2002 , pages 191 - 212 Subjects: Africa; African & Third World Politics; Number of References: 42 Formats available: PDF (English) Purchase Article: US$25.00 - buy now buy now add to cart buy now [ show other buying options ] purchase type customer type online access payment method price Single Article Purchase Personal 3 days credit card US$25.00 buy now buy now add to cart add to cart Issue Purchase
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Our Name for the resource Short Description Details How this is useful Any permanent credit card US$85.58 buy now buy now add to cart add to cart If you would like to pay in any other currency please see the purchasing help pages for more information.
14. Information and communication technology and small, medium, and micro enterprises in Asia-Pacific - size does matter
15. A framework for a generic business behaviour guideline (GBBG) for ICT organisations in the 'new' South Africa
Source Special Interest Group on Computer Personnel Research Annual Conference archive Proceedings of the 2006 ACM SIGMIS CPR
This paper reports on research in progress which investigates the need for a set of generic guidelines for acceptable business behaviour in Information and Communication Technology organisations in the 'new' South Africa. The investigation focuses on managers and employees in ICT organizations from before the democratic elections in 1994 in South Africa up to this day. It
Good list of appropriate references included too!
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Our Name for the resource Short Description Details How this is useful conference on computer personnel research: Forty four years of computer personnel research: achievements, challenges & the future table of
looks at the impact of different ethnic and individual cultures on different organisational cultures. Emphasis is placed on the impact of affirmative action (AA) and black economic empowerment (BEE) on ICT organizations and the perceived lack of skills and experience in affirmative action candidates. The inherently under-developed in interpersonal skills of many ICT professionals seem to aggravate the situation. Some organisations attempt to adapt their organisational culture to accommodate new ethnic cultures in the organisation. The purpose of the research is to determine the need for a set of generic business behaviour guidelines for employees in the ICT industry and to design the framework of a Generic Business Behaviour Guideline (GBBG) document/manual.
16. IT for Development Journal
Looks like a neat journal with appropriate international content.
17. Research to inform Strategic Policy and Initiatives for the Information and
Useful for the definition of the ICT sector. Also includes an overview of research on the topic
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Our Name for the resource Short Description Details How this is useful Communication Technology Sector in the Western Cape
18. Using Voice over IP to Bridge the Digital Divide - A Critical Action Research Approach
19. Using the Livelihoods Framework to Analyze ICT Applications for Poverty Reduction through Microenterprise
IDPM, School of Environment and Development University of Manchester Manchester, United Kingdom This paper provides a contribution to theorizing information and communication technology (ICT) and development by applying a livelihoods approach. This is found to provide the basis not only for an information-centered understanding of ICTs but also a means for broad and systematic analysis of poverty. The speciªc development issue analyzed is the role of ICT in microenterprise because microenterprise represents a viable route out of poverty through increased and more diversiªed income streams for poor households. A case study of Botswana is presented to demonstrate how the livelihoods
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Our Name for the resource Short Description Details How this is useful framework can be applied. This suggests that ICT applications may only bring marginal direct beneªts for poverty reduction. Viewed from the perspective of a livelihoods approach, greater beneªts for the poor may be derived from ICTs if they are applied to strengthen a broader range of social and political assets and if they are able to assist in building more effective structures and processes that favor the poor. The livelihoods approach is therefore able to identify information and ICT as only one part of a much broader development picture, and it avoids the overemphasis on technology that can beset some development informatics/ICT for development (ICT4D) research. Mainstream application of livelihoods ideas tends not to Engage explicitly with either information or ICT issues but the framework developed in this paper shows how such engagement can occur. It identifies both an analytical role for information/ICT that helps understand livelihoods of the
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Our Name for the resource Short Description Details How this is useful poor, and a functional role that uses these assets within livelihood Strategies.
20. South African 2004 ICT Sector Performance Review
Link Centre
The annual South African ICT Sector Performance Review (SPR) seeks to monitor and assess policy in the telecommunications sector – and where it overlaps with broadcasting and IT – against policy outcomes in the sector, and in so far as they impact on the economy and society. It does so by examining the performance of the sector in terms of delivery against national policy objectives. The study draws on the methodology developed by LIRNE.NET, an international ICT policy and regulatory training and research collaborative now consisting of Danish Technical University, Technical University of Delft, London School of Economics, the Wits University LINK Centre and, most recently, LIRNEasia based in Sri Lanka. The first baseline study for South Africa was conducted by the LINK Centre in 2003 and was followed with baseline studies in nine other African countries, including
Useful Report on access trends, development, growth, etc.
