A pioneer in the world of business process outsourcing, Blake Holdings’ Chairman, Howard Blake, has a first-person view of South Africa’s place in the global ICT economy. He gives his views on where the country ranks in its innovation efforts.
In the wake of the World Economic Forum in Davos, we’re seeing many commentators, such as the Minister of Finance, Pravin Gordhan, discussing the strides Africa has made in the innovation stakes. But just how far has South Africa progressed, particularly when it comes to the rest of the world? Certainly, we are a nation on the rise. Last year’s Global Innovation Index (GII) ranked South Africa at 60th out of 141 nations. It was the second most innovative country in sub-Saharan Africa, behind only Mauritius.
Lessons from the island
Why does a small island nation rank so high when compared to the powerhouse of Africa? Having many years of experience developing technology-based businesses in Mauritius, I can point to a number of differences from South Africa that offer insight.
I believe the success of the nation’s innovation efforts relative to its size (1.3 million) comes down to the resources the government has poured into attracting specialist ICT skills from overseas. This has led to the growth of innovation nodes, such as the Ebene Cyber City, where these specialists can more easily share their skills with the local population.
South Africa, by contrast, has always relied on home-grown talent – Elon Musk and Mark Shuttleworth are the prime examples – who look to the rest of the world to deploy their technologies. There are numerous examples of ground-breaking technology that is initiated and developed locally and sold into European markets by established operators.
So what lessons can we take from Mauritius’s success? That attracting the rest of the world’s skills to us, can yield big rewards. Government has a key role to play in creating a more investor-friendly environment and setting up bespoke innovation and collaboration nodes. We also need to be creating a culture of learning and skills transfer.
Scale is everything
In both the GII and the Global Competitiveness Index (GCI) of 2015, South Africa performs well when compared to its BRICS counterparts. In both lists, South Africa ranks beneath China and Russia, and above India and Brazil. When looking at the relative size of each country – compare South Africa’s 53-million strong population to Russia (143 million), China (1.35 billion), India (1.25 billion) and Brazil (200.4 million) – it becomes clear that South Africa is punching well above its weight.
There is one major advantage that the other BRICS nations have, as their own innovation portfolios rise – scale of output. Realistically, we cannot compete against a billion-strong population on our own steam– they simply have more opportunities and far greater manpower.
However, Africa as a whole, is a different story. With a population in excess of a billion, it offers a breeding ground for ideas as big as India’s or China’s. By choosing to focus on serving and empowering the massive African market, we should see our innovation snowball and our global competitiveness in its wake.
The future of innovation
It’s clear from rankings like the GII and the GCI that South Africa has much to offer the world in terms of innovation. How then can we achieve that potential and top global lists in the future? There are a number of factors that could see us surge forward and become world leaders in the future.
The biggest is the shift from manufacturing- and resource-based economies to digital economies. In the past, South Africa has suffered from a lack of access to education and the resources necessary to bring new technologies into the world. But now, with the prevalence of mobile technologies and the opening up of information, anyone with a tablet and a thirst for knowledge has the potential to put into action a society-changing idea. Not only that, but they are more easily able to compete in technologically mature markets through digital fulfilment channels.
This innovation-friendly environment is only set to get more welcoming, as free Wi-Fi grows more widespread and data access becomes more accessible to the majority of the population. In addition, there are all sorts of initiatives in progress – both government and private – aimed at fostering innovation and attracting global investment. Despite our well-documented labour and educational challenges, the future is bright.
While South Africa has only started to be noticed as an innovation destination, we have a rich history of innovation with few resources. We have always been skilled at coming up with African solutions to uniquely African problems. Imagine that same tenacious creativity supported by educational resources and skills, and South Africa’s true potential to become a global powerhouse becomes clear.