Z Mkhize: Launch of KwaZulu-Natal ICT and Electronics Cluster

5 April 2007

Honourable Deputy Minister for Communications, Mr Roy Padayachie
Your Worship Mayor of Ethekweni, Cllr Obed Mlaba
Municipal Managers
Distinguished members of the ICT and Electronics fraternity
Colleagues from Government
Ladies and Gentlemen

Information and communication technology (ICT) is widely recognised as a
significant strategic and all encompassing key driver of economic growth and
wealth creation and an important enabler and cross-cutter in ensuring quality
of life. Hence there is a provincial commitment to establishing a strong
vibrant capacity in ICT and electronic innovation, enhancing the rate, quality
of flow and transformation of innovative ideas into new products and
businesses.

For much of the past decade, industries in the ICT sector achieved an
average annual growth of more than 10 percent – well above the growth rate
realised by the global economy as a whole. The global market for ICT products
and services is projected to exceed $1,2 trillion in 2008 while the software
industry is anticipated to grow at 8,5% in South Africa until 2008. The ICT
services industry, accounting for 44%, is the largest portion of the ICT sector
in South Africa and is forecast to experience 10,8% growth until 2008.

Salaries generated in the ICT industry are 4,6 times higher than the South
African average salary. This implies that employees in the ICT sector have a
higher standard of living than the average South African. ICT services are the
largest contributor to the overall ICT sector in most countries and contribute
an increasingly larger segment of economies as companies rely increasingly on
technology in their day-to-day business activities.

There are approximately 240 companies in the ICT and electronics sectors
within KwaZulu-Natal (KZN). Of these, about 180 are in the ICT sector and about
60 in the electronics sector. The KZN ICTE sector is heavily concentrated in
Durban. More than 80% of the firms in the sector and well over 90% of
employment in the sector is in Durban and the surrounding suburbs.

Pietermaritzburg represents the second largest concentration of information
and communication technology and electronics (ICTE) firms and Richards Bay
represents the third largest concentration of firms. Our vision is to make KZN
a vibrant, innovative, fully inclusive knowledge society with a strong ICT and
electronics brand that speaks of innovative approaches to local and global
challenges. KZN must be an example of an environment where ICT and
electronic-based innovation flourishes with social entrepreneurs from
historically disadvantaged population groups, remote communities and the
knowledge intensive industry benefiting and contributing to the well-being and
quality of life of our citizens.

The key requirements to achieve the vision for the ICT and electronics
landscape in our province are
* world-class, focused ICT and Electronics related activities with active local
and international collaboration leading to globally recognised leadership in a
number of key areas relevant to the KZN context
* a healthy pipeline of human resources with advanced capabilities
* effective mechanisms for technology transfer from knowledge generation all
the way through to productive implementation including export
* increase in size, number of jobs and contribution to Gross Domestic Product
(GDP)

The need to promote greater utilisation and local development of new and
future technologies and the need to move towards a knowledge economy calls for
human capital development that complements domain focused activities in these
areas. Human capital development interventions must expand the number, and
increase the demographic diversity of the academic labour force as well as
increase the number of students involved in postgraduate research. There must
be a pronounced increase in the advanced ICT and electronics skills base.
Interventions must focus on promoting local innovation rather than servicing an
ICT and electronic import industry.

In order to achieve this we must
* implement a supportive environment and funding mechanisms allowing young
people to work under the leadership of experienced ICT and electronic
professionals whilst pursuing advanced qualifications
* create advanced ICT and electronic skills development programmes aligned to
the ICT and Electronic Cluster strategy including both advanced academic
qualifications and skills as well as entrepreneurial orientation
* establish programmes facilitating higher levels of co-operation between
industry and academia including a healthy flow of ICT and electronic
professionals between these sectors
* implement affirmative programmes and initiatives to promote a more
representative population of ICT and electronic skilled people
* market to recruit high quality supervisors and students and develop soft
attraction factors to retain people in the ICT and electronic sector
* exchange mechanisms allowing exposure of young researchers to global research
environment and for senior overseas scientists to assist with intellectual and
technical leadership provision to young ICT and electronic personnel
* implement and strengthen measures that promote enrolment of schoolchildren,
especially girls, in maths and science and promoting ICT and electronics
careers.

Our ICTE industry must become a creator of innovative local technology. In
general, the degree of dependence on imported know-how and technology, is
unacceptably high in the case of ICT, and needs to be addressed as a matter of
urgency. Investment must be made in a number of ICT domains that have unique
characteristics which favour local development and globalisation.