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Our Name for the resource Short Description Details How this is useful Botswana, Cameroon, Ethiopia, Ghana, Mozambique, Rwanda, Uganda, Tanzania and Zambia. These studies were undertaken by members of Research ICT Africa! a network of African researchers at 14 African universities (see www.researchICTafica.net for more information on the network and the country SPR case studies).
21. SMME SECOND PAPER Supporting Small Businesses in the Western Cape
John Oxford Eric Wood
This report is the second phase report for the project to develop a microeconomic Strategy for small business support. It follows the first phase report which provided an overview of the small business sector in South Africa and the Western Cape. This second phase report provides and assessment of current initiatives to support small businesses and outlines programmes to promote small businesses in the Western Cape. The report reviews the considerable array of national and provincial small business support. Strong evidence suggests small businesses are either unaware of the government’s programmes to support them or are skeptical
Outlines a bit how the SEDA mandate works
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Our Name for the resource Short Description Details How this is useful about their quality and effectiveness. In response to the perceived failure of many government initiatives to deliver quality support both national and provincial government are initiating new structures to provide centrally administered support to small businesses (nationally via the Small Enterprise Development Agency and provincially via the Real Enterprise Development centres – Red Doors).
22. ICT in South African Townships A means for women of small enterprises to run their business more efficiently?
Masters Thesis with some nice primary information
23. Government Policies on SME Development in the SADC
Objectives: This paper seeks to improve the understanding and effectiveness of Information and Communication Technology (ICT) policy, strategies and implementation for the development of Small and Medium sized Enterprises (SME) in the 14 countries of the
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Our Name for the resource Short Description Details How this is useful Southern African Development Community (SADC). Prior Work: This paper builds on existing ICT and SME policy and development studies carried out in the SADC region. The SME sector in SADC continues to dominate as the source of employment and poverty alleviation for the majority of people. However, there are still concerns about the slow progress in ICT adoption by SMEs. Approach: This study will gather data from the top decision-making and governmental levels in the SADC countries using surveys, interviews and document analyses. These methods will help to capture and record evidence from the different governments and SME sectors in the region. The technology supporting both generic and industry specific applications are reviewed in relation to the requirements of typical SMEs within the region. Policy comparisons with both
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Our Name for the resource Short Description Details How this is useful developed and underdeveloped countries are undertaken for reference. Results: Whilst governments of the SADC countries have put in place policies to foster the development of ICT within the SME sector, following the protocols and guidelines proposed by the SADC, the implementation has been slow. The supply push for technology implementation reflects a preoccupation of the SADC countries governments rather than requests from the SME sector. The paper identifies ICT needs and concerns of SMEs within the region. The plight of the SME sector continues to exist despite SADC innovations and support, showing a need to improve the policy intervention strategies for SMEs. Implications: The study will benefit policy makers, researchers and practitioners in the SME sector, particularly in the SADC region. By critically highlighting the ICT
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Our Name for the resource Short Description Details How this is useful adoption strategies which the Member States are putting in place, it will encourage SMEs to adopt and use appropriate ICT for their operations and development. The policy interventions need to be reviewed to consider how best the SMEs can benefit from the wide range of technologies available to facilitate their growth to achieve sustainability and reduce dependence on continued public funding. Value: The study will provide an initial evaluation of the effectiveness of SADC countries to provide support for the adoption and implementation of ICT solutions for SMEs. This will enable governments of SADC to review and revise policy implementation and development.
24. Position Paper for the South African Non-Governmental Organization Coalition $On Information Communication
Paper on how ICT impacts society
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Our Name for the resource Short Description Details How this is useful Technologies The Global Information Infrastructure And The Global Information Society
Strategies for Strengthening NGO Participation in the Digital World 25. Information Access
for Development: A Case Study at a Rural Community Centre in South Africa
This paper examines the theoretical linkage between ICT and advances within a business in a rural Community in the North West Province of South Africa. Various aspects are addressed like services and service delivery mechanism, locally adapted content and context, realistic approach To technologies and financial sustainability. A rural community centre in Itsoseng was investigated Regarding the above aspects and the results are provided. It became apparent that if these above aspects are not seen as integrated activities within a rural community, success is difficult to Achieve. Success in providing
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Our Name for the resource Short Description Details How this is useful human and institutional capacities that harness information and Knowledge is imperative.
