'ICT sees jobless growth'

The Communication Workers Union (CWU) has described the ICT sector as one of jobless growth, saying it is problematic for the poor and working class in SA.

This is despite the Department of Communications' (DOC's) belief that the sector has the potential to create more than 1.5 million jobs over the medium- to long-term.

Speaking at the DOC's Information Society and Development multi-stakeholder forum this month, CWU spokesperson Richard Poulton said the union sees the sector as a strategic one.

“ICT has become an important catalyst in socio-economic development.”

He explained that revenue of the ICT sector has grown from about R7 billion in 1997, to more than R100 billion in 2009 and is still growing. Its contribution to GDP has also grown from about 2% in 2002 to over 10% in 2008, according to Poulton.

Poulton said the sector is, however, problematic, because it is one of the sectors that grow without creating jobs.

He used Telkom's revenue growth in relation to its number of employees to emphasise his point.

The telecoms giant says in 1996 its number of employees was 58 793, while the group revenue was R13.3 billion. In 2010, its number of staff dropped to 23 247, while its revenue grew to R37.4 billion.

However, the phenomenon is not a steady one across all ICT companies.

Altech's revenue in 2001 was R3.691 billion and its revenue at the end of February last year was R9.2 billion. In this case, revenue growth was simultaneous to staff growth from 2 685 in 2001 to 4 041 in 2010.

Gijima's revenue grew from R1.5 billion in 2001 to R2.9 billion in 2010, and its staff count grew accordingly from 2 355 in 2001 to 3 655 in 2010.

MTN SA's revenue in 2001 was R7.9 billion and in 2010 it was R35.8 billion. Its employee number grew from 3 408 in 2001 to 7 257 in 2010.

The same staff growth is evident for Vodacom SA, where the figure grew from 2 207 in 2001 to 5 059 in 2010. Revenue grew from R10.5 billion in 2001 to R50.4 billion in 2010.

He said, according to the Department of Economic Development, among the top 10 imports from China are cellphones and phones; computers; printers; televisions and monitors; and computer and cash register parts and accessories.

“It is clear from this information that the ICT sector imports most of the equipment it uses in its day to day running of its business. As a country, we will never be able to turn the tide against job losses and jobless growth unless we transform the economy.”

He suggested that government and the ICT sector must support the development of the local electronic manufacturing sector and a software development sector with local intellectual property, so as to ensure the creation of decent work.

“We live in a country with an unemployment figure of 25.3%, which is the official figure, but this figure rises sharply to 36.6%, if the inclusive definition is used (inclusive of those who have given up looking for work),” said Poulton.

He added that SA's inequality has surpassed Brazil's, making SA the most unequal country in the world.

The spokesperson suggested the role of the state in the sector must be clearly defined so that it can intervene and tackle unemployment, inequality, poverty and the rural-urban development divide as well as the digital and knowledge divide.

“It has been proven that in developing countries where the state plays an integral role in ICT, many jobs were created.”

He also said the Independent Communications Authority of SA must play a role in the sector's job creation.

“It must ensure that it is not only an agent of globalisation, but regulates the sector in such a way that it contributes to the developmental agenda. The pending local loop unbundling has the potential to put thousands of workers out of jobs if not managed correctly.”

Speaking at the same forum, communications minister Roy Padayachie said the new rural ICT development strategy has a focus on ICT SMME development, including business incubation and e-cooperatives growth targeting the unemployed.

He also stressed the importance of electronics manufacturing with an intention to create more than 2.4 million jobs through the digital terrestrial television set-top box manufacturing scheme.

The DOC believes the ICT sector has a potential to create more than 1.5 million jobs over the medium- to long-term. “This will also increase the contribution of the sector to the GDP,” said Padayachie.