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Is SA ready to be a knowledge economy?

By Richard Firth, Chairman and CEO, MIP Holdings


Johannesburg, 05 Mar 2015

Much has been made about South Africa's impending transition to a knowledge economy. In fact, it was the focus of 2012's National Science Week. While government initiatives set to improve the country's science and technology output are laudable, the question must be asked: is SA ready to transition to a knowledge-based economy?

There is no doubt that such a move has myriad advantages. Statistics show that a knowledge-based, rather than a resource-based, economy is ultimately more beneficial to the citizenry, and more sustainable, since innovation is an infinite resource.

But that's not to say South Africans are incapable of innovation. Pratley Putty is the only South African product to have been on the moon; Nobel-prize-winning Allan McLeod Cormack helped develop the CAT scan; and the importance of innovators like Christian Barnard and Elon Musk cannot be overstated. But a huge part of the country is lacking many basic academic skills, says Richard Firth, Chairman and CEO of MIP Holdings.

Initiatives like the Square Kilometre Array radio telescope project show there is hunger and opportunity in SA for R&D, but the failure of the Joule electric car shows that regardless of how much incentive and support is given, innovation can't be forced. If the country's education issue is not addressed from the grassroots level, the majority of the population, with a basic education, will find themselves unemployed and alienated in an economy based largely in science, technology, engineering and maths (STEM), which will be peopled entirely by the privileged few.

Even access to knowledge is proving somewhat difficult - few public schools have a comprehensive computer literacy programme, and its prohibitively high price and below-average quality mean Internet access is limited. In fact, South Africa is only fifth on the continent in terms of access to broadband. To create a generation of learners who will benefit from a knowledge economy, SA first needs to create an environment in which a STEM education is attainable for the average citizen. To make science and technology a part of life, it has to be accessible.

Countries such as India and China have managed to grow their economies drastically by focusing their efforts on one crucial element to creating a knowledge economy - equipping the workforce with appropriate skills. In India, the number of institutes of technology more than doubled from 2007 to 2012, from seven to 15. There has also been a steep rise in the number of people enrolled in engineering: in 2007, they were 13% of students. By 2012, this was 25%.

Maths and science skills are neglected in South Africa, with disheartening statistics emerging every year. The level of English education is also lacking. Mother-tongue education is crucial in SA, but it's undeniable that English is the lingua franca of modern business. Most computer languages require a level of understanding English just to become a computer programmer. We need to make the hard decisions now, as we are not big enough like China, which can drive its own language into the technology arena.

If SA is to become a knowledge economy, we need to start at the beginning: the lofty aim of a knowledge economy is admirable, but we need to address the fundamentals - the future workforce.

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MIP Holdings

MIP Holdings is one of the world's leaders in the provision of 'risk-based' billing services to mainly, but not exclusively, the financial services industry. The company designs and develops software solutions that focus on the collection of contributions and payment of benefits in the healthcare, employee benefits, and life assurance, as well as in personal finance, integrated lending systems and treasury.

With a focus on meeting client-specific requirements and through extensive investment in technology, MIP 'future proofs' its solutions. Strict adherence to industry standards, as well as stringent internal control over standards and quality assurance, ensure the systems MIP develops meet all client expectations.

Expanding into the telecoms sector through its purchase of Itemate, MIP Holdings provides telecoms operations and management solutions to communications service providers worldwide. The company's specific skills in the area of mobile pre-paid value chains, pre-paid product life cycle management analysis, voucher management systems and mobile financial services enable it to provide an end-to-end service. It's most recent acquisition, Waytag, further enhanced the company's ability to provide a comprehensive solution to its clients through the unique Waytag offering of location-based services.

MIP Holdings was founded in 1989 and is based in Johannesburg, South Africa, with additional offices in Cape Town.

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