26. Rethinking the High Skills Thesis
Andre Kraak, HSRC
The chapter then reviews the National Skills Development Strategy (NSDS) in this new theoretical light, and suggests that it is a good example of the alternate model proposed, which emphasizes simultaneous upskilling in the low, intermediate and high skill sectors of the South African economy. The analysis then goes on to interrogate the feasibility of this ambitious project. The chapter concludes that several structural factors – some global, others political, economic as well as operational – will act to limit this simultaneous multi-layered upskilling at the low, intermediate and high skill sectors.
ICT is constrained by lack of human resources.
27. VSAT Case Studies This document presents three casestudies on Very Small Aperture terminals, a technology that could help bridge the digital divide.
Only peripherally relevant
28. THE FIRST STATE OF LOGISTICS SURVEY FOR SOUTH AFRIICA
Sponsored by CSIR Centre for Logistics and Decision Support and Spoornet “The case for measurement and revitalisation of
Givers a perspective on how logistics might constraint growth of SMMEs. The issue of
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Our Name for the resource Short Description Details How this is useful 2004
basic logistics infrastructure in our dual economy” Given the socio-economic conditions and current spread of economic activity in South Africa, the small business development perspective is critical. The question is how to balance the national corridor competitiveness focus with sustainable SMME development (implying a need for access to the national logistics system). Information on these issues is very limited. We provide an initial overview, and hope to be able to analyse this in more detail in future surveys. These core structural problems can inter alia be attributed to the fact that we neglected to measure the state of logistics in our economy in the past – making macro logistics issues Invisible and disabling any attempt to develop policy and make optimal infrastructure investment decisions. We therefore petition for this survey to become an annual institution in South Africa. It will assist the country to develop strategically relevant policies, and to make
ICT capability is mentioned in passing
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Our Name for the resource Short Description Details How this is useful strategic infrastructure investment and maintenance decisions, which will in turn facilitate sustainable industry and small business development. Time series data will also enable us to monitor the success of these interventions over time.
29. Case study of Small enterprise support centre.
Masters thesis: Case study on the support provided by the Business Place
Masters thesis that mentions in passing how the business support centre’s access to ICT is useful.
30. Modern Energy: Impacts on Micro-enterprises Phase 1, Task 1.2 A Literature Review into the Linkages Between Modern Energy and Micro-Enterprise
Report based on South Africa and India that postulates that energy provision is linked to the development of micro enterprises. ICT is mentioned in passing, but the link is very clear.
Report for DFID Page three mentions how energy impacts on ICT sector businesses
31. Fitting the pieces together: A composite view of government’s strategy TO ASSIST THE UNEMPLOYED in South Africa 1994 – 2004 Judith Streak and Carlene van der
The paper has five parts, followed by a conclusion. Section one explains the ways in which government can work to assist the unemployed. It identifies two channels of assistance: measures to facilitate job-creation (indirect channel) and measures aimed at providing goods, services or income directly to the
Role of ICT as seen by government explained at bottom page 28 top page 29
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Our Name for the resource Short Description Details How this is useful Westhuizen1 12 October 2004
unemployed (direct channel). Sections two to five track the evolution of government’s development strategy, covering both the indirect and direct measures adopted over time. Section two gives a brief overview of the development strategy put forward by the RDP, highlighting those elements that have been taken forward in the subsequent design of government’s strategy to assist the unemployed. Section three describes the development strategy and the measures to assist the unemployed proposed in the GEAR policy document, released in June 1996. Section four considers how the strategy to assist the unemployed emerged in practice between 1996 and 2000. Section five gives attention to the post-2000 period. It asks how government’s development strategy and measures to assist the unemployed have shifted in emphasis over the last four years. The conclusion recaps the main points that emerge from the paper.
32. LIST OF ICT papers in
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Our Name for the resource Short Description Details How this is useful developing world
33. KZN economic review.
The Employment and Economic Policy Research division of the HSRC was Appointed by KwaZulu-Natal’s (KZN’s) Department of Economic Development and Tourism in September 2002 to undertake an economic review of the KZN province with a view towards establishing a provincial industrial strategy. The terms of reference are to provide a review of the KZN economy, in terms of the following key themes: � Growth in traditional and non-traditional primary, secondary and tertiary sectors; � Changes in industrial structure, within and between industries; � The contribution of nodal developments; � Firm access to new opportunities such as beneficial trade arrangements (e.g. AGOA); � Trends in labour absorption within the province; � Human resource development and take-up of Skills Development Strategy; � Impact of HIV/Aids on the KZN economy; and
Interesting, ICT is not seen as a key opportunity in KZN’s industrial review report? Again ICT is only mentioned in passing. This is an interesting finding all by itself.
