Broadband necessary for international competitiveness

6th December 2013

Western Cape Finance Minister Alan Winde reports that the province has helped to develop talented technology entrepreneurs, and is well on track to becoming an innovation hub.

Information and communication technology (ICT) is one of the priority sectors, as it holds the biggest potential for growth. The industry currently employs 30 000 people in the province and contributes R3-billion to the yearly gross domestic product.
To further encourage the growth of the ICT sector, fully networked business incubator Bandwidth Barn has invested in skills development opportunities for 96 businesses in the province over the past year.

Between 2006 and 2010, the 55 Bandwidth Barn tenants and more than 50 success- ful graduates added more than R800- million a year to the region’s economy, and supported almost 2 500 direct and indirect jobs, says Winde.
In a study carried out by Bandwidth Barn last year, the company found that only 48% of ICT start-ups survived for more than three years. In comparison, 90% of the initial group of small, medium-size and microenterprises in the Bandwidth Barn survive beyond this period.

Winde explains that the number of businesses that survive beyond the crucial three-year mark needs to increase to con- tribute to the economy and employ more people.

To assist in reaching this aim, over R50-million will be allocated to developing the ICT industry over the next three years, adds Winde.

These funds will be made up of contributions from the Westen Cape government, the City of Cape Town, the Development Bank of Southern Africa Jobs Fund, the private sector and the Department of Trade and Industry.
Further, the programme has received investment from the Insurance Sector Education and Training Authority and the Wholesale and Retail Sector Good Practice Awards as well as numerous private-sector contributions by corporate sponsors and participating businesses.

Subsequently, the provincial Depart- ment of Economic Development and Tourism is collaborating with the University of Cape Town on the development of a postgraduate diploma in software development.

“Through this joint programme, we are creating a course that will produce industry-relevant ICT skills, which will drive job creation and growth in the sector,” says Winde.
While other software development courses exist, the intention of this programme is to run for a shorter period as a postgraduate diploma rather than a full degree programme.

The National Broadband policy, approved by Cabinet in 2010, states that broadband is a resource for economic growth and jobs, says Winde.
The World Bank estimates that every 10% increase in high-speed Internet connections in developing countries results in a 1.3% increase in economic growth, he adds.

“If we aim to create an internationally competitive knowledge economy, improve productivity and enjoy access to new markets, we need to invest far more in fast and affordable broadband infrastructure,” concludes Winde.