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SA’s Digital Economy Plans

Last year President Ramphosa launched the 4IR Commission (this Newsletter has reported on that initiative). A new initiative has now come to the fore – SADA is a multi-stakeholder initiative to develop a forward-looking digital economy strategy for the country, convened by Genesis Analytics in partnership with the Gordon Institute of Business Science and the Pathways for Prosperity Commission at Oxford University. SADA has assessed where digital and other technologies could create work for South Africans. And, according to it, Genesis has since been appointed by the government to develop a masterplan for the digital economy.
The 3 key SADA findings were:

  1. SA can create 500,000 new jobs over 10 years through globally traded services. The first opportunity relates to the trend of ICT opening services that have been proximity-based but can now be provided anywhere in the world. SA has a small but growing global business-services sector generating 50,000 export-facing jobs. These can grow to 500,000 over 10 years. It will require SA to expand its market share of business-process outsourcing services in target markets, offer niche shared services, bring back work that has been outsourced, tap into the global demand for ICT and digital services, and innovate personalised and social services.
  2. SA can create work for low-skilled labour through digital platforms which are reducing many inhibitors that prevent markets from growing, such as information asymmetries, transaction costs and a lack of trust. These platforms can absorb labour in the informal and domestic economy. Digital platforms that aggregate and match demand and supply for low-skilled labour, or sell goods online with delivery services, create work for low-skilled South Africans. This is already happening in domestic services, transport and logistics, and tourism.
  3. Finally, SA can become a frontier technology hub for the region using AI, robotics and the internet of things to develop new digital business models. Their application can reshape how products and services are created and consumed.

SADA concludes that there is much work to be done for these opportunities to be realised. It requires investment, coordination and hard work. In the SADA strategy primer, 4 imperatives to get it right are outlined. These are –  digital inclusion, ensuring that every South African can access the digital economy; an education ecosystem which can generate talent;  government support, and innovative business.

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Alastair Tempest

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