SPEECH BY THE MINISTER OF COMMUNICATIONS, Dr IVY MATSEPE-CASABURRI ON THE OCCASION OF THE ICT SECTOR SUMMIT- 3 JUNE 2002, GALLAGHER ESTATE

Leaders of organized labour
Leaders of organized business
Leaders of community constituency
Ambassadors
Comrades, Ladies and Gentlemen

It was in October 1998 that a major gathering of South Africans was convened by former President Mandela on these premises to address challenges of job creation and retention, economic growth and development. The Presidential Jobs Summit agreed to pursue job creation initiatives in various sectors of the economy, particularly those with a high potential to create or lose jobs by holding sector summits.

Since the Declaration of the Summit was made over three years ago the Information and Communication Technologies (ICT) sector has undergone radical changes that are fast propelling our economy to keep apace with global economic imperatives. The social and economic impact of these changes on our people and those of our continent are phenomenal. As such, the ICT Sector Summit could not have been convened at a better time.

A cursory overview of our position in the regional and global sphere indicates that we are a developing country with an economy still largely driven by exporting minerals and agricultural products.

The global economy on the other hand is experiencing a major revolution transforming from an industrial economy to the one based on knowledge-ICT. The main characteristics of this information and knowledge revolution are globalization, high level of information infrastructure and convergence. The established national economies of yesterday are compelled at the pain of extinction to innovate as part of the global economic village. As a country too, we do not have a choice but to position ourselves to meet the challenges of global competition by developing ICT strategies that will ensure our competitiveness in the global market.

The key driver of this knowledge economy is the internet (digital) revolution characterized by the convergence of broadcasting, telecommunications and information technologies of all types. The challenge for the sector is to acknowledge and recognize the reality of globalization and knowledge revolution. It is not enough to recognize this reality but what is even more important is for us to size the advantages and to advance our cause for social emancipation, lest we run the risk of being victims of perpetual marginalization.

The knowledge economy has profound implications for all sectors of the economy as it is redefining the way, where and how people work, live and play. Its impact on our social life is already being felt especially in the world of work. While new jobs have and are being created there has been losses of traditional ones. As companies downsize, outsource in order to concentrate on their core business on the one hand there is a growing demand for a highly skilled workforce on the other.

Major international corporations in the telecommunications sector have in recent years, restructured and retrenched their workforce in big numbers as they re-engineer to embrace new technologies and adapt to the global market that is driven by customer tailored needs rather than technology. On the other hand, the global trend in technology advancement and emergence of new services and the way they are packaged has had positive spin-offs in the labour market.

The economic slump of the ICT sector has also compounded the situation further with the ranks of the jobless and unemployed being swelled to higher levels. The picture I have painted might appear rather dark if we use the either or approach. However viewed holistically the brighter side is emerging and growing and in the ultimate will dominate and take humanity to higher modes of life. I am sharing these perspectives with you knowing that among you are men and women of all races and colours who are passionate about the virtues of democracy. These are men and women who refuse to shirk their responsibilities in the face of adversities so that all of us can live a better life.

All these contradictions present a challenge to all social partners as to how they are managed while at the same time issues of development are tackled in a systematic manner. Together we can and shall rise to the challenge.

Government recognizes the centrality of telecommunications and IT Sectors in economic development. The Sector, according to government records, contributes about 4-5% of the Gross Domestic Product (GDP) and is estimated to generate about R4 billion annual turnover. It still remains the fastest growing industry. The government's policy of the telecommunications has played a cardinal role in revolutionizing the industry. The introduction of cellular telephony, the end to Telkom's exclusivity period and subsequent introduction of the Second National Operator and the envisaged licensing of operators in under serviced areas constitute changes of immense proportion. The impact of all these initiatives on the labour market are indeed massive. New jobs that are being created are sustainable and of high quality, decent work that has been the cry of so many. The regulatory environment within which the industry is operating is clearly defined and thus creating certainty that is what investors want and that will lend to even greater prosperity for us all.

Job creation and retention is a national, political and socio- economic challenge. If we are to meet this challenge cooperation between government, industry, organized labour, organized communities with the support of the public and the international community is indispensable. Let us seize this opportunity, as South Africans, to develop an ICT sector framework that gives overall direction to achieve the desired objective of sustainable economic growth and development. This framework must be able to address short, medium and long-term goals as the industry grows.

Human Resource Development is a critical element for sustainable at job creation and retention. Government has already taken giant strides in this direction with approval by Cabinet of the Human Resource Development Strategy (HRDS) for South Africa: A Nation AT Work For A Better Life For All. The purpose of the HRD is to provide a plan to ensure that people are equipped to participate fully in society, to be able to find or create work, and to benefit fairly from it.

In this regard you should align your initiatives with the national strategy by working closely with Departments of Education, Labour and the DoC that is providing leadership and coordination of efforts to ensure tangible results.

The National Skills Development Strategy (NSDS) represents another major intervention by government in the area of investing in people. The two overriding priorities addressed by this policy are:

• Ever present reality of the global economy and the imperative to increase skills to improve productivity and the competitiveness of the industry, business, commerce and services
• Addressing the challenges of social development and the eradication of poverty

These policy interventions offer ample opportunities and financial resources necessary to improve our country's dearth of skills in the ICT sector.

With the skills requirements having shifted dramatically from low to high skilled employment opportunities there should be a concerted campaign for a compressive re-skilling of the working people.

