A lack of awareness by clients of ICT's potential is one of the biggest restraints to growing the industry in the Western Cape, says international research firm Frost & Sullivan.
Presenting its findings of the Cape IT Initiative's second ICT census of the Western Province, Frost & Sullivan says potential clients are unaware of the potential of technology to act as an enabler for their businesses.
"Some potential clients are beginning to realise just how useful technology can be; however, the industry still needs to do a lot of education," says Frost & Sullivan industry analyst Lindsey McDonald.
She estimates there are about 3 000 IT companies within the province, employing between 7 000 and 10 000 people, making it one of the larger job creators in the province.
"The ICT industry is not labour-intensive. However, it is a business enabler and brings a number of key benefits and there is also a follow-through on indirect employment created from the industry's existence."
White males dominate the ownership and managerial positions of most of the companies, but McDonald sees this as a challenge rather than a problem.
"For the smaller companies with less than 10 employees, they can often be dominated by white males, but the medium and larger companies are making good progress to ensure far larger workforce inclusion and they have the depth of resources to do this."
The Frost & Sullivan report says there is still a widespread lack of knowledge in the industry concerning broad-based black economic empowerment and a desperate need for industry education.
The census notes the percentage of companies exporting software has fallen from 34% of the respondents three years ago, to around 22% of the current sample. The census says the most prominent challenges to exports include the lengthy payment processing times, limited access to clients, and a lack of knowledge regarding how to go about the exporting process.
Investment levels in the industry vary widely. Frost & Sullivan say this is because of the highly fragmented nature of the sector and the lack of a predominant model.
Securing investment was cited in the census as being a particular challenge. Some of the reasons are scepticism on behalf of potential investors, the conservative approach of local investors, and a lack of information regarding the types of investments available.
According to Frost & Sullivan, inhibiting factors for growing the ICT industry in the Western Cape include the slow decision-making process, limited access to markets, long hardware delivery lead times, and a shortage of networking and mentoring opportunities.
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