SA can unlock R5tn from digital tech

Read time 4min 30sec
Digital transformation of SA's government services is likely to create the highest value for society.
Digital transformation of SA's government services is likely to create the highest value for society.

In South Africa, digital technologies can generate more than R5 trillion in value for industry and society over the next decade through the use of technologies in key industry sectors, including agriculture, public infrastructure and administration, financial services and manufacturing.

This insight comes from a South Africa-specific analysis conducted by Accenture using the Accenture and World Economic Forum value-at-stake framework.

The framework measures the impact digital technologies, such as analytics, blockchain, virtual reality and artificial intelligence (AI), may have on SA's industries and society (environment, consumers, labour and government).

In the assessment of industries, the framework integrates all segments of an industry's value chain, capturing approximately 80% of revenues and profits. It considers the total addressable market and the adoption or penetration rates of new technologies over time, and is based on research, industry reports, existing use cases and expert interviews.

Industry sectors

The value-at-stake framework was initially piloted in the UK, Denmark and the Indian state of Telangana. It has now been applied to SA.

For SA, the analysis - based on the value-at-stake framework, expert interviews, local statistics, and other input - delivers insight into the value that digital technologies can deliver per industry sector.

"Our analysis reveals that South Africa could unlock over R5 trillion in value over the next decade, with value of R1.4 trillion created in 2026 alone, by implementing digital initiatives across nine industries and five government services," says Joost de Haas, Accenture's strategy lead.

"We are confident these findings will help initiate broader dialogue on the impact of digital technologies in South Africa and, importantly, inspire the collaborative action needed by stakeholders in South Africa to define effective digital policies and strategies, and guide investment in digital transformation to deliver the greatest benefits for all."

De Haas points out that SA is a country facing multiple challenges, including high unemployment and declining productivity.

"There is growing optimism, however, as the arrival of the fourth industrial revolution coincides with a renewal of political will to address the fundamental socio-economic and development issues facing the country with the help of digital technologies. There is an incredible opportunity to do so."

"Digital transformation is redefining industries, making new business models possible and providing businesses with unparalleled opportunities for value creation. But unleashing that value requires relentless effort," says Vukani Mngxati, Accenture SA country managing director.

"Understanding how digital technologies create value and how this value can be captured for government, industry and society is key; it can help lay the groundwork for national digital transformation strategies, guiding efforts and investments to effectively power economic growth across sectors to the benefit of all."

According to the report, just over 51% of the total value at stake is expected to be created for society through digital transformation across nine industry sectors and five government services.

This includes the creation of approximately four million jobs, which can help reduce unemployment over the next decade.

Government services

The other 49% of the value at stake accrues to industry as a result of new products and services, as well as the digitalisation of public services (ie, the increased efficiency and effectiveness of government services which results from higher adoption of digital initiatives by government entities).

The value at stake from digital transformation across five government services is just over R2 trillion, says Accenture.

It adds that digitalisation of public infrastructure maintenance, public administration and healthcare alone can add over R1.2 trillion to society (environment, government and citizens) over the next decade.

Digital transformation of SA's government services is likely to create the highest value for society through its impact on economic activity, productivity and service delivery, it notes.

Digital transformation of nine industry sectors could deliver over R3.6 trillion, the majority of which (R2.5 trillion) will accrue to industry. Transformation across the financial services, agriculture and manufacturing sectors presents the highest potential.

It points out that 68% of the value at stake will be driven by the adoption of technologies such as Internet of things (IOT) and connected devices, and AI.

According to Accenture, each of these technologies brings new capabilities and adds enormous value but it is the combined capabilities of these and other technologies that drive true transformation.

In the agricultural sector, for example, the combined use of autonomous vehicles, drones and sensors enables precision agriculture, improving use of resources and increasing yields. This is revolutionising this sector, says Accenture.

In the manufacturing sector, it adds, the implementation of multiple advanced technologies, such as IOT and AI, throughout the value chain will improve responsiveness to demand and enable the introduction of many value-adding services, effectively turning product companies into service companies.

Have your say
Facebook icon
Youtube play icon