ICT Sector Summit

June 3 &Amp; 4, 2002 At Gallagher Estate, Midrand

Address to Plenary Session on behalf of Business

By Adrian Schofield, President of Information Industry South Africa, past President of the Information Technology Association

Madam Minister, Distinguished Delegates

It is with some trepidation that I stand before you this morning with the duty of sharing with you the views of the Business grouping about this important event.

Organised Business, through Business South Africa, has long worked closely with the structures of Government and through NEDLAC to develop the economic health of this country, for the benefit of all. We fully understand the need for transformation into a fully democratic society and actively support initiatives that address the particular issues unique to South Africa's development needs. Specifically, Business supports the spirit of the 1998 Presidential Jobs Summit and recognises the vital need to create jobs in our search for ways to overcome the poverty suffered by a large proportion of our people.

We are delighted that successful models for this process of bringing economic sectors together for the purpose of developing appropriate actions to increase economic activity and thereby create and retain jobs have been created in other sectors, such as tourism and the motor industry. We certainly wish to emulate those successes in the information and communications technologies sector.

However, we face considerable challenges in mapping the path to that success. While we recognise that the convergence of technologies has brought together many of the interests of those involved with computers, software, networks, telephones, broadcasting and delivery systems, we have to accept that there are still wildly divergent interests and types of skills in this sector. The technologies are pervasive, that is, they impact on or are used in almost every facet of our lives - in business, in government, in communications, in entertainment - but the business models and groupings are still separated. How, then, can we expect to conveniently group together the interests of the stakeholders into Government, Labour, Community and Business?

It has long been one of the challenges for the ICT industry in South Africa that it is far from organised. Let me name just some of the associations that represent interests of companies operating in the sector:

• 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
• Smart Card Society of South Africa
• Association for Services Management International
• Telephone Services Association
• The Infosecurity Organisation

I know there are more and I apologise if you have been omitted! And that list does not necessarily address the interests of large users of ICT products and services in government, in banking and financial services, in mining, in manufacturing, in health and education. Nor does it include those bodies that have the interests of the individuals at heart, the aspiring and qualified professionals in the fields of technology and engineering.

One of the reasons that we support the need for research into the size and scope of the sector before making hasty decisions about the best way forward is that, even with the plethora of associations that exist, it is the nature of this industry that most companies are not interested in "joining" - they remain invisible as far as organised business is concerned. The majority of businesses are not the highly visible large employers like Telkom or Dimension Data - they are small to medium, with no resources other than those essential for business survival. It is the rare few whose executives can make the time to participate in stakeholder activities. In fact, it is their very lack of visibility that often leads us to believe that there is a dearth of SMME activity in the sector - when the reality is that about 80 percent of the companies in the ICT business are those whom we seek to promote.

Given the degree of fragmentation and the relatively short time frame in which the work leading to this summit has been carried out, you will understand that the contention between the stakeholders in the sector extends beyond the traditional philosophical differences between Business and Labour into the Business grouping itself. The small number of us actually involved in the Steering Committee and the Working Groups just could not hope to harness the opinions of the entire constituency. Some may find that we have been obdurate in our approach, many will accuse us of being too conciliatory - a case of "damned if we do and damned if we don't". The negotiation process has been a hard one for the Business group.

The NEDLAC environment is intended to lead the parties to consensus, that is, unanimity. Of course, we expected that there will be give and take and our small number of participants were often expected to show the wisdom of Solomon in responding to some of the proposals that were tabled. We also have to record that what we believed were agreements during the discussion stages of our meetings were sometimes translated rather differently in the minutes and the meanings changed yet again in the process of editing the agreement document towards its final version. These issues were exacerbated by the tight timetable imposed on the steering committee and the working groups, which often resulted in us working without benefit of the documentation from the previous sessions. In other words, we did not always achieve unanimity! It is our sincere wish that all the parties will recognise the shortcomings of the process that has led us to this point and that they will allow the post-summit processes to rectify those shortcomings.

