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Information Systems (IT), Electronics & Telecommunications Sector Education &

Training Authority (ISETT SETA)

Sector Skills Plan, 2000/2001

Version 4.7

26 February 2001

Ground Floor, Block E, Central Park, 400, 16th Road, MidrandPO Box 5585, Halfway House, 1685

Tel; (011) 805 5115 Fax: (011) 805 6833e-mail: [email protected]

ISETT SETA SSP 06/05/23Page 1 of 163

1 FOREWORD..........................................................................................................................................6

2 INTRODUCTION.................................................................................................................................8

2.1 HOW THIS PLAN WAS DEVELOPED AND SOURCES CONSULTED..........................................................82.1.1 Data collection.........................................................................................................................82.1.2 Other consultations................................................................................................................10

3 CHAPTER THREE: EXECUTIVE SUMMARY..........................................................................12

4 CHAPTER FOUR: SECTOR PROFILE.......................................................................................17

4.1 INFORMATION TECHNOLOGY............................................................................................................174.1.1 Introduction............................................................................................................................174.1.2 Defining the sector.................................................................................................................184.1.3 Types of Activities...................................................................................................................184.1.4 Activities by SIC Code............................................................................................................194.1.5 Turnover and Size of the IT Sector.........................................................................................194.1.6 Geographic Distribution........................................................................................................204.1.7 Salary Data.............................................................................................................................204.1.8 NQF Levels.............................................................................................................................214.1.9 Race, Gender and Disabled distribution................................................................................224.1.10 HIV/AIDS in the Sector..........................................................................................................224.1.11 Employer and Employee Associations....................................................................................22

4.2 ELECTRONICS SECTOR......................................................................................................................234.2.1 Introduction............................................................................................................................234.2.2 Defining the sector.................................................................................................................244.2.3 Types of Activities...................................................................................................................244.2.4 Activities by SIC Code............................................................................................................254.2.5 Turnover and size of the Electronics Sector...........................................................................254.2.6 Geographic Distribution........................................................................................................264.2.7 Salary Data.............................................................................................................................264.2.8 NQF Levels.............................................................................................................................264.2.9 Race, Gender and Disabled distribution................................................................................274.2.10 HIV/AIDS in the Sector..........................................................................................................274.2.11 Employer and Employee associations....................................................................................28

4.3 TELECOMMUNICATIONS....................................................................................................................294.3.1 Introduction............................................................................................................................294.3.2 Defining the sector.................................................................................................................304.3.3 Types of Activities...................................................................................................................314.3.4 Activities by SIC code.............................................................................................................324.3.5 Turnover and Size of the Telecommunications sub-sector.....................................................324.3.6 Geographical distribution......................................................................................................334.3.7 Salary Data.............................................................................................................................334.3.8 NQF Levels.............................................................................................................................344.3.9 Race, Gender and Disabled distribution................................................................................344.3.10 HIV/AIDS in the Sector..........................................................................................................354.3.11 Employer and Employee Associations....................................................................................35

5 CHAPTER FIVE: FACTORS INFLUENCING FUTURE CHANGE........................................37

5.1 POLICY FACTORS..............................................................................................................................375.1.1 Employment Equity and Skills Development..........................................................................375.1.2 Telecommunications Review..................................................................................................385.1.3 The SAITIS Project and E-commerce Green Paper...............................................................405.1.4 Active Labour Market Policy..................................................................................................41

5.2 ECONOMIC FACTORS........................................................................................................................415.2.1 New economy woes (Dot-com shake-out)..............................................................................43


5.2.2 Globalisation..........................................................................................................................465.2.3 The effects of HIV/AIDS on the economy...............................................................................475.2.4 DTI and Ntsika focus on SMME's..........................................................................................485.2.5 Summary of Economic Factors..............................................................................................48

5.3 SOCIAL FACTORS..............................................................................................................................495.3.1 Unemployment........................................................................................................................495.3.2 Poverty....................................................................................................................................505.3.3 Rural development..................................................................................................................505.3.4 Race and gender issues..........................................................................................................515.3.5 HIV/AIDS................................................................................................................................515.3.6 Conclusion..............................................................................................................................51

