South Africa has been regarded as one of the most accomplished countries in the Africa continent in maintaining its economic growth. With the dawn of the 21st century, the country has remodeled its economy to be inclusive and diverse simultaneously: from 2001 – 2010, the country’s economy grew 3.6% per annum and the per capita income spiked around 2.2% per year. Despite the covid pandemic, the economic growth is projected to rebound to 2.4% in 2022
South Africa has mainly relied on traditional industries and businesses to generate revenue. These industries including telecommunications, high tech, and professional services, etc. remain untapped as they are neither connected nor integrated with the global digital grid. These sectors, if connected, with the world would not only boost the South African economy but also generate business in the country. The number and level of public-private partnerships has been on the rise which signifies the opportunities of starting a business or expanding it in the country.
Economic Landscape
South Africa’s financial services sector is well backed by a sound and sophisticated regulatory and legal framework. The total banking sector assets have grown by 16.36% to R6.6 trillion in 2020 and are expected to grow further. South Africa is also home to the region’s largest stock exchange – The Johannesburg Stock Exchange.
Mining remains one of the most developed and revenue-generating sectors of the country. Gold, platinum, diamonds are a few of the export items which are exported along with machinery and automobiles. The chemicals, textiles, and food manufacturing sectors are steadily augmenting their position in the GDP of the country and have contributed around 26% to the GDP in 2019. Moreover, developed industries including tourism, energy, communications, transport, finance, and legal pooled 61% to the GDP grid in the same year.
E-commerce emerged as a promising industry in 2018 by adding 1.4% to the GDP, dominated primarily by the private sector. Digital platforms are connecting businesses with the financial grid of the country and enhancing business and a stronger B2C environment.
Global Business Services (GBS), currently 50,000 South Africans carry out offshore GBS work with a growth rate of approximately 24% per annum. It is estimated that by 2023, GBS would be conducted by 150,000 South Africans and this number would touch 500,000 in 2030.
The automobile industry continues to remain an FDI-attractive sector as South Africa hosts manufacturing plants of automakers such as BMW, Ford, Toyota, Nissan, and Mercedes. These companies are gradually expanding their plants which in turn increases the investment capacity. Similarly, rail locomotive manufacturing is also attracting FDI.
Threats to the Economic Landscape
Cyber Threats
With the growing of cyberthreats, South Africa is no exception, and its digital and critical infrastructure remains vulnerable to cyber threats. Cyber campaigns launched on these businesses include ransomware and denial-of-service attack with a motive to extract money in return for encryption codes. The cyber threat surface and vulnerabilities in South Africa remain high as IoT-based technologies increase with cyber security policy remains absent from the whole scenario.
The financial impact on data breach costs South African companies R40.2million average in 2020 and it has been ranked 7/16 countries for the highest cost of a cyber breach
Digital Preparedness of South Africa
The digital preparedness of South Africa, in contrast to other African countries, is fairly high as it is one of the two countries which adopted 5G in its early stages. A total of 18 commercial 5G deployments are present in Africa out of which 16 are in South Africa. Moreover, 99.9% of the South African population have accessible mobile networks with 99% having 3G support and 80% running 4G services. The country stands at 18 out of 139 counties in terms of bandwidth per user and availability of undersea cables.
South African businesses are in a transitionary phase vis-à-vis the adopting of tech solutions for their business models. Local companies are still unsure about how to drive the technology factor to boost their business. A lot of emphases is being placed on chatbots or AI solutions for customer care and customer relationship management.
The level of embracing digital platforms and technology for innovation and revamping ops from top to bottom level is missing in South Africa because of very few technical experts and a lack of infrastructure.
Companies are finding it hard to implement advanced analytics for precisely detecting problems, opportunities, and present viable solutions which is making it hard for them to compete internationally.
Most of the South African companies, who have advanced digitally, have adopted either “the disruptor or the fast-follower model.” Traditional companies are starting to implement digital strategies. The lack of expertise and unavailability of local digital (cyber) talent employ in the mainstream remains one of the biggest constraints for South Africa’s digital rejuvenation.
Shaping the Digital Transformation and Cyber Security Landscape
Digital transformation has become a buy word now interwoven in the people’s minds and is the future especially for a country like South Africa. Digital Transformation helps to improve current processes, improve customer experience, reduce operating costs and improve performances. A key business driver is how to translate this digital journey into a customer-centric success story. Research & market analysis predicts that the global digital transformation market is expected to grow from US$ 445.4 billion in 2017 to US$ 2,279.4 billion by 2025 at a CAGR of 24.3% between 2018 and 2025.