We believe that significant numbers of jobs cannot be created artificially in a market-driven economy. Of course, it is essential that South African companies invest in the country's future - failure to do so will imperil their own future - and that such investment must consciously be directed at restoring our society to an equitable base. Job creation requires investment. We need to put out the "welcome mat" to domestic and foreign investors to encourage their active participation in the growth of our economy. It is only through growth that we can tackle the problems of poverty. We need a larger cake, not smaller crumbs from the existing one.

In our deliberations leading up to the summit, Business has maintained its concern that increasingly complex legislation and regulation inhibits growth and we remain cautious that some of the proposals in the Agreement may impede or discourage investment. We have also tried to secure a balance between the social imperatives and economic reality. We are also concerned that there may be too little recognition of the existing institutional framework, leading to unnecessary duplication of effort and dilution of scarce resources.

It is for these reasons that we urge the participants in the Commissions to examine closely the feasibility of the agreements and to seek ways of implementing them that will assure success. In particular, I call on the Business delegates to bring their wisdom and experience to the deliberations and to give the lie to last week's statement by the Director General for Trade and Industry that Business does not come to the table.

Mention of the Department of Trade & Industry leads me to another area of great concern to Business. I have already referred to the existing institutional framework and DTI plays a significant role in that framework. Most of you will have responded to the invitation to this Summit that included the first draft programme. A prominent feature of that programme was a presentation on the South African IT Industry Strategy Project (generally referred to as the SAITIS Project) and a series of short inputs from several stakeholders. We believed that these sessions would inform you prior to your deliberations in the Commissions.

Late changes to the programme which were not discussed in committee have resulted in the relegation of those sessions to a post Commission breakaway period and the excision of the SAITIS project from the programme and (almost) from the Agreement document. We believe that the important contribution made by the SAITIS Project cannot be overlooked. It does not make sense that the South African Government and the Canadian Government should have combined their resources over a three-year period, involving not only Government, but also Labour, Community, Academia and Business, to research the status and potential of our ICT industry, to put in place some of the very actions being proposed here and not have that valuable input in front of this assembly. In the three months that this Summit's Steering and other Committees worked on the issues, they benefited from one briefing session about SAITIS - in my opinion, scant recognition for R11 million rand and three years of work.

For those of you not familiar with the work of the SAITIS Project, I would like to outline what it examined and some of its conclusions and recommendations. When you are considering how to implement the Summit Agreement, please include in your consideration the wheels that have already been invented. The SAITIS project was conceived in 1995 by Mr. Jay Naidoo, Minister of Posts and Telecommunications at that time, and sponsored by Mr. Thabo Mbeki, then Deputy President. An important goal in conceptualising the project was to bridge the global development gap between the international ICT community and the South African ICT¹ sector.

Initial stakeholder meetings were conducted which resulted in the nomination of a group of 37 stakeholders as an Advisory Group to the SAITIS Project. This Group of 37 represented key organizations and agencies with interests in the ICT industry in South Africa and was specifically representative of the 5 stakeholder groups I mentioned earlier, as well as those promoting the interests of black and female members of our society.

Project participation of key stakeholders was maximised through the use of Strategy Working Groups and Workshops. This allowed stakeholders to take an active role in the development of key elements of the strategy. The Working Groups and Workshop sessions were developed as a participative process involving a wide range of stakeholders whose purpose was to identify, clarify and prioritise key issues. The Working Groups and Workshops conducted were:

• ICT Industry Working Group;
• ICT Usage Working Group;
• Human Resources Working Group;
• Innovation Working Group; and
• Indicators Working Group.
• Capital Mobilization Workshop;
• Infrastructure Workshop;
• International Markets Workshop;
• Women in ICT Workshop;
• SMMEs Workshop; and
• Management Skills Workshop.

Other key resources used in the development of this strategy were the Baseline Studies developed as part of the SAITIS project. The Baseline Studies provided the status of the South African ICT sector as a whole including a jobs and skills component. Other resources used were the Department of Communications' info.com 2025 program, the Foresight Project for the ICT Sector (sponsored by the Department of Arts, Culture Science and Technology), and, of course, GEAR (the Growth, Employment and Redistribution Program).