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Our Name for the resource Short Description Details How this is useful � The contribution of public institutions in KZN in promoting economic Development.
34. ICT in Manufacturing
Information and Communication Technologies (ICT) are considered to be key for An advanced manufacturing strategy. ICT forms the basis for most advances in Manufacturing technologies. The scope of this document is to capture the base Technologies involved across all industry and technology sectors.
Have some interesting ideas for quick gain projects.
35. Prospects for the Digital Economy in South Africa Technology, Policy, People, and Strategies
This study explores the on-going development of a global digital economy through a case-study analysis of its impact on and prospects in South Africa. It argues that four factors are key to understanding the impact of the digital economy on a developing country: (i) the level of technology, including its information and communications infrastructure and system of production and distribution; (ii) the policy and regulatory framework and initiatives; (iii) the human capacity and income distribution; and (iv) the strategic
It would be helpful for prospective investors in ICT.
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Our Name for the resource Short Description Details How this is useful approach of the state in response to dramatic global and domestic processes. The paper explores these four factors in the Republic of South Africa, with a focus on the period 1995-2000. Data for the study are drawn from survey research, published reports from national and international bodies, scholarly journals, structured interviews, and participant observation. Key findings of the study are as follows: an insufficient information and communications infrastructure remains a barrier to growth of the information economy in South Africa, especially in peri-urban and rural areas; awareness of the importance of the information economy is growing, but current human resources and development strategies are insufficient to meet human capital requirements; significant efforts have been made in order to re-orient the South African policy environment into one supportive of growth in a global digital economy; and South Africa’s role as a leading African and
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Our Name for the resource Short Description Details How this is useful developing world economy places additional burdens on its need to engage in regional, and global policy formulation activities in support of the emergence of a new regime for global e-commerce that is supportive of the strategic goals of the developing world.
36. Discussion Paper No. 2002/77 The New Economy and Developing Countries Assessing the Role of ICT Diffusion
Using data from developing countries, this paper explores the nature and direction of the links between ICT diffusion and per capita income, trade and financial indicators, education, and freedom indicators. Internet hosts, Internet users, personal computers and mobile phones represent indicators of ICT. The Gompertz model of technology diffusion is used to study ICT dissemination. The results show that income and government trade policies influence ICT diffusion. Depending on the ICT indicator, Freedom indices may or may not affect ICT diffusion. Moreover, only personal computers and Internet hosts seem to have a positive influence on income. Contrary to expectations, ICT diffusion does not seem to
Mina N. Baliamoune * August 2002
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Our Name for the resource Short Description Details How this is useful enhance education.
37. The Role of Information and Communication Technologies In Global Development Analyses and Policy Recommendations
The United Nations ICT Task Force has an important role to play in clarifying such issues through the unique mix of experience and expertise it can draw on. Its mandate is to promote aware-ness, inclusive policies and innovative technological and business models. It serves as a focal point for establishing strategic direction, better co-ordination and policy coherence for the application of ICT to promote de-velopment. It lends a truly global dimension to the many efforts to bridge the global digital divide, foster digital opportunity and place ICT at the service of all the world’s citizens. It serves as a strategic tool of the United Nations system, and the global community at large, in achieving the goals of the Millennium Declaration. The Task Force utilises different methods to perform its mandate. It works through plenary meetings, informal consultations with stakehold-ers, as well as electronic outreach to broader
Section 5 is about business development and entrepreneurship
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Our Name for the resource Short Description Details How this is useful audiences across the world. It has launched a matrix of Working Groups and Regional Networks as plat-forms for the implementation of the overall ‘Plan of Action’. These Working Groups are now addressing a broad range of policy issues and have launched several major global initiatives on their own in the areas of policy and governance, e-strategies, capacity building, connectivity and access, and entrepreneurship. This book illustrates the contribution being made by the Working Groups as well as individual experts and those involved in the work of civil society organisations to promote that common agenda.
