The concentration of ICT spending in three provinces, namely Gauteng, KwaZulu-Natal and the Western Cape, shows the fallacy of trying to create ICT centres in the more rural areas, says Raven Naidoo, chairman of consultancy Radian.
Naidoo was commenting on a statement issued today by local research firm BMI-TechKnowledge, which states the above-mentioned provinces' combined spend contributes 80% of the country's total ICT spend of R100 billion. The other six provinces make up about a fifth of that total.
"It is a natural trend that large companies congregate around each other and in centres where it makes sense for them to do so - this is a worldwide phenomenon. Naturally, there is a trend that this would attract more ICT training institutions and more infrastructure development in those areas," Naidoo says.
He says that, thinking in some quarters of government and the private sector is that, in order to bridge the digital divide, training centres and other incentives should be created in areas that have been little touched by the IT age.
"These sentiments are noble, but as this study shows, they are often out of touch with the reality on the ground," he says.
Differing trends
According to the BMI-T study, ICT vendors and service providers need to realise the business ICT spend does not follow precisely the same trend as the provincial GDP contributions.
"Not only is the market dominated by these three provinces (Gauteng, KwaZulu-Natal and the Western Cape), but by four particular industry sectors as well, namely: finance, real estate and business services; general government services; wholesale and retail trade; and the manufacturing sector, which when combined, form approximately 70% of GDP," says BMI-T analyst Terita Smit.
Smit says that another finding is that, although the large companies make up less than 0.5% of the total number of businesses in SA, they contribute to over one-third of the ICT spend. Conversely, a third of all companies (about 200 000) do not even make up 3% of the business ICT spend.
She says government has realised this ICT imbalance that exists between the provinces and that is why certain issues, like issuing WiMax licences to infrastructure developers in the more rural provinces, are being prioritised.
Naidoo says, while there is a big difference between what organisations spend on ICT in the provinces, the numbers are more evenly spread when it comes to consumers.
"Consumers in almost all our provinces have fairly equitable access to cellular phones and this flattens the differences somewhat. It is also very difficult to separate out the small companies from the consumers in these provinces too."
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