IT market 'buoyant`

By Iain Scott, ITWeb group consulting editor

Johannesburg, 22 Feb 2006

The local IT market is close to where it was in 1998 and growing 8.5% a year, says BMI-TechKnowledge director Mark Walker.

The market was expected to reach R77 billion in 2010.

"Growth, innovation and market failure rates are where they should be for emerging markets," he told delegates at ITWeb`s IT Confidence conference in Midrand yesterday.

However, it was too early to become "irrationally exuberant", he warned, adding that there were several inhibitors to growth that still needed to be addressed.

While the country ranked in the bottom 50^th percentile in several areas of the World Economic Forum`s global IT report, it ranked 30^th out of 104 countries in terms of government policy, 32^nd in technological sophistication, 30^th in government online services, and 18^th in government procurement of technology.

"So we are doing a lot of right things," Walker said.

Several factors from this year and beyond would have an effect on the market, including the Soccer World Cup, government`s Accelerated and Shared Growth Initiative of SA, international investment in research and development, broadband adoption, and triple play (Internet, TV and telephone service in one subscription on a broadband connection).

The World Cup would have a significant impact in areas such as infrastructure, broadcasting, podcasting, narrowcasting, media content and streaming. "In integration and convergence, this is our final real test. We will lose our rating if we don`t get it right," Walker said.

[VIDEO]Other main drivers behind the IT market growth in the next few years would include government will, the rapid growth of the black middle class, improving innovation and inventiveness, and an increase in international competition.

"We do better when we compete," he explained.

However, there were still constraints that had to be overcome. These included funding and risk, resource availability, price pressure - especially in infrastructure, owing to international competition - and local distractions such as policy obstructions and regulatory roadblocks.