5.4 TECHNOLOGICAL CHANGE...............................................................................................................515.4.1 Introduction............................................................................................................................515.4.2 Effects on business..................................................................................................................525.4.3 Trends in the Electronics sub-sector......................................................................................535.4.4 Human resource crunch.........................................................................................................545.4.5 Foresight project....................................................................................................................545.4.6 The effects of technology on how people work and play........................................................555.4.7 The effects of technological change on competencies and values..........................................555.4.8 Conclusion..............................................................................................................................565.4.9 Cellular telephone radiation..................................................................................................57

5.5 LEGISLATION....................................................................................................................................575.5.1 E-commerce............................................................................................................................57

6 CHAPTER SIX: CURRENT EDUCATION AND TRAINING SUPPLY...................................59

6.1 SCHOOL OUTPUT...............................................................................................................................596.1.1 Number of matric passes in mathematics and physical science:1997...................................596.1.2 Output from the Universities, 1992-1996...............................................................................606.1.3 Output from Technikons, 1992-1996......................................................................................606.1.4 Industry Suggestions...............................................................................................................61

6.2 NATIONAL EDUCATION & TRAINING INITIATIVE APPROPRIATE TO THE SECTOR............................616.2.1 Schools, Technikons & Universities.......................................................................................616.2.2 Urban concentration of Education.........................................................................................63

6.3 GOVERNMENT & PRIVATE ENTERPRISE INITIATIVES........................................................................636.3.1 Houwteq IT & Telecommunications Software Training and Development Centre................636.3.2 Technology enhanced learning initiative (TELI)...................................................................646.3.3 SchoolNet SA..........................................................................................................................65

6.4 IN-COMPANY & BRANDED TRAINING................................................................................................666.4.1 Independent Training Providers.............................................................................................666.4.2 Education & Training Quality Assurance (ETQA)................................................................66

6.5 PERSPECTIVE FROM A DEVELOPED COUNTRY...................................................................................666.6 CONCLUSION.....................................................................................................................................67

7 CHAPTER SEVEN: SECTOR DEVELOPMENT STRATEGY..................................................69

7.1 ADOPTING THE SAITIS PROJECT ANALYSES...................................................................................697.2 DEVELOPING A SKILLED LABOUR FORCE..........................................................................................71

7.2.1 The environment.....................................................................................................................717.2.2 Enhancing public sector infrastructure..................................................................................727.2.3 Utilising labour market information more effectively............................................................727.2.4 Competing for foreign highly skilled workers........................................................................727.2.5 Improving skilled workers employment opportunities...........................................................727.2.6 Expanding the skills base.......................................................................................................737.2.7 Decision making structures....................................................................................................73

7.3 DEVELOPING A CULTURE FOR INNOVATION.....................................................................................737.3.1 Creating ICT innovation awareness viz:................................................................................747.3.2 Facilitating ICT technology transfer......................................................................................74


7.4 IT EXPENDITURE...............................................................................................................................747.4.1 Organisations by IT budget....................................................................................................747.4.2 Organisation by IT payroll.....................................................................................................747.4.3 IT outsourcing........................................................................................................................75

7.5 IT SOCIAL INVESTMENT....................................................................................................................757.6 IT RESEARCH AND DEVELOPMENT...................................................................................................757.7 INTERNATIONAL REVENUE FROM IT PRODUCTS AND SERVICES.......................................................757.8 IT PRODUCTS AND SERVICES............................................................................................................757.9 IT TRAINING EXPENDITURE..............................................................................................................76

7.9.1 IT training expenditure by staff size.......................................................................................767.9.2 IT training expenditure by revenue........................................................................................76

7.10 ISETT SETA OBJECTIVES THAT SUPPORT THE SAITIS ICT OBJECTIVE'S FRAMEWORK...........767.11 SAITIS PROJECT CONTACT INFORMATION..................................................................................807.12 CONCLUSION; SECTOR DEVELOPMENT........................................................................................81

8 CHAPTER EIGHT: EMPLOYMENT AND SKILLS NEEDS.....................................................82

8.1 EMPLOYMENT NEEDS.......................................................................................................................828.1.1 Telecommunications forecast for Professional employment..................................................838.1.2 Economic realities and employment in the sector..................................................................84

8.2 SKILLS NEEDS...................................................................................................................................848.2.1 Union input.............................................................................................................................858.2.2 SAITIS Baseline study findings...............................................................................................858.2.3 IT skills domains.....................................................................................................................868.2.4 IT skills domains by race and gender.....................................................................................868.2.5 IT skills by revenue size..........................................................................................................868.2.6 Future skills needs..................................................................................................................868.2.7 Findings of various surveys and other industry input............................................................878.2.8 Electronics and Telecommunication, additional input...........................................................898.2.9 Skills oversupply.....................................................................................................................91

