Research on the Performance of the Services Sector

Role players or key stakeholders

There are many role players and key stakeholders within the ICT industry, each one contributing in its own way to the industry. Main Role players and stakeholders include the government and governing bodies, large corporate, international software companies, small businesses and several ICT initiatives (government and private owned), all of which comprise the ICT industry and the various goods, services and processes which define it.

5.13.1. South African Government

One of the most prominent and influential role players and stakeholders for the ICT industry is the government. The government (on various levels: national, local, municipal) has authority over many activities within the industry through legislation e.g. broadcast legislation from the governing body ICASA which allocates broadcast spectrum and dictates broadcast law⁸⁴.

The government is a key stakeholder because it can benefit from the use of ICT products and services and, at the same time, supporting the ICT industry can benefit the economy and subsequently benefit the government. Developing the industry is highly beneficial to the economy, the government and the country as a whole; as such, it is important for the government to play a role in stimulating the industry. The Department of Communication, therefore, stresses the importance of government and the private sector working together to optimize growth and development within the industry and the economy as a whole⁸⁵. Several projects have been launched to ensure that this partnership between government and the ICT industry is effectively beneficial and ongoing. For example, E-Government initiatives being launched: millions of Rands have been allocated to the ICT sector by government to implement new information technology systems for government administrative processes.

These E-Government initiatives are mutually beneficial to both the government and the ICT sector: the ICT Sector gets paid by the government and jobs are created and business is acquired through these projects, so the ICT sector is benefiting; and the government benefits through improved service delivery, more efficient systems and a more stimulated economy⁸⁶. Another instance of the mutual development and support between government and the ICT industry is government subsidy of Set-top boxes (STB) for the analogue-digital broadcast migration: this partnership in production benefits both the ICT industry and the government through stimulating the industry and the economy and delivering services to society simultaneously.

5.13.2. International Software Companies

In an increasingly technologically aware and dependent economy, information and communication technology and software is becoming increasingly valuable and important. The local ICT industry recognizes the value of software development and retail as it has grown extensively in recent years⁸⁷. The value of international software companies to local ICT industry is visible in that Microsoft, the biggest international software company, announced in 2010 that it would be investing R425 million in local software companies to develop them into globally competitive players as part of their empowerment strategy⁸⁸ this shows the influence of international software companies to the local ICT industry and its development.

Established Corporate

Large corporate have a huge need for ICT services. Many large companies outsource non-core ICT work processes to ICT companies; this creates a market for the ICT services sector and can provide job creation potential. Many corporations are reliant on IT, networking and technologies and therefore require ICT support, network support and other services from ICT service providers; as such this outsourcing constitutes more than a third of the ICT services market⁸⁹.

SMMEs

Small businesses are playing an increasingly large role in the development of South Africa’s ICT industry in that they too require many ICT goods and services for the running and maintenance of day-to-day business in today’s information society. For example, new registrations of close corporations between 2007 and 2008 increased from 250 000 to 280 000. Many new businesses that launch require ICT manufactured goods such as computers, phones, and fax machines and require continuous ICT services too, such as network and IT support. This growing market represents a huge opportunity for a growing ICT goods and services market- apparent in the sales of PCs and laptops increasing by 15% a year and the number of computer users increasing exponentially over time⁹⁰.

Public/Private Sector Partnerships

Both private and public sector organisations play a powerful role in the ICT industry in South Africa through helping ICT companies in various capacities.

An example of a government-owned initiative aimed at assisting various industries and promoting development on a national scale, is the National Empowerment Fund (NEF), which has a preferential procurement fund that offers financing and loans to black-owned businesses that have been identified for service contracts or tenders and who need this capital to ensure effective delivery.

Provincial Role players and Stakeholders

On a provincial scale, many provinces offer services to the ICT industry- these play a powerful role in assisting and developing the industry. For example, the Free State, Eastern Cape and Gauteng each have ICT assistance and development bodies: The Free State Development Corporation (FDC), The Eastern Cape Development Corporation (ECDC) and The Gauteng Enterprise Propeller (GEP). These government bodies provide small enterprises with business support and finance, helping the development of small ICT businesses and the industry overall.

Blue IQ

Government and private sector have also formed partnership bodies which assist the ICT industry. For example; in Gauteng, Blue IQ is a government-private partnership which falls under the Gauteng government. Blue Catalyst is a branch of Blue IQ and it provides entrepreneurs in the ICT industry who are starting technological businesses with “smart ideas” with a network of funders and mentors for their assistance.

The Innovation Hub

The Innovation Hub, based in Pretoria, is another such partnership between government and the private sector which assists the ICT industry. This initiative is also funded by Blue IQ, falling under the Gauteng government. The Innovation Hub is a “Science Park” with international accreditations- it provides entrepreneurs in the hi-tech ICT industry with networking and face-to-face as well as virtual support of their business support and business incubator services.

SAVANT

The South African Technology Vanguard (Savant) is another public-private partnership which assists the local ICT industry through local and international marketing. The aim of this initiative is to develop and strengthen the South African ICT sector and empower it as a globally recognized competitor.

Private sector organizations and bodies also seek to help the ICT industry in various capacities and stimulate growth and development in the industry throughout the country. Examples of these include;

Cape IT Initiative

The Western Cape’s “Cape IT Initiative” is a section 21 company which aims to assist companies in the ICT sector through networking and mentorship.

Internet Service Providers Association (ISPA)

The Internet Service Providers’ Association (ISPA) is a non-profit South African Internet industry organization. The organization’s members include educational networks, commercial service providers and non-profit providers. This body represents an important network of Internet service providers within South Africa’s ICT industry.

Information Technology Association (ITA)

Information Technology Association (ITA) is a body which represents ICT companies who supply IT equipment, systems, software and services within the industry. This body lobbies government and provides a mentorship and support programme called Phakisa- this initiative is aimed at small companies within the ICT sector.

Information Industry South Africa (IISA)

The Information Industry South Africa (IISA) is a body which compiles a comprehensive list of the associations within the ICT sector. It facilitates networking between these associations and promotes the expansion of ICT networks and partnerships.

Bandwidth Barn

The Western Cape’s “Bandwidth Barn” is a Cape Town based initiative which provides business support as well as rental space to small ICT companies, stimulating growth and development for these small companies and the industry as a whole.

Innovation Fund

The Innovation Fund is an initiative which finances the patenting of new technologies which have been developed by entrepreneurs and companies.

5.14.10. ISETT

Isett is the local ICT’s Sector Education Training Authority. Through this organization, local ICT business owners can organize training and learnership programmes for their businesses. This body oversees training initiatives in the ICT sector and provides a valuable service in terms of skills development in the industry⁹¹.