SOUTH AFRICAN IT INDUSTRY STRATEGY SAITIS BASELINE STUDIES

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SOUTH AFRICAN IT INDUSTRY STRATEGY (SAITIS)
BASELINE STUDIES
Presentation to African Development Forum Addis
Ababa, Ethiopia 25 - 29 October 1999 Tina James
International Development Research Centre
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SAITIS PROJECT

• Funded by Canadian International Development
  Agency (CIDA)
• CAD 3,5 million over three years
• Baseline studies funded by CIDA, with additional
  support from the Canadian International
  Development Research Centre (IDRC)

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BACKGROUND - ICT INITIATIVES

• Foresight 15 - 20 year forecast for ICTs in
  South Africa
• e-commerce policy 1999 - 2000
• National Qualifications Framework
• creation of ICT sector education and training
  authority - SETA
• State IT Agency
• Donor-related activities e.g. Acacia, ICT-Scan
• South African IT Industry Strategy

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SAITIS BASELINE STUDIES

• Two major components
• Overview of the IT Industry
• Overview of ICT-related Jobs and Skills
• Also addresses
• issues and challenges
• future requirements for an ICT strategy
• recommendations and actions
• stimulate debate in SAITIS Working Groups
• Website available by end of 1999

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METHODOLOGY

• SAITIS Baseline studies
• Methodology based on
• about 40 Interviews
• 4 discussion Groups (8 - 12 per group)
• review of secondary sources
• mailscan (about 3 500 sent)
• feedback to SAITIS Working Groups

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STRATEGY DEVELOPMENTMETHODOLOGY
Constraints
Internal Situation
Industry Strategy
Issues

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

Implementation Planning
External Factors
Where are we now?(Situation Analysis)
Where do we want to be?(Goals Objectives
Framework)
How will we get there?(Strategy Development)
What are we going to do it with?(Tactical Plans)
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SOUTH AFRICAN POPULATION DISTRIBUTION BY AGE AND
GENDER
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SOUTH AFRICAN DEMOGRAPHICS

• Population size About 41 million
• Urbanisation 54
• Literacy rate 61,4
• 46 of population live on or below subsistence
  level
• One of the highest GINI coefficients
• AIDS-related deaths in 1999
• 400 000 per year
• expected 800 000 - 1 million per year
• infection rates in excess of 23

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Some Characteristics of the
South African ICT Sector

• Dynamic

• Users of Technology - not Innovators

• Distribution Oriented

• Large Number of early adaptors - GSM and
  Internet

• Telecomms Liberalisation started - pace
  will increase

• Effective Control by Few Players

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IT Industry Spend (US 000s)
1992 1993 1994 1995 1996 1997
IT Hardware IT Software IT Services
Office Equipment Internal Telecomms
TOTAL IT Spend
1227 1321 1558 1525 1631 1717 287 330 386 456 633
669 876 938 1100 997 1202 1472 131 138 170 158
148 155 1212 1295 1328 1446 1485 1526 2666 2847
3023 4068 4185 4149 6400 6869 7564 8649 9283 9690
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Forecast Growth in Overall SA IT Vendor Revenues
1985 - 2002(1 US 6 SA Rand)
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Number of South African Households with Internet
Access
1996 1997 1998 1999 2000 2001 2002 2003
Households with Internet access in the home
0.5 1.8 4.1 6.0 7.4 8.2
9.2 10.5
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Why an IT Jobs and Skills Survey?

• Data required on
• Jobs available and planned for
• IT industry (hardware, software, etc)
• IT users (NGOs, associations, govt)
• Current trends in supply/demand
• Income levels
• Emigration / immigration statistics
• Brain drain
• Jobs profile
• part-time / contract / full-time
• turnover rate
• average length of service

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Why an IT Jobs and Skills Survey?