38. ICTS and Small enterprises in Africa
This project reported here investigates what role new information and communication technologies (ICT) may play in small enterprise development in Africa. Drawing on field research in Botswana, the project analyses the information and communication needs of these enterprises and assesses opportunities for ICT application. Information gaps are widespread
2001 publication of which I
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Our Name for the resource Short Description Details How this is useful and relate particularly to new markets, to finance and to skills. There is a strong reliance on informal information practices among all categories of enterprise. This has many positive features but there also needs to be a move to more formal information sources and to strengthening of information-providing business linkages. ICT have brought benefits but they are not a main priority for the majority of African small enterprises. There must be an equal – or greater – focus on other information-handling technologies, and an understanding of all the resources required to turn data into actionable decisions. Intermediated models of ICT are most suitable, but the intermediaries must be selected carefully. Different categories of enterprise need different information-related interventions. In particular, there is a danger of 'bringing business weapons to a welfare war': of imposing Western models of enterprise on vulnerable and
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Our Name for the resource Short Description Details How this is useful marginalised groups
39. FORESIGHT SYNTHESIS REPORT: DAWN OF THE AFRICAN CENTURY
This Synthesis Report condenses the work of the foresight project team; twelve sector working groups and three cross-cutter working groups into a document of some eighty pages. Their work has spanned a period of some two years and involved more than three hundred and fifty working group members and hundreds of other role players drawn from across the broader community. Scientists, engineers and technologists, social scientists, policy analysts, government officials, health practitioners, trade unionists, NGO staff and community activists have participated in this, the first South African National Research and Technology Foresight (NRTF) study. The NRTF project has been a significant learning experience for the participants. The various parties - benefited from exposure to new processes and ideas, not to mention the valuable networking that the foresight catalysed. It is intended this foresight will be not
Page 56 has a section relevant to ICT
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Our Name for the resource Short Description Details How this is useful be a one-off event, but the beginning of a continuing process that informs the functioning of the country's national system of innovation. The first stage of the work involved setting the parameters and scope of the study. An immediate decision had to be that of selecting for consideration the sectors deemed to be of most relevance to South Africa. These are: • Agriculture and Agroprocessing • Biodiversity • Crime Prevention, Criminal Justice and Defence • Energy • Environment • Financial Services • Health • Information and Communication Technologies • Manufacturing and Materials • Mining and Metallurgy • Tourism • Youth
40. African e-Index Towards an SME e-
The SME sector is where most of the world's poor are currently
THis looks like a key report
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Our Name for the resource Short Description Details How this is useful ACCESS AND USAGE across 14 African countries 2006
working. The SME e-Access and Usage survey was carried out by the Research ICT Africa! (RIA!) network in 14 African countries between the last quarter of 2005 and the first quarter of 2006. Its primary objective is to understand the impact of ICT on private sector development, and how ICT can contribute to a vibrant SME sector and economic growth in the context of developing economies. The countries covered included Botswana, Cameroon, Ethiopia, Ghana, Kenya, Mozambique, Namibia, Nigeria, Rwanda, South Africa, Tanzania, Uganda, Zambia and Zimbabwe. To this end, the SME e-Access & Usage survey was motivated by the lack of clarity about the impact of ICT on small businesses. The literature to date has failed to create a tight link between the use of ICT and issues
41. eGovernment, eHealth, Technology Enhanced Learning: Adoption in Mozambique, South Africa & Tanzania
This comparative report showcases the current level of national ICT and eGovernment, eHealth and eLearning adoption through presentation of relevant data and illustrative case studies,
Section 3 From page 32looks relevant to South Africa. In a broad sense. Not on SMES directly .
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Our Name for the resource Short Description Details How this is useful Comparative Report 2005
collected by responsible government and other appropriate trans-national organisations, with the goal of informing policy at national, regional and international level. While there is considerable ICT related activity in Mozambique, South Africa and Tanzania, the results of current and completed projects are not well documented. In addition, there are often different government stakeholders involved in projects, even within the same thematic area. While this presented a challenge compiling this report, it also provided an opportunity for the IST-Africa Consortium to interact with a variety of responsible government agencies and lay the foundation for future cooperation. Only through documentation of current initiatives is it possible to determine future ICT research collaboration opportunities.
