1. 1 Update on South African IT Market Adrian Schofield President Information Industry South Africa

2. 2 You have seen the movie …  One of 53 countries in Africa  46 million out of 800 million people  Main centres: Jo ’ burg/Pretoria (Gauteng) Cape Town (Western Cape) Durban (Kwa Zulu Natal – KZN)

3. 3 Software  $1.8 billion market, growing at 11.5% CAGR over next 5 years (mining, education, government & ERP application upgrades)  Exports only $70 million (6%), ¾ into Africa, then Europe  5 vendors = 40% of market (CA, IBM, MS, Softline, SAP)  Challenges: Fragmentation, lack QMS, poor marketing, low incentives, small VC market, skills shortage

4. 4 Other technologies  Small hardware market, mainly assembly, some PCB manufacture  Core competencies in electronics – defence systems, avionics, metering, satellite broadcasting, telecomms  Telecomms – 1 FLO (SNO coming) 4.5m lines, 3 mobile 15m lines. Challenge: cost  Broadcasters: SABC, e-tv, Multichoice, good radio networks.

5. 5 Employment  Overall, approximately 140 000 (0.3%)  >8 000 companies, mostly small  15 000 software developers, 1 000 co ’ s  85% of s/w co ’ s <50 employees, 50% < 10 employees  Telkom is largest employer, shedding jobs.

6. 6 Regulation  ICASA licences broadcasters & telecomms & other service providers  Many laws: Telecomms, Broadcasting, ECT, Interception & Monitoring, Public Access to Information, Convergence (Bill)  New challenge: Black Economic Empowerment (BEE)

7. 7 Initiatives  Skills: AIICT, JCSE, ISETT SETA (Learnerships), ISSA  Incubation: Innovation Hub, CSIR, CITI, DIT  Marketing: SAVANT/PSA, SAEEC  Employment: NEDLAC Sector Summit  Guidance: PIAC, PNC on ISAD, ICT Roadmap, e-Africa Commission (NEPAD)

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