A sustained, long-term commitment of industry is paramount. Industry must
provide high levels of sustained financial and human resources to ensure that
large companies interact effectively with appropriate networks of small and
medium-sized enterprises. Appropriate steps must be taken to ensure openness
and transparency with regard both to existing and new stakeholders and to the
communication, dissemination and diffusion strategies put in place.

KZN Department of Economic Development is playing its role in initiating and
funding the cluster. For the cluster to grow and succeed industry must clearly
defined and formulate roadmaps, each with realistic and measurable milestones
and deliverables, while at the same time recognising the need for flexibility
in the light of rapidly evolving technologies.

Information technology has come a long way in the past two decades. Future
advances will focus less on technology, and more on what it helps us to
achieve. These days millions of people are using computers for communication,
increased productivity, learning and entertainment.

The phenomenon of using ICT to raise productivity has helped several nations
with business investments in ICT to achieve higher levels of real,
non-inflationary growth and increasing standards of living. Part of
Government’s strategy has been to examine the ICT sector as part and parcel of
the broader economy.

Initiatives such as the ICT and Electronics Cluster impart skills and
contribute to building a network of highly skilled specialists. My challenge to
you today is to find ways to continue to build upon the great work that is
evident within our ICT communities and to further encourage others to actively
participate and grow this important sector. Share your knowledge and skill in
building a stronger and vibrant ICT ecosystem for KZN.

Huge efforts are being made to turn KZN into a trade and logistics hub.
Logistics has become increasingly reliant on sophisticated technology and close
collaboration with trading and logistics partners. Generating new technologies
in ICT and Electronics can enhance the logistics industry’s ability to use
sophisticated technology and operate in close collaboration with other trading
and logistics partners. Airlines, shipping and road freight companies all can
use the internet and other communication technologies to monitor their fleets.
While they have been using e-commerce, further enhancements in e-commerce can
give KZN's logistics industry an edge. KZN with its two harbours, new airport,
road infrastructure can become a world–class logistics hub that is spearheaded
by the provinces DubeTradeport initiative. Sophisticated technologies in the
areas of Radio Frequency Identification, sensors, smart cards and satellite
technology can cause KZN to become a smart cutting edge logistics hub. The
province's research and development (R&D) and innovation must be channelled
to improve our logistics capabilities.

The R&D and innovation drive in the logistics sector can lead to
development of Intelligent Transport Systems (ITS) to enhance the efficiency of
road infrastructure. Technologies that can be developed in Intelligent
Transport Systems include vehicle routing and scheduling systems, track and
trace systems, freight matching and vehicle booking systems. The provinces
strong capability in software engineering can be channelled towards producing
world-class logistics applications for both local and export purposes.

A Smart Province is the province of the future, made safe, secure, and
efficient because all structures such as power, water, transportation, etc. are
designed, constructed, and maintained making use of advanced, integrated
materials, sensors, electronics and networks which are interfaced with
computerised systems, comprised of databases, tracking, and decision-making
algorithms. A province that monitors and integrates conditions of all its
critical infrastructures, including roads, bridges, tunnels, rail, airports,
seaports, communications, water, power, even major buildings, can better
optimise its resources, plan its preventive maintenance activities, and monitor
security aspects while maximising services to its citizens. With advanced
monitoring systems and built-in smart sensors, data can be collected and
evaluated in real time, enhancing provincial and municipality management’s
decision-making. Smart Province systems and structures will monitor their own
conditions and carry out self-repair, as needed.

The research and technology challenges along the way to this vision
encompass many technical fields including physics, chemistry, biology,
mathematics, computing science, systems, mechanical, electronics and civil
engineering. This situation strengthens the case for multi-disciplinary
research collaboration. A Smart Province is one that rests on the integration
of science and technology through information systems. It requires
collaborative relationships between government, municipal managers, business,
academia and the research community.

Crime costs the economy vast amounts of money every year. Tackling crime is
an important priority as it remains one of the biggest social and political
issues. Relying on traditional methods has had limited success so we need 21st
century answers to crime. Efforts to combat crime must bring together
technologists, scientists, designers, business managers, funders, crime
reduction policy makers and practitioners to share problems and find solutions.
Government and industry must invest in research that will help develop new
technologies in the fight against crime and terrorism. The province,
municipalities and industry in close collaboration with the universities should
initiate a crime technology programme that includes research projects in
developing technology in fields such as, identity and authentication,
biometrics and signature recognition, verification and encryption.

