South Africa's digital platform economy – a sector which includes online platforms that facilitate financial transactions − could add R91.4 billion to the country’s economy by 2035. However, regulations need to evolve in line with this emerging sector.
This is one of the key findings of a report released today by Naspers and the Mapungubwe Institute for Strategic Reflection, exploring the untapped potential of this market.
The research reveals the digital platform economy could be a game-changer for the country, as its contribution is expected to expand from 0.02% of GDP in 2022, to 1.38% by 2035.
While digital platforms will play an increasing role in driving economic inclusion, the report reveals digital transformation is lagging in SA, even as the demand for digital skills is rapidly growing.
However, it notes the platforms’ benefits to SA outweigh the challenges − and in order to meet this goal, collective action is needed to spur the country’s digital transformation journey.
Business and government must work closely together to address growth hurdles and create an enabling environment for digital platforms to thrive, it asserts.
Examples of SA’s digital platform economy firms include Amazon, Airbnb, Uber, Takealot, SweepSouth and Uber Eats.
Phuthi Mahanyele-Dabengwa, CEO of Naspers South Africa, comments: “This report comes at a pivotal moment for South Africa. There is a renewed sense of energy and commitment across various players to get our country on the path of inclusive economic growth and shared prosperity.
“South Africa stands on the brink of a digital revolution. Though still in its early stages, the shift to digital mirrors global trends and offers a rare chance to unlock significant economic potential for our nation.”
The public and private sectors must join forces to expand digital access, accelerate digital skills to underserved communities and ensure regulations fuel innovation and create a level playing field, adds Mahanyele-Dabengwa.
The report highlights the important role of regulations that focus on emerging technologies, to create a conducive environment for digital economy platforms.
“Regulations must be alive to the nascent nature of the South African digital platform sector. It can take up to 180 working days to process certain regulatory approvals, which hampers timely access to digital infrastructure and services.”
It recommends the introduction of regulatory sandboxes to encourage innovation and that government should include the digital platform sector in national economic tracking systems for better regulation.
The research report points out that globally, there has been a significant shift towards digital dominance among the world’s top companies over the past decade. In contrast, SA’s leading companies have seen little change in composition during the same period, reflecting a more gradual pace of digital transformation.
It highlights key opportunities, including how SA can drive digital transformation and attract new entrants in sectors like e-commerce and fintech, fostering innovation and greater inclusion.
“STEM graduates in SA account for just 18% of the total, compared to over 30% in innovation leaders like India, the UAE and South Korea. Among recommendations to narrowing the skills gap, SA should co-ordinate digital skills training programmes nationally, and align training with high-demand occupations and industry needs.”
Mahanyele-Dabengwa adds: “As South Africa’s homegrown champion that has grown into a leading global technology investor and operator, Naspers has seen the positive impact that technology can have in catalysing inclusive economic growth in markets such as India and Brazil, among others.
“Although still in its nascent stages, our country’s digital transformation journey presents a unique growth opportunity for the sector and the country.”
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