Nicola Mawson
A nine-month study into South Africa’s digital economy has underscored its potential to add meaningfully to the country’s GDP, create jobs and transform the manufacturing sector, making the country more competitive.
The report, Our Digital Horizon, was launched yesterday in Sandton. Among its findings was that there was a vast potential to unlock the digital economy, which would boost its contribution to GDP from 0.02% in 2022 to 1.38% by 2035.
However, to achieve these targets, the contribution of digital platforms’ value-added contribution to the economy needed to grow 20 times over the next decade. GDP needed to accelerate by 3% each year, and there should be a stronger focus on digital skills, digital transformation, infrastructure, regulations, as well as small and medium companies.
Currently, the report noted, only 4% of South Africa's top 20 companies by market capitalisation are currently involved in digital technology.
While mobile connections have surpassed 187%, four out of five South African homes don’t have fast and affordable internet, while only one in ten have access to fibre or fixed wireless access, said the report.
The percentage of mobile connections is not the same as penetration, with StatsSA 2022 Census finding that 92.1% of households had a mobile phone, while Statista.com puts smartphone penetration at 27.22%.
Moreover, South Africa’s global competitiveness is at risk given the current lack of use of technology in this fast-paced environment, the report recorded.
Speaking at the launch of the report, which was developed by Naspers and the Mapungubwe Institute for Strategic Reflection (MISTRA), Phuthi Mahanyele-Dabengwa, Naspers SA CEO, said that decisive action was needed to ensure that South Africa reached its digital potential.
“Without sure-footed action, without decisive action, this vision will remain nothing more than a pipe dream,” she said.
MISTRA executive director Joel Netshitenzhe said, in a statement, that “there are vast opportunities before us and it is clear that a thriving digital platform economy could bring enormous value to South Africa. While the foundational elements are in place, significant barriers remain that hinder society from realising this potential.”
Netshitenzhe added that “the encouraging central message of the report is that solutions are within reach, but they require urgent collaboration and bold actions from all stakeholders.”
Evidence-based analysis is crucial, and the “ground-breaking” report provides vital insights and recommendations on a sector for which there is limited data, said Netshitenzhe.
Trade, Industry, and Competition Minister Parks Tau said in his remarks that "the advent of transformative technology – the Internet of Things, Artificial Intelligence, Robotics – offers the potential to revolutionise traditional industries”.
Tau added that that it was vital to address the digital divide between rural and urban areas as online platforms are reducing unemployment in various sectors such as in healthcare.
“South Africa needs to deepen its understanding of the digital economy and use data to address inequalities,” said Tau. He added that government, on its own, cannot drive economic growth.
In this regard, he said that research is important. At the same time, he said policies need to be informed through South Africa’s unique resources. Technology can “unlock transformative potential in industrial landscape,” Tau said.
Tau added that new technologies represent opportunities for growth and there is a need to identify barriers in businesses to enable them to grow. The report, he said, provides a basis for more comprehensive interaction.
At the same time, said Tau, regulations need to be alive in this nascent sector so that digital platforms can play a bigger role in the economy.
BUSINESS REPORT