8.3 GRANT "D" IN THE ISETT SETA....................................................................................................918.3.1 ELECTRONICS......................................................................................................................918.3.2 TELECOMMUNICATIONS...................................................................................................928.3.3 INFORMATION TECHNOLOGY..........................................................................................92

8.4 CONCLUSION.....................................................................................................................................938.4.1 The role of the ISETT SETA...................................................................................................93

9 CHAPTER NINE: IMPLICATIONS FOR SKILLS POLICY AND SKILLS PROVISION.....94

9.1 SECTOR PROFILE...............................................................................................................................949.2 FACTORS INFLUENCING CHANGE......................................................................................................94

9.2.1 Policy......................................................................................................................................949.2.2 The Economy.........................................................................................................................959.2.3 Social factors..........................................................................................................................959.2.4 Technological change.............................................................................................................959.2.5 Environmental factors............................................................................................................959.2.6 Legislation..............................................................................................................................95

9.3 CURRENT EDUCATION AND TRAINING SUPPLY................................................................................969.4 SECTOR DEVELOPMENT STRATEGY..................................................................................................969.5 EMPLOYMENT AND SKILLS NEEDS...................................................................................................97

9.5.1 The role of the ISETT SETA...................................................................................................979.6 ISETT SETA ACTION PLANS AND SPECIAL PROJECTS...................................................................97

9.6.1 Equity......................................................................................................................................979.6.2 Learnerships...........................................................................................................................979.6.3 Influence government departments.........................................................................................989.6.4 Skills Incubators.....................................................................................................................999.6.5 General Re-Skilling within companies...................................................................................999.6.6 Establish links to other SETA's.............................................................................................100


9.6.7 Take technology to rural areas.............................................................................................1009.6.8 Dealing with the Brain Drain...............................................................................................1019.6.9 The Skills Gap.......................................................................................................................1029.6.10 Profiling the "star" employee who "came from nowhere"...................................................1039.6.11 SMME Support & Development...........................................................................................1039.6.12 Mathematics & Science........................................................................................................108

10 CHAPTER TEN: VISION, MISSION, POLICY, OBJECTIVES, PRIORITIES & OUTCOMES...............................................................................................................................................110

10.1 VISION.......................................................................................................................................11010.2 MISSION.....................................................................................................................................11010.3 POLICY.......................................................................................................................................11110.4 OBJECTIVES...............................................................................................................................111

10.4.1 ISETT SETA alignment to NSDS..........................................................................................11110.4.2 Sector alignment to the NSDS..............................................................................................112

10.5 PRIORITIES.................................................................................................................................11610.5.1 Operational priorities...........................................................................................................11610.5.2 Special programmes.............................................................................................................11610.5.3 Research initiatives,.............................................................................................................117

10.6 OUTCOMES.................................................................................................................................117

11 CHAPTER ELEVEN: MONITORING, REPORTING & EVALUATING...............................119

11.1.1 Other Measurements............................................................................................................119

12 APPENDICES...................................................................................................................................121

12.1 APPENDIX A: SOUTH AFRICAN ECONOMIC INDICATORS, 2000.................................................12112.1.1 Various Indicators (Up to availability date)........................................................................12112.1.2 Technology stocks continue roller-coaster ride...................................................................122

12.2 APPENDIX B: SKILLS DATA.......................................................................................................12312.2.1 HSRC Labour Market Analysis (1999)- Graduate BSC Electrical Engineers.....................12312.2.2 Tertiary Education relevant to the sector.............................................................................12412.2.3 Findings of various surveys and other industry input..........................................................12612.2.4 Vacancies study by the ISETT SETA, 2000..........................................................................130

12.3 APPENDIX C: SIC CODES..........................................................................................................131GOVERNMENT NOTICES..................................................................................................................131DEPARTMENT OF LABOUR..............................................................................................................131

MINISTER OF LABOUR.................................................................................................................13112.4 APPENDIX D: GRANT "D" RESEARCH QUESTIONNAIRE.........................................................13512.5 APPENDIX E: GENERAL ISSUES AFFECTING CONNECTIVITY IN SOUTH AFRICA.........................139SATELLITE INTERNET ACCESS.................................................................................................................139TOWNSHIP PENETRATION AND DISADVANTAGED COMMUNITIES.............................................................140