42. Benchmarking the Plan of Action of the World Summit on the Information Society (WSIS) in Africa October 2005
The WSIS Plan of Action adopted 10 objectives to be achieved by 2015, and on the basis of these objectives, ECA sent out a questionnaire by fax and email to all the National Information and
P51 interesting stats on e-business
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Our Name for the resource Short Description Details How this is useful Economic commission for Africa
Communication Infrastructure (NICI) focal points in the 53 ECA member States, with a view to assess their commitment to the implementation of the Plan of Action at the national level. Th e objectives of the survey were to: • Measure the current level of implementation of these objectives in the African countries; and, • To use the outcomes of the survey to establish a road map for the realization of the Plan of Action plan in all countries by 2015. Th e questionnaire is divided into 12 sections based on the general objectives, goals and targets as well as the action lines of the WSIS Plan of Action. Th ese are: 1. General objectives, goals and targets of the Plan of Action; 2. The Role of Governments and all Stakeholders in the Promotion of ICT for Development; 3. Information and Communication Infrastructure: an Essential Foundation for the Information Society; vii Benchmarking the Plan of Action of the World Summit on the
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Our Name for the resource Short Description Details How this is useful Information Society (WSIS) in Africa viii 4. Access to Information and Knowledge; 5. Capacity Building; 6. Building Confidence and Security in the Use of ICT; 7. Enabling Environment; 8. ICT Applications: Benefi ts in All Aspects of Life; 9. Cultural Diversity and Identity, Linguistic Diversity and Local Content; 10. Media; 11. Ethical Dimensions of the Information Society; and 12. International and Regional Cooperation. The conclusions drawn from the survey provide a concise appraisal of the current level of implementation, as well as the challenges and the policy recommendations necessary to establish a road map for the realization of the WSIS Plan of Action in all countries by 2015.
43. South Africa: A Response to the APRM Questionnaire on
Page 150 interesting facts about SA and ICT. Also interesting references to follow up
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Our Name for the resource Short Description Details How this is useful Progress Towards Addressing Socio-Economic Development Challenges
44. The overall purpose of this report is to create an action plan for EDD (Enterprise Development Department) of DFID (Department for International Development) regarding ICT and small enterprise development (SED) with emphasis on growth- orientated enterprises (flyers). Further, to suggest best practice and priorities for intervention and possible project/programme support. Finally, to suggest further priority avenues of research in the area. Specifically, the report will illustrate how adoption of ICT within SED can further international development targets: by summarising existing work and innovations on ICT and SED and highlighting specific developing country applications of ICT for SED. The emphasis within the ‘flyers’ component of the study is to identify areas of direct ICT application, predominantly for formal sector
Very appropriate Report!, although a little old
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Our Name for the resource Short Description Details How this is useful enterprises. The focus, therefore, is on those enterprises that already have access to ICT or have the potential for direct access and application. This report considers four functional ‘action areas’ for ICT and SME development: § First, ICT as an enterprise output – SMEs producing hardware, software and telecommunications products. § Second, ICT as a primary, processing technology – SMEs providing data entry services, ICT-based business services, software customization, distance learning, etc. § Third, other ICT-related support activities – computer training, consultancy and other services. § Fourth, ICT as a secondary processing technology – covering communication (email/Internet/mobile), data processing (small business information systems) and ICT-based manufacturing systems (NC/CNC production systems, for example). The first three of these categories encompass the ‘ICT-sector’ and are primarily concerned with the production of
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Our Name for the resource Short Description Details How this is useful ICT goods and services. The fourth category includes all other SME sectors that are ICT consumers. Typically, in low-income countries, these would be predominantly service-based – including financial, business, and technical services, the tourist sector and importers/exporters. The report also acknowledges the need to refocus the debate surrounding the ‘digital- divide’ more centrally on issues of information value and ownership and transfer of knowledge and know-how. After all, ICT are merely a technology-based means of transmitting information, enhancing knowledge, increasing productivity or creating new products and services, and have no intrinsic value for development in them.
i Wikipedia website; http://en.wikipedia.org/wiki/Operational_Support_Systems; June 2007. ii Wikipedia website, http://en.wikipedia.org/wiki/Scalable_Video_Coding; June 2007. iii Data Pro Group official website; http://www.dataprogroup.co.za/investor/gloossary.asp; June 2007.
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iv OECD Directorate for Science, Technology and Industry; “Classifying Information and Communications Technology (ICT) Services”; 2007. v The South African Department of Communications; The First ICT Research Report; 11.05.2007; http://www.doc.gov.za/index.php?option=com_docman&task=doc_download&gid=9&Itemid=431; June 2007. vi OECD; “OECD Information Technology Outlook”; 2006. vii James, T; “SAITIS Baseline Studies: A Survey of the IT Industry and Related Jobs and Skills in South Africa”; SIATIS; January 2000. viii Department of Trade and Industry Official Website; SAITIS BASELINE STUDIES: A Survey of the IT Industry and Related Jobs and
Skills in South Africa; http://www.dti.gov.za/saitis/studies/jobs_skills/full-studies.zip; January 2000.