Digital Transformation as the term implies, leveraging digital technologies to transform the key business processes and even legacy services. The technologies that are boosting this transformation involve artificial intelligence, cloud computing, quantum technology, 3.0 DLT, and the Internet of Things
Digital Transformation opportunities include both Operational Improvement and Growth Driver initiatives, where the latter is driven largely by improved Customer Experience. Transformation is driven by 6 Technology Trends:
- Social Media
- Mobility
- Internet of Things
- Cybersecurity
- Big Data
- Cloud
As digital transformation accelerate, Cyber Security has become an imperative. With the exponential growth of cyber threats, (with an average of 80,000,000 cyber threats daily), cyber security is now a business mission-critical imperative, traversing the entire organizational landscape. Management must engage in an ongoing dialogue to ensure their Cybersecurity Strategy continually evolves and should be a constant item on the agendas of CEOs and the boards. Most large companies have significantly strengthened their Cybersecurity capabilities. Formal processes have been implemented to identify and prioritize Cybersecurity risks and hundreds of millions of dollars have been invested to mitigate these risks. Despite this, Cybersecurity is a bigger issue now than ever.
With the growth of the cyberthreat landscape, conventional cybersecurity approaches are inadequate to protect your data sovereignty
As Governments, enterprises, educational systems, social and many others have moved towards AI and with Quantum Computers expected to be commercialized within the next 5 years, it is prudent for organizations to relook at their digital and cyber security strategy.
Embracing Quantum technology with NextGen decentralized ledger technology
Embracing the use of quantum technology with NextGen decentralized ledger technology, could set South Africa ahead of its competitors and also, providing a security safe environment. The ultimate solutions by our firm use quantum-safe technology and cryptographic technique helps to Integrate and safeguard networks, data in transit, public key infrastructure (PKI), and its environment. The technology is immutable and it is embedded with enhanced trusted security components such as unclonable functions, real-time and tamper detection. Most importantly, it is resilient to new attack algorithms and upcoming quantum computers. The solution has a QKD cross-border connection and it easily interfaces with link encryptors. It also improved operating efficiency by 10x and reduced Capex and Opex cost by 30%.
We believe in providing the highest level of protection, encryption, and trust for governments, financial institutions, insurance, e-commerce, supply chain, pharmaceutical, hospitals, education, aviation, transport, shipping, consumer, media, telecommunications, logistics, mining, oil & gas, energy, solar, critical infrastructure, intelligent automobiles, cloud computing, and data centers. Across medical devices, financial transactions, digital & cryptocurrencies transactions, smart devices, virtual private networks (VPN), online platforms, and IoT devices.
About Corne Engelbrecht
Corne is the Managing Director and lead partner for BI Management South Africa. He is a C-level adviser and has extensive experience in change management, technology transformation, business advisory, and corporate turnaround strategies. Corne has more than 10 years of experience in the financial, technology, construction, and retail industries within South Africa, 5 years of which as Chief Finance Officer (CFO).
Corne obtained his BCom Financial Accounting (ACCA) degree, and BCom Financial Accounting Honours Degree from the Northwest University in South Africa, whereafter he completed his MBA from the NWU Business School.
SERVICES:
Advisory, Consulting, Operations Management
EXPERTISE:
Corporate Turnaround, Digital, and Technology Transformation, Cyber Security, ERP and Project Management
About BI Technology Consulting Group
Transforming the Digital & Cyber Security Landscape. Powered by Quantum Technology and Cryptographic Technique for unconditional data protection
BI Consulting Group is a Singapore-based business and technology consulting firm. They are the first consulting firm in Singapore and Asia to roll out quantum and cryptography engineering hacked-proof solutions to help clients to increase their market values, transforming the digital and cyber security landscape.
BI’s state of art Digital Transformation and Security Safe solutions uses quantum engineering technology, cryptographic techniques, nextgen 3.0 hashing technology to integrate and safeguard client’s network, environment, protect their data, and 100% sustainability
BI’s clients include fortune 500, both private and public sectors. Headquartered in Singapore with a global presence in Asia, Europe, the Middle East, and South Africa.
For more information, please visit bi-mgt.com.
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