Digital Villages...................................................................................................................................140SOS Children’s Villages.....................................................................................................................140Telecentres and the Universal Services Agency.................................................................................141

KIOSKS.....................................................................................................................................................142INTERNET APPLIANCES............................................................................................................................143THE REGULATORY ENVIRONMENT...........................................................................................................144

Pulling the teeth of the SATRA watchdog..........................................................................................144CHANGES IN WORLD RANKING.................................................................................................................14812.6 APPENDIX F: EMPLOYMENT EQUITY IN THE SECTOR (DOL REPORT).......................................15012.7 APPENDIX G: DERIVATION OF THE NUMBER OF PERSONS THAT COULD BE HIV/AIDS POSITIVE IN THE SECTOR.........................................................................................................................................15212.8 APPENDIX H: A GLOSSARY OF ACRONYMS..............................................................................154


1 Foreword

The Information Systems (IT) Electronics and Telecommunications SETA was established by the Minister of Labour on release of the Government Gazette of the 20th March 2000

The ISETT SETA is tasked with the requirements as set out in the Skills development act. The scope of coverage addressed the convergence of the three sub-sectors, which make up the sector.

The ISETT Sector is categorised as one of the major strategic sectors for South Africa. The development of a globally competitive workforce in this segment of the SA Marketplace can be viewed as non-negotiable in terms of the successful development of the South African Economy.

Traditionally there has been no legislated or formal requirement for Labour skill reporting, or indeed sector information specifically targeted in our sector. A number of commercial initiatives from private survey organisations have been made available to vendor clients. The Government has also investigated aspects of the sector, generally from a particular point of view, such as the HSRC report and the DoC report on future skills needs. More recently, the DTI - SAITIS project, investigating the IT Strategy for the ICT industry in South Africa, has become available. During August 2000, the DoC released a discussion document on the ICT Sector titled “The South African Information and Communications Technology (ICT) strategy”.

The ISETT SETA is tasked under the Act with the production of a Sector Skills Plan. The ISETT –SSP development team, has used input from a wide variety of sources in order to address the issues around skills development.

Reports from as many input sources as well as personal interviews and discussions with industry knowledgeable people has been assembled and the team must be complimented on the production of this document in such short a time, from the date of ISETT establishment.

Work place skill plans are expected from companies and organisations that have elected to join the ISETT SETA, however this input will not be available in any representative sample for the first deadline. The aggregation of work place skill's plans, will form a major comparative set of data for the future SSP.

The SSP in its draft form has been discussed with ISETT representative stakeholders for their input and comment. The SSP is seen to be a view of the Sector, not only for current skills needs but also as a forecast of future needs, which are required to intercept the fast moving technology trends in this strategic sector.


The ISETT SSP will be used to mature the view on ISETT Skills needs, as time moves forward.

Doug Heron

Chair ISETT SETA BOARD


2 Introduction

This Sector Skills Plan represents a “BEST EFFORT” due to a number of factors.

The delay in appointing a CEO, critical employees and appointing volunteer members from the various stakeholders to perform committee work, including the Sector Skills Plan committee.

The difficulty experienced in conducting effective meetings and getting the work done through the committee members. The problem here is the very busy work schedules of the volunteer committee members.

The paucity of hard, reliable statistical information about the three sub-sectors. The delay in appointing Skills Development Facilitators (deadline now 30 September

2000) which means that few Workplace Skills Plans, containing vital demographic details, are available.

The slow SARS registration and processing process which not only affected the flow of critical information but also of essential operating funds. This problem was further exacerbated by errors and omissions (e.g. no employee or salary numbers provided) by employers on the SARS documents.

On the positive side, the SETA had at its disposal some recent research data, e.g. SAITIS, BMI and the surveys done by its own contract personnel. Good information on the economy, the environment and current events within the sub-sectors was readily available in the daily and trade press and on the internet.

2.1 How this plan was developed and Sources consulted

Initial research for this Sector Skills Plan started at the end of 1999 during the run-up to the application to form a SETA. Various sources were consulted such as business reports and the stakeholders, especially companies, in the sector.

