Local software development presents challenge, opportunity

SA has an established and growing IT industry, but the present choices in terms of future directions represent a watershed decision for the country`s role in global markets.

The challenge is whether the country can make its presence felt in global markets, or remain a marginalised player in technology. Our education system compares favourably with First World countries and the last few years have seen great strides in enabling people from developing communities to gain access to training and employment in the IT industry. SA has world-class software developers and engineers who are increasingly representative of all the country`s population groups.

We need to create the right environment for the industry to grow.

Viv Crone, CTO, Spescom

The country also has a growing number of locally developed software applications with the potential for global distribution. This is an industry that does not rely on major capital investment or expensive input costs paid in foreign currency. All that is required is intellectual capacity, the skills already present in the local market and basic hardware and software resources. In fact, many developer resources are freely available online.

The situation is ideal for establishing and supporting small and medium enterprises in this area that create jobs and make an essential contribution to the overall health of the economy.

This raises the question of why SA, unlike India and other developing economies, has not yet established a high international profile as a software development centre.

There are two major obstacles that are clearly evident. The first is that software development depends on the ability to move large amounts of data quickly and affordably. Unfortunately, local bandwidth is limited when compared to international standards and it is also provided at prices that are among the highest in the world.

Secondly, we face the problem that many local developers can easily find employment overseas where the opportunities are greater.

Although the government is verbally committed to supporting the local industry, the lack of effective action to achieve this implies a lack of awareness of the potential and opportunity that exists.

Not only does SA have the necessary infrastructure - except for affordable bandwidth, of course - we also have an international advantage in terms of location and costing. We are basically in the same time zone as the major European Union markets, some seven hours behind the Far East and ahead of the US by the same margin. This enables communication at socially acceptable times of day or, alternatively, the ability to work in shifts that overlap with overseas customers` hours.

The present exchange rate contributes to the local costs of these skills being inexpensive by world standards and works very much in favour of businesses that export products not based on input costs paid in foreign currency.

Local software development can save the country millions through not having to source overseas products while simultaneously creating export opportunities that bring in hard currency from global markets.

What strategies can be considered to take advantage of this situation?

We need to create the right environment for the industry to grow. Removing obstacles to the critical enabling technologies is a first step. This could involve introducing some sort of subsidy for bandwidth for companies developing products for export. The fact is that if the industry is given the right conditions to flourish, it will create employment and the necessary skills development programmes.

Connectivity and access are essential, as the developer community is virtually a sub-culture that depends on Internet newsgroups and intranet workgroups.

It should really be a national priority to create the environment where the industry can grow and access the opportunities in world markets. A number of possible legislative moves in areas of tax relief or infrastructure subsidies are worth considering in this area.

The two key factors are to realise the full potential of South African talent - retaining such skills rather than losing them to other countries - and bring foreign revenue into the country.

The advantages are both ongoing and diverse. On the bottom line, it saves local businesses money to use local products and also generates new channels of revenue for software exports. But, in broader terms, supporting the local industry creates jobs, improves education and makes an essential contribution to generating wealth and building the strength of the economy.