The local ICT industry appears to have little or no focus on research and development (R&D) relying mainly on imports, says international credit insurer, Coface, in its quarterly risk review.<\/p>\n
George Marais, risk analyst at Coface, believes this remains one of the major reasons why the ICT sector contributes such a small percentage to the country\u2019s GDP. \u201cIn addition, the industry is still facing a severe skills shortage; however, employee salaries are increasing at a rate that could soon negatively affect the industry.”<\/p>\n
Coface says that IT market revenues are expected to grow at a compound annual growth rate of 7,6% p.a. over the five year period, 2010 to 2015.<\/p>\n
The group puts South Africa as the 20th largest consumer of IT products and services in the world. \u201cStorage should out-perform other hardware areas due to continued virtualisation and cloud computing initiatives,\u201d it said.<\/p>\n
“The IT education market is of a high standard. This is prompting a growing number of post-graduates to enter the field. South Africa’s well-developed software infrastructure remains an international player and [is] recognised in the fields of security and payroll solutions. This positions SA well as a potential participant in the global market,”\u00a0Marais said.<\/p>\n
Marais further opined that South African companies are world leaders in pre-payment, revenue management and fraud prevention systems and in the manufacture of set-top boxes – all exported successfully to the rest of the world. The industry is characterised by technology leadership in electronic banking services, he said.<\/p>\n
Coface stresses that, despite the lack of focus on R&D, the electronics industry is growing at levels well-above the overall GDP growth rate. \u00a0“The sector is highly competitive, producing high value-added electronic products, and it\u2019s expected to continue showing strong growth in the future due to key competitive advantages specific to the country and the continent,”\u00a0Marais said.<\/p>\n
In May, a study\u00a0conducted by World Wide Worx for Google SA found that the total spend by SA consumers, SMEs, and government on products and services via internet in 2011 – as well as on Internet infrastructure – amounted to R59 billion.<\/p>\n
It noted further that South Africa\u2019s Internet economy contributes 2% to the country’s GDP, and is forecast to reach 2.5% by 2016.<\/p>\n
The Department of Science and Technology says South Africa has maintained a steady growth in R&D expenditure over the past decade,with gross expenditure on research and development (GERD) growing five-fold from R4 billion in 1997\/98, to R21 billion in 2008\/09.<\/p>\n
The ratio of GERD as a percentage of GDP, it said, has also expanded over this period – from 0.69% to 0.92%.\u00a0ICT GERD, as a percentage of GDP, was at 0.13% in 2008\/09.<\/p>\n
The Coface Group provides companies around the globe with solutions to protect them against the risk of financial default of their clients, both on the domestic market and for export.<\/p>\n
Each quarter, it publishes its assessments of country risk for 157 countries based on its knowledge of companies\u2019 payment behaviour and on the expertise of its 350 underwriters.<\/p>\n