• Data required on
• Current skills levels
• Future skills requirements
• Training time
• IT training spend
• Labour Intensivity
• Unionisation
• Pipeline of potential skills
• Little available at the detail required for
  SAITIS Baseline Studies

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FRAMEWORK FOR JOBS / SKILLS SCAN

• Based on IT NATIONAL QUALIFICATIONS FRAMEWORK
  DOMAINS
• Information Systems and Technology Management
• Systems Development
• End-user computing
• Data communications and networking
• Computer operations
• Hardware and computer architecture
• IT education, training and development
• IT sales and marketing, Other

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MAILSCAN

• Data analysed
• Employees by race / gender
• Temporary / permanent employees
• Vacancies / Terminations
• Employment in 5 years time - forecasts
• IT Training spend
• Outsourcing
• Social responsibility
• RD, etc.

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Employment of Professionals1998 - 2003
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CURRENT AND FORECAST GROWTH - ENGINEERS
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CURRENT AND FORECAST GROWTH - IT PROFESSIONALS
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MIGRATION FIGURES - 1997

• Occupation Emigration Immigration Net Migration
• Engineers 428 99 -329
• Medical Practitioners 73 45 -28
• Medical Specialists 26 4 -22
• Dental Professions 58 2 -56
• Education Related 353 125 -228
• Accountant related 277 27 -250
• Other 962 305 -657
• Managerial 885 357 -528
• Artisans 371 111 -260

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SUPPLY / DEMAND TRENDS

• lt four years in service
• IT imported skills too expensive short-term
  contracts
• Business services subsector is fastest growing -
  32 growth over five years
• Banking sector - 50 growth 1998 - 2003
• Demand for all IT professionals - 50 growth
• Need for experienced staff at senior level
• Combination of business/ technical skills
  required
• Oversupply in some areas e.g. MCSE

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HR STRATEGIES in the IT INDUSTRY

• Salary structuring
• Name your price gt huge salaries
• Innovative package structuring

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HR STRATEGIES in the IT INDUSTRY

• Retention strategies
• Cross-skilling
• Increased emphasis on training
• Career planning
• Internal promotions
• Working environment
• flexibility / working at home / prestige /
  holiday leave / promotion potential / share
  options
• challenge of the job is important

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EMERGING THEMES
LIBERALISATION OF TELECOMMS INDUSTRY
DEVELOP APPROPRIATE SKILLS BASE
DEVELOP STRONGER ENTREPRENEURIAL BASE
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FOUR CLUSTERS
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GENERAL ISSUES

• Need for a national strategic vision
• no national objectives
• lack of coordination
• education and training must be part of the
  national IT strategy (not separate initiative)
• Indicators are problematic
• Cannot read the changing character of the IT
  industry
• Difficult to assess current status in a
  meaningful way
• Comparing apples with pears - inconsistent
• No coordinated effort (yet) to streamline
  activities relating to HR measurement

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HUMAN RESOURCE DEVELOPMENT

• Education and Training
• all levels (primary / secondary / tertiary)
• coordinated pipeline of skills development
• stronger government/ private sector /educational
  linkages
• create IT apprenticeships /proposed learnerships
• private sector to develop mentoring schemes
• vendors to play a stronger role in training
• government to play a more prominent role model in
  IT adoption and usage
• short-circuit training to alleviate short-term
  needs
• multi-skilling to be encouraged

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HUMAN RESOURCE DEVELOPMENT

• Brain drain
• Worldwide phenomenon - SA no exception
• Official figures about 35 of actual (233,609
  compared to 82,811)
• Need to develop different strategies
• Recruit IT staff from other counries
• Use ex-South Africans or those still working
  outside SA
• SANSA initiative
• ?

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CREATING AN INFORMATION SOCIETY IN SA

• Universal access
• Increase pool of IT-literate South Africans
• Creating general IT awareness
• Massive IT awareness campaign
• Working for Water model gt Working for
  Information programme
• Promotion of IT-literacy promotion on TV soaps,.
  etc