The SAITIS Project says that to develop a strong indigenous ICT sector, government and other stakeholders have recognise the need for a coherent national ICT sector strategy that leverages South Africa's strengths and ensures the involvement of the wider population in the development of a thriving ICT sector. The greatest implementation challenge will be to ensure economic growth, social upliftment and empowerment through a broad range of economically sustainable activities and projects. Implementation will require a high degree of collaboration between government, business, academia, labour, and civil society as well as substantial involvement at the community level. In this regard, the strategy:

• Identifies opportunities, including competitive niche markets for South African ICT companies;
• Assists in the development of government policies for industrial development;
• Provides a focus for national research and educational institutions involved in the development of the ICT sector; and
• Provides sustainable economic growth, social upliftment and empowerment.

The Project analysed global trends in the ICT Sector, reviewed the African regional environment and looked in detail at the South African ICT market. Included in that review were socio-economic factors, the manufacturing and services capacities, Government's use of ICT, the key players, innovation, policy and regulation and human resources.

Included in the studies carried out by the Project was a review of the current initiatives addressing the development of the ICT sector at provincial, national and regional levels. Of great significance was the review of policies impacting the ICT sector, including regulation and legislation. That particular report (which runs to 60 pages) shows that the business group is not the only disorganise group - it highlights the need for not only having Government policy towards ICT clearly the responsibility of the appropriate Minister but also having the legislation recognise the role of the other core Departments and agencies. I can rattle off a list almost as long as those associations I mentioned earlier: DTI, DACST, DPSA, DPE, DOL, DOE, SITA, SETA, ICASA, USA, NRF… need I go on? The report also sought provision for public/private partnerships and the implementation of co-ordinating and consultative mechanisms.

It might be argued that some of these recommendations have been addressed by the formation of the State President's International Advisory Council and Commission on the Information Society and the Minister for Trade & Industry's ICT Development Council - maybe even by the proposals within this Summit's document for an ICT Development Agency. We would urge Government to take to heart the statement in the SAITIS report that says, "Despite the fact that the absence of a co-ordinated governance structure has been identified at numerous intervals in the past as a glaring constraint to the development of the ICT sector, responses to correct the situation have been piecemeal, pointing to a tendency to avoid potentially controversial but inescapable issues."

The ICT industry in South Africa leaves a size 12 footprint but has only a size 3 shoe. As I said, it affects most sectors of the economy and influences more and more of our lives every day. It has the capacity to be the engine of growth, not only for our country but for the larger continent of Africa. For that potential to be realised, we need to undertake two principal activities: to positively promote business growth and to drastically improve the fundamental education and training mechanisms that will equip our current and future work force with the skills to take up the jobs that will be on offer. To put that in perspective - a developed economy will have between 5 and 10 times the number of skilled people employed in ICT as we do. Recent moves to equip schools with computers and software are a step in the right direction. However, before we talk about having the capacity to educate and train even a fraction of 300 000 to 400 000 new entrants to the industry, we first need to address the policies that will grow the industry to provide the jobs. That growth will not be fuelled by the ICT sector itself but by those who are its customers - government, business and community. Not only local customers but also those we will be cultivating in the rest of Africa. It is their ability to buy the products and services of ICT that must be enhanced.

As we deliberate the best ways in which to implement the proposals before you today, let us remember that we can learn from the success of others, we can create enabling legislation to support growth objectives, we can add promotional responsibility to regulatory authority and we must look to our legislation to signal our seriousness in creating a business-friendly environment to encourage ICT investment.

• Is there anyone here who doubts that the ICT sector is vital to South Africa's future? That it must grow to enable to growth of the overall economy? We may have arrived here by a flawed process and we may have differences about what constitutes an agreement, but let us:
  • Combine resources to positively influence government policy
  • Combine resources to minimise negative effects of regulation
  • Combine resources to minimise the talking and maximise the action
  • Combine resources to develop and preach positive messages about our ICT industry
  • Combine resources to formulate common thinking
  • Combine resources to grow the sector to the benefit of all

Let us follow the best advice we give when motivating our workforces - be proactive, invest wisely in the future and work together to solve problems, overcome challenges and make South Africa's ICT industry the engine for African growth.

Footnote

1. IT Industry - ICT Sector

   It is now acknowledged that there is no single IT industry but a range of industries that are commonly referred to as the ICT sector