Gartner warns against overbearing govt.
Technology research and advisory firm, Gartner has cautioned against continued extensive government ownership and overbearing presence of state owned enterprises (SOEs) in South Africa, if the country is to maximise its opportunities as a member of BRICS.
BRICS is an association of leading emerging economies, arising out of the inclusion of South Africa into the group in 2010, and includes Brazil, Russia, India, and China.
Speaking at the 2012 Gartner Symposium in Cape Town on Tuesday (28 August), analyst Partha Iyengar said that governments and SOEs were not as agile in adapting and changing to market conditions, especially in places where it had no business being there in the first place.
In terms of where South Africa was in its evolution this was a significant challenge that needed to be overcome, Iyengar said.
He noted that SA was not alone, with China facing the same problem
He said that its BRIC status should ensure increasing M&A by global IT enterprises into SA.
According to MD of Gartner Africa, Rene Jacobs, 75% of CEOs will investigate opportunities with BRICS countries. She added that emerging markets had greater relevance for developed markets.
“IT innovation has been one of the biggest drivers of economic growth over the last 30 years,” the Africa lead told the audience in her opening address.
Economic growth
Iyengar said that the BRICS alliance would enhance economic growth in SA, but it would also give rise to significant challenges. He added that, while a lot has happened, a lot more needed to happen and this is where the opportunity for SA could lie.
The analyst noted that the global economy was emerging from a “harrowing” environment. He continued, saying that many still suspected that economic challenges would continue.
However, data suggested that the longer term economic outlook was not as bleak. Iyengar opined that it was imperative for SA is to focus on that longer term future, to create a platform from which to leverage future growth.
According to Gartner, the focus on SA as a destination had increased dramatically, particularly from other BRIC countries.
Iyengar said that most countries would kill to have South Africa’s demographic pyramid, with a strong working age mix, and good male to female ratio split.
He said that a project like SKA could be used to develop skills, which remains a big barrier to real progress in the tech space in the country. Retention of a skilled workforce, particularly in the areas of engineering and technology was a big stumbling block.
The analyst maintained that the battle for the 21st century would be about access to a skilled workforce.
SA offshoring
Gartner estimates that South Africa’s offshoring sector is estimated to bring around 40,000 new jobs in the year 2015.
Iyengar said that employees in the offshore contact centre industry stood at 8,000 in 2010, but was expected to grow at CAGR of 30% by 2015 to reach 30,000.
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