In order to determine the nature of the skills gap in the sector, 36 face-to-face and 22 telephone interviews were conducted with companies mainly in the IT sub-sector. A further study was commissioned and conducted by FSA-Contact, a research firm. The results of these two studies are contained in this plan in condensed form in chapter 8. The full reports are available on the ISETT SETA website, http://www.isett.org.za

2.1.1 Data collection

Economic data was collected from the press and recorded in spread sheets. It consisted of the following:

DAILY:Currencies: The rand vs other key currencies.Metals: The performance of gold, platinum and palladium


http://www.isett.org.za/

Movements on world bourses: JSE, NYSE (dow), NASDAQ, LSE, Nikkei, CAC-40, DAX, Hang Seng, SMI

MONTHLY:CPI, PPI, M-3 money supply, Private sector credit, interest ratesNew vehicle sales, Foreign trade, Gross reserves, the fuel price

In addition, articles dealing with economic issues were taken from newspapers and magazines in placed in a scrap book.

A second scrap book was created to keep articles on the sector, political events, social matters, SME's, HIV/AIDS and environmental issues.

Other sources of information include the following:

Human Development Index- UND Report Economic Impact of AIDS in South Africa- Ing Barings report HSRC studies into University graduates 1992 -1998 HSRC studies into sector skills need 1998 -2003 US Dept of Commerce report on Skills shortages in ITC Australian report on Skills shortages in ITC The ICT Capacity Building handbook 1991- Forge ahead BMI-T A survey of the IT Industry and Related Jobs and Skills in South Africa- A SAITIS

Baseline study. South African Information Technology Industry Strategy (SAITIS) Working Draft

version 4.9, August 7, 2000 Various issues of Financial Mail, Fortune, Time (articles on the New Economy, The

effects of technology on jobs, skills gaps, shortages around the world of ICT skills, the environment, HIV/AIDS, social problems such as illiteracy and poverty, etc).

STATS SA data on their 1998 household survey showing employment trends and other data on economic issues.

A study be McConnell International into 42 countries participating in E-Commerce: Risk E-Business: Seizing the Opportunity of Global E-Readiness, August 2000.


Establishment of a working team

The ISETT SETA appointed stakeholder representatives to the Sector Skills Planning Committee, as follows:

Name Place of work Stakeholder groupKhaya Dlukulu IDC Black IT ForumGert Els* Transtel TelecommunicationsChris Guy ICDL/CSSA Labour (CSSA)Hester Jordaan Kentron ElectronicsCharley Lewis Cosatu Labour (Cosatu)Sadiq Malik Motorola TelecommunicationsMaritha Marneweck Venture Computer ITTumi Moji Marconi TelecommunicationsPierre Wessels SALSTAFF Labour (SALSTAFF)Abraham Tebeila Kentron Labour (Numsa)Tieho Setai MEWUSA Labour (MEWUSA)Corneels Pieters Sentech BEMAWUGail Sturgess Didata Silverline ITMaureen Thelland Mweb Internet Service Providers

ForumDavid Richmond ISETT SETA (contractor) SETA staffJohan Rossouw ISETT SETA (contractor) SETA staffSue Barwise ISETT SETA (secretary) SETA staff*Unable to participate, stakeholder group to nominate a replacement.

Note: In February 2001, Mr John Noble replaced Ms Maureen Thelland as the ISPF representative on the committee. Mr Oliver Deasy and Mr Alfred Tau, of the Department of Labour, attended some of the final workshops of the committee, prior to the final plan submission

This committee held 6 meetings starting on 31 May 2000 and the last one was on the 18th of August 2000. The last three meetings were run as workshops. As the plan developed each version was circulated amongst the members for review and comment. After the initial plan submission 5 further meetings/workshops were held on 11 October, 15 November, 13 December 2000 and 18 January and 1 February 2001.

2.1.2 Other consultations

Two important stakeholder meetings were held:

1. Electronics Sub-sector

Date: 26 July 2000


Place: ISETT SETA boardroomPresent: L Erasmus, Siemens

D Walker, Avnet KoppH Jordaan, Kentron (Mrs Jordaan organised this meeting)J van der Merwe, KentronM Gunter, ReunertT Moji, MarconiA Kieck, GrintekE Malan, GrintekT Pretorius, Fuchs ElectronicsD Richmond and J Rossouw of the ISETT SETA

The meeting lasted more than three hours and had the following outcomes: Provided vital input for the Electronics sector Profile in the plan Did a SWOT analysis of the sector Identified key training needs in the sector