The use of CCTV in security and surveillance operations is an important
crime deterrent. It assists in identifying criminals. Reliance on this
technology however depends on the ability to recognise faces from video
images.

Research can produce technologies and recognition processes using computer
modelling to develop improved systems for machine-based recognition.
Multi-disciplinary research teams can assemble to conduct research for crime
prevention technologies and solutions. The Business Process Outsourcing (BPO)
and contact centre industry has the potential to grow, deliver a significant
contribution to the Gross Domestic Product and generate a high number of jobs.
BPO offers an opportunity for the ICT sector to have a significant impact on
unemployment. It has an enormous potential and is a large market that is
continuing to grow rapidly. The BPO market is estimated to be around $180
billion worldwide, with expectations of continued growth of 10% to 12% annually
over the next five to 10 years. More importantly for KZN, the BPO industry
tends to employ large numbers of people.

The Department of Economic Development has been quick to seize the
opportunity to build the BPO industry, adopting a partnership philosophy with
business. Government will provide initial support and offer scholarships for
our citizens to attain BPO skills. Opportunities to enhance our skills via
international exchange programmes will be robustly pursued. We in KZN want to
be a leader in BPO and used as a benchmark for other regions. ICT technologies
and applications can also be developed for the agricultural sector. KZN farmers
can turn to new ICT based technologies and best practice management to gain a
competitive edge. Accurate, reliable and low cost information of the spatial
and temporal variation in pastures, crops and resource condition can increase
potential returns.

Some of the technologies and solutions that can be developed in agriculture
are:
* financial management software that includes 'farm specific' online banking
application
* e-commerce solutions specialising in cost and inventory management
systems
* software for animal 'feed management' programmes
* livestock improvement software that includes genetic evaluation
* farm management software
* global positioning system (GPS) services
* spatial information technologies for crop forecasting and yield prediction
using satellite imagery, climatic data and statistics from previous years.
Farmers can build profiles of selected areas online and manipulate the
data
* technology and associated software to monitor soil moisture and provide
advice on irrigation management
* internet-wireless interfaced system for remote management of irrigation
* use of GPS for monitoring pests and yields
* soil moisture monitoring hardware and software solutions

ICT is a key input for modelling and long distance monitoring, particularly
in environmental and genetics R&D. Centres can be established, with
universities, to provide agricultural R&D and consulting services with
significant ICT components, particularly specialised applications software.

Our province has already made some important strides in our ICT and
Electronics journey. The Department of Economic Development has recently
completed the Provincial Broadband Strategy and Action Plan, the implementation
of which will see a coordinated approach by role players and stakeholders for
the extensive rollout of broadband communications throughout our province. This
will accelerate the development of our knowledge economy and information
society and afford the citizenry of KZN access to a wealth of information and
services that will improve the quality of life, create wealth, accelerate
economic development and make our province globally competitive.

The provincial ICT and Electronics Cluster already has a head start in that
its Technology park and incubator programme is well on its way. We have
recently, in close collaboration with Ethekwini Metro and SmartXchange,
completed the business plan to build an IT park in Ethekweni. Business plans
for an electronics park at the Dube Tradeport and ICT incubators, similar to
SmartXchange, for Richards Bay and Pietermaritzburg have been completed as part
of the cluster initiatives. A provincial ICT and Electronics Research,
Development and Innovation Strategy has been completed. The implementation of
this strategy will provide a conducive and enabling environment for R&D and
innovation to flourish and lead to the production of a provincial pipeline of
high-level skills that will generate new knowledge to produce leading edge
smart technologies and solutions for domestic consumption and export to global
markets.

The borderless nature of ICT means that ICT initiatives cannot be developed
in isolation in any region. They require alignment with initiatives and
developments in other parts of our country, other countries, in the developed
world and importantly also in other developing countries.

These are exciting times for ICT and Electronics in our province and our KZN
ICT and Electronic Cluster will undoubtedly lead the way to achieving an
improved quality of life through a highly competitive economy, based on the
pervasive integration of ICT into society and the economy; innovative
application of ICT and electronics; a quantum leap improvement in the knowledge
and skills levels through effective utilisation of ICT and knowledge society ;
a vibrant, sustainable and innovative indigenous ICT and electronic industry
with a strong export focus.

In conclusion I convey my best wishes to our ICT and Electronics Cluster and
wish you every success in spearheading our quest to play in the same field of
the ICT and electronic heavyweights of this world.

I thank you

Issued by: Provincial Treasury, KwaZulu-Natal Provincial Government
5 April 2007
Source: KwaZulu-Natal Provincial Government