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What are we doing wrong?

Mark Walker, IDC

Organisations should brace themselves for tough conditions in 2018, according to industry commentators.

Mark Walker, associate vice president for sub-Saharan Africa at the International Data Corporation, says while many organisations have already been expecting the worst and have planned for a downgrade, pricing pressures are set to continue in the ICT sector, particularly when it comes to hardware.

“If you consider GDP growth rate expectations for 2018, South Africa is looking at a growth rate of between 0.7 and 1.5%. So, many organisations are pricing this weak economy into their discussions as it does mean that hardware and imported equipment will be more expensive.”

Walker says in terms of GDP growth, the rest of the world is growing.

“The only places that are not growing are basically South Africa and Brazil, so that makes me question what we are doing wrong. That said, tactically, if you came up with an innovative solution and needed investment, you would take that idea overseas.”

Key conference

The African National Congress’s elective conference later this month also looms large.

Walker says should there be a negative perception - either in the way the conference is run, or because of the outcomes - the market will weaken further, resulting in more expensive IT in 2018. This will see the capex or hardware side becoming even more expensive, he predicted, adding this will mean an acceleration into cloud-based computing.

Should the general perception of the conference be positive, there could be an entirely different outlook. “We could see pent-up demand coming to the fore. Suddenly people are back on track, there will be a lot more investment and then an exact 180-degree picture emerges. The perception that South Africa is back on track could herald in a period of release of pent-up demand, investment, spend on innovation and rolling out the infrastructure to enable broadband in rural areas, fibre and others that the country gravely needs.”

Skills and innovation could also be affected by a weakened economy, says Walker. “We have already started seeing a trend emerge where you have individuals and organisations innovating locally, but then taking those innovative ideas and solutions overseas because they are not able to unlock investment in the local market. They are simply too far away from Silicon Valley, Cambridge or any other areas typically associated with investment finance.”

Transformation, empowerment

This year’s ICT skills survey, by Wits University’s Joburg Centre for Software Engineering (JCSE), says the demand for relevant skills - such as cybersecurity practitioners and software developers - will continue to outstrip supply.

Adrian Schofield, JCSE’s manager of applied research and author of the report, says while the stagnant economy continues to restrict growth in the demand for ICT skills due to limited budgets, the global recession of recent years seems to be abating.

“Demand in Europe and the United States for ICT skills is generally strong, yet despite this upswing, South Africa is lagging its peers in Africa (notably Kenya, Nigeria and Egypt) who continue to seek the value that technology adds to economic growth and social development.”

Schofield is also concerned at the delays in implementing policies, such as the migration from analogue television signals and the rollout of broadband networks which continues to frustrate the potential contribution of the ICT sector to the overall economy.

According to the Media, Information and Communication Technologies Sector Education and Training Authority, the ICT sector is estimated to contribute more than R250 billion (approximately 6%) to the country’s R4 trillion GDP.

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