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SA digital economy has many complexities

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 22 Jul 2016
SA regulators can hinder digital transformation within some sectors, says Wits LINK Centre's Lucienne Abrahams.
SA regulators can hinder digital transformation within some sectors, says Wits LINK Centre's Lucienne Abrahams.

The South African economy, as with most economies, could be described as digitally complex because it includes many interconnected facets such as globalisation, economic expansion, broadband infrastructure and a shift from very simple forms of e-commerce and e-government to much more complex forms.

This was according to Lucienne Abrahams, director of Wits University's LINK Centre, speaking at the Huawei Connect to Connect Summit in Tshwane yesterday.

Abrahams believes SA has an economy where some sectors are on the decline because they are pre-digital. These sectors are mining, agriculture and manufacturing.

"These sectors have been on a decline for many years. Currently mining and agriculture contribute about 2% to the GDP rate, despite them being high export sectors.

"These sectors have taken a long time to grow to digital maturity, despite the fact that they have already had hundreds of years which have seen new technological inputs. This is why it's hard to understand why they are struggling to transform and fully adapt themselves to the utilisation of digital technologies which will in turn accelerate them to the next development cycle and advance their sector output and knowledge," she explained.

These sectors, she continued, cannot advance significantly without incorporating digital technology inputs, because no sector can continue to the next stage of advancement without new scientific technological and innovative inputs.

The three top sectors that have embraced digital transformation in SA are banking and finance, travel and tourism, and film and entertainment, noted Abrahams.

"Consumers are now able to engage in financial transactions through many different types of digital formats. Another interesting sector is the insurance sector, where everything is mobilised online so that the speed at which transactions can be completed is streamlined and simplified.

"Similarly the South African Revenue Service also understands the power of digital technologies when it comes to moving money around. Every year when consumers do their e-filing there is a visible improvement in the new digital services they offer as part of their e-filing system," she added.

IT regulations

During digital economic discussions, we tend to look to the ICT sector regulator for answers when in fact there are multiple regulators that could play a role in digital transformation, Abrahams pointed out.

"One of the reasons why the banking and finance sector has been so successful in digital transformation is because of the role of the banking regulator in supporting and enabling or removing barriers to this transformation process.

"That is not necessarily the case in the health sector, where there are many rules and regulations which can prevent digital transition. Such rules concern security and privacy around patient data for instance, where the regulations have not been redesigned to encourage health professionals to fully function in the digital world," she asserted.

Although privacy is crucial, we can't say that we cannot transform our institutions because of the risks presented by new technology. We need to know what the risks are, understand them, address them and rewrite the rules, she continued.

"We need all the regulators in the same room. These regulators include the ICT sector regulator, health regulator, competition regulator, information regulator, Consumer Commission and the rest.

"Their work links together but their linkages have not been explored and this creates an environment which makes it very difficult for some sectors to adapt to digital transformation," concluded Abrahams.

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