The analysis of employment and skills (supported by the SAITIS baseline Study 1999) indicated that the sector would have had about 20 000 vacancies last year. Many more professionals are needed in the sector. Various research projects also indicate that there is a growing need for highly skilled engineers, software developers, IT managers and technicians.

It is apparent that Human Resource Development is the most critical in the sector and in stimulating ICT usage in other sectors of the South African economy. Without a suitably qualified workforce in the science and engineering fields, international competitiveness will remain a mirage.

We should also take cognizance of other related phenomena, that is, inadequate education supply and the brain drain that is still continuing.

The unsatisfactory matric results in Mathematics and Science prevent further studies in the disciplines required by the ICT sector e.g. electronic engineering, software development, programming etc.

The ICT revolution has ripped apart the labour market that has resulted in a common pool of labour power to be bought by the highest bidder. At the same time our limited skills resources are subjected to severe strains on a daily basis by developed and developing countries who can offer attractive and highly competitive remuneration packages. To arrest this haemorrhage remains one of the most difficult challenges the country is facing, but it is not insurmountable.

Forces of globalization in this ICT age have been corroding big corporations with the consequent strong emergence of SMMEs as a growing economic sector and job creator. It has now become easier for SMMEs to emerge with little start-ups and grow to compete in the international markets.

According to the OECD, SMMEs contributed between 15% and 50% of exports two years ago, and between 25% and 35% of the world's manufactured goods.

In 1997 the SMME sector, in our country absorbed almost 57% of people employed in the private sector and contributed 42% of the GDP. Undoubtedly this sector is the future for economic growth and employment opportunities. It is thus of cardinal importance that the sector be supported by big business by outsourcing to local SMMEs and also through procurement policies of government and related institutions.

In addition there is a need to develop a program to train entrepreneurs in the skills of business and project management according to industry standards and business should take the lead in this important process.

The ICT infrastructure forms the backbone of rapid economic development. At the heart of this infrastructure is the ability to deliver broadband services anywhere and at anytime in the country.

The existence of infrastructure allows communities to be integrated in the mainstream of the local and international markets. This is especially crucial in our country that is still characterized by two economic systems existing side by side in one country. The hardest hit are the historically disadvantaged rural areas where infrastructure is either poor or non functional . Financial resources needed to overhaul the situation however proven to be a stumbling block. This environment makes it difficult for meaningful economic activity to take place thus further increasing the great trek to urban areas.

As government we have developed and implemented policies aimed at ensuring that such areas have access to infrastructure necessary for modern development. The managed liberalization of the telecommunications sector has been critical in driving infrastructure development and competition in the telecommunications arena. These policies find concrete expression in projects in the areas of telecommunications, broadcasting and postal service such as: telecenters, multipurpose community centers, public information terminals, citizen post offices , community radio stations and rollout of telephone services.

Our objectives to promote universal access are being realized through the implementation of these projects. In sum, the plight of under serviced areas is being put on the agenda; awareness of ICT benefits is being created in these rural communities; entrepreneurship is being promoted through ICT services and thus bridging the digital and knowledge divide.

All stakeholders, big business, SMMEs, organized labour and communities have a role to play in supporting these programs aimed at speeding up social progress.

The need for local and international investment cannot be overemphasized. Movements of investments are influenced by a multiplicity of factors especially in this era of globalization. Developing countries compete to attract such resources on the basis of innovative strategies and packages to ensure that investors get a good return on their investment. As stakeholders here we are individually and collectively responsible for marketing South Africa locally and abroad for purposes of attracting the flow of investments into our country especially in the area of tourism. Under -investment in the sector has to be addressed if we are to succeed in pursuing our transformation agenda.

While we are grappling with all of these sectoral strategies we should do so being mindful that our destiny is inextricably tied to the African continent as a whole.

All leaders of Africa and their governments, through NEPAD are seized with socio-economic transformation of the continent for the eradication of poverty, disease and ignorance. ICT has been identified as one of the key priority sectors to facilitate the implementation of the strategy for achieving sustainable development in the 21st century.

"The current economic revolution has, in part, been made possible by advances in Information and Communications Technology (ICT) which have reduced the cost and increased the speed of communications across the globe, abolishing pre-existing barrier of time and space, and in consequence affecting all areas of social and economic life. It has been made possible by the integration of national systems of production and finance, and is reflected in incredible growth in the scale of cross border flows of goods, services and capital," so declared African Leaders. Informed by this wisdom NEPAD identified ICT as one of its priority sectors to enable the continent to capitalize on ICT as a tool in enhancing livelihoods and creating new business opportunities. This unstoppable revolution is at the heart of African Renaissance as championed by President Mbeki. Solidarity of Africans across nationality and class has never been so important. We can only ignore or undermine this at our own peril much to the detriment of hundreds of millions of our people in Africa. The days of hand-outs and economic dependency are giving way to an era of Africans becoming masters of their own destiny as defined and understood by themselves. The spirit of Letsema/ Vuku'zenzele should be turned into a living reality in our workplaces and residential areas in order to lend a hand in pushing back frontiers of poverty.

Let the same spirit permeate this important gathering and spur us in deliberating issues confronting the sector so that we can produce a clear programme of action, with implementable projects within definite time frames. The summit is not an event but a process and should be seen and treated as such. The ultimate success of this important gathering demands of all us in making an unflinching commitment to the maximum unity of forces needed to make our sector and South Africa the economic success story worth bequeathing to generations to come. We dare not fail.

Thank you