2. Telecommunications/Electronics ad-hoc meeting

Date: 8 August 2000Place: ISETT SETA boardroomPresent: O Deasy, Dept of Labour (European Union representative)

L Kekana, Dept of LabourD Heron, Chairman ISETT SETAM Crouch, Executive Director, SA Institute of Electrical EngineersL Arnott, AlcatelT Davies, Manager- Learnerships ISETT SETAJ Rossouw & D Richmond, ISETT SETA (contractors- SSP)

Valuable input was provided by Messrs Deasy (SA economy, skills development needs, HIV/AIDS) in a presentation. D Heron addressed the problem of the growing skills gap.The meeting made a valuable contribution to the development of action items for the SETA plan. These proposed actions contributed to the subsequent work of the SSP committee, in particular to the work found in chapter 9 of this document.

3. Interviews with Labour Union Representatives

Face-to-face, and telephone interviews were held with the following Unions:

BEMAWU, SALSTAFF, Kentron Workers Union, Numsa, Electrical Workers Union.(Further interviews are planned during the month of August)

4. Discussions were held with representatives of the HSRC and WEFA in order to understand their research methodologies better.

5. A large number of telephone enquiries were received from various stakeholders and interested parties. Often these enquiries resulted in visits from individuals from


companies in the sector and other organisations with an interest in the work of the SETA, e.g. SATRA.

6. Dr Meshack Khoza, the advisor from the Department of Labour met with the SETA staff on 4 occasions and provided valuable input and direction towards the development and completion of the Sector Skills Plan.

3 CHAPTER THREE: Executive Summary

"Today's accelerating rate of technological change, and the social, economic and cultural changes that follow in its wake, have stretched existing institutions and the fabric of society to their limits, even in the most developed societies and the strongest organisations. Many argue that the technological innovations, particularly from the Information and Communications Technology (ICT) sector, are the main drivers of these changes. Others speak of an emerging 'knowledge society' as the fundamental cause"(Source: Department of Arts Culture Science and Technology - DACST- Foresight Project)

This extract from the DACST Foresight Project's Executive Summary, makes for an excellent pre-amble to this particular Executive Summary. This Sector Skills Plan of the ISETT SETA has, after all, to do with humans and how they interact with technology and, specifically, what needs to be done in South Africa to develop our people to be and to become part of this emerging 'knowledge society'. The challenge to this sector is particularly daunting due to the fact that it takes centre stage in dealing with the accelerating rate of technological change against the backdrop of a society where many of its citizens are illiterate, semi-literate, poor and unemployed.

This Sector Skills Plan analysis the sector, factors that influence future change, current education and training supply, a strategy for developing the sector, employment and skills needs and then comes to some conclusions for skills policy and skills provision. Finally, it makes certain recommendations and action proposals.

Chapter 4 is a profile of the sector. It describes the activities that enterprises are involved in. It provides information on the size of the sector with 4690 companies (mostly Small, Medium and Micro Enterprises) with 142 598 employees, and a turnover of about R90 billion for 2000 (all three sub-sectors). Geographically the sector is heavily concentrated in Gauteng, about 70%, with the Western Cape and KwaZulu Natal representing 11% and 9% respectively. Employment Equity presents a particular challenge to the sector as white males dominate the sector, e.g. 69% of Senior Management are white males. Some details about average salaries paid in the sector are provided. Some alarming numbers of HIV/AIDS positive workers were estimated. It could be more than 24 000 workers.

Chapter 5 deals with factors influencing change. Policy factors identified are Employment Equity and Skills Development, Telecommunications (including the recent Colloquium, deregulation/privatisation and the third Cellular Telephone Licence issue) the SAITIS Project, the E-Commerce Green Paper and Active Labour Market Policy.


Economic factors identified are the indicators such as GDP, inflation, the exchange rate, the fuel price and various other indicators. Other important economic factors for the sector are E-commerce and the DotCom shakeout, Globalisation and, importantly, the SMME sector which can play a major role in the economy. The economic effects of HIV/AIDS are examined. Of concern currently is the poor performance of the technology sector on the NASDAQ. Social factors that were identified are Unemployment, Poverty, the need for Rural Development, Race and Gender issues and HIV/AIDS. Technological change is a factor influencing all sectors but has particular significance for this sector. The analysis looks at the effects of technological change on business, on the sector itself, on workers and how their competencies and values are changing. The Foresight project of the Department of Arts, Culture and Science is referred to as it provides important insights into this area. Finally, the analysis considers Environmental factors of which the unresolved issue of radiation from cell phones is the only current concern and Legislative factors where the focus is on the Green paper on E-commerce.

Chapter 6 deals with the current Education and Training Supply. It looks at school output, particularly the low number of matriculants with higher grade Mathematics and Science, the output from Universities and Technikons with particular problems in terms of the number of graduate Electronic Engineers. It looks at various projects such as SchoolNet SA and TELI. It also examines in-company and branded training which is a major part of skills development in the IT sector, as is the training provided by independent Providers. As in many countries in the world today the education system in South Africa does not provide the kinds of skills required by business and is deemed to be inadequate.

Chapter 7 deals with a Development Strategy for the sector. The SAITIS project analysis (SWOT) was incorporated into this part of the plan as it is a considered and detailed body of work, arrived at over an extended period of time. Further included are some findings of the 1999 SAITIS baseline study into the ICT sector, dealing with developing a skilled labour force, developing a culture of Innovation and the kind of expenditure (or lack of it) on IT training. Finally, this chapter finds common ground between the ISETT SETA objectives for the sector and those of the SAITIS project, particularly as far as ICT usage stimulation, Human Resource Development and ICT Innovation are concerned.

Chapter 8 concludes the analysis part of the Sector Skills Plan by looking at Employment and Skills needs. It tries to assess the 2001 need for workers in the sector by occupational level and then uses the results of several studies to determine the critical skills. It is clear that highly skilled workers such as Engineers, Software Architects and Developers, Project managers, People Managers, Sales Persons and other professionals and technicians are in short supply, not only in South Africa, but also in the developed world. This problem explains, in part, the brain-drain phenomenon.

Chapter 9 deals with the conclusions reached, based on the analysis in the previous chapters. The following are, in brief, these conclusions:

Regarding the sector profile, the importance of the sector is emphasised as being at the forefront of technological change and providing products and services to all


sectors. The need for highly skilled managers, professionals and technicians have major implications for skills policy and skills provision. Much has to be done to upgrade the education system to meet future challenges. This will be an ongoing process due to the rapid technological change.

On the policy front, the following factors have major implications for the sector Employment Equity and Skills Development will occupy a large part of

management time and planning. The recent Telecommunications Colloquium has intensified the debate around

key issues such as deregulation, privatisation and the E-commerce green paper. The third cellular telephone license is an issue that needs rapid resolution. The SAITIS project addresses some of these issues.

The Economy presents a mixed bag with some good fundamentals and an improvement in GDP. The biggest concern for the economy as a whole, is the turndown in the United States. For the sector, the poor performance of the Technology sector and the many recent profit warning and proposed layoffs are of concern. Should the South African economy be badly affected it will present an opportunity to consolidate and do some necessary training. Should the economy improve, training will be demand driven.

There is no shortage of Social problems: Unemployment, poverty and lack of rural development are serious issues for the country. These issues are further compounded by being skewed by race and gender. HIV/AIDS is not only a serious health and social threat, it can have a major negative impact on the economy. The ISETT SETA should play a lead role in a drive to re-skill employees in order to be retained in employment or to take up employment.

Technological change and its impact on society are subjects of many debates. Many predictions are made, mostly with some caveats. Time alone will tell. The report on the Foresight Project of the Department of Arts, Culture, Science and Technology (DACST) is a valuable document as it addresses the local situation. With the change in technology comes changes in worker competencies and values (see the table in 5.4.6). Traditional competencies and values are being phased out by outsourcing and contract work. Management will have to be trained to better understand the implications of these changes

Environmental factors do not have an immediate or obvious impact on the sector. Of concern is the unresolved issue of radiation from Cellular telephones. If it should be proved beyond doubt that these instruments can and do cause brain cancer, it could result in the collapse of the whole industry.

Key legislation to watch in 2001 for the sector has to do with E-commerce. Due to the failure of so many DotComs in the United States, it is something local business people will approach with caution. As this new economy matures and becomes stable, it could present many growth opportunities in South Africa. Input from all interested parties to the Green paper is vital to ensure that policies flowing from it result in sufficient protection for the consumer but do not stifle business, thus creating job opportunities. Large-scale training of entrepreneurs, professional and technical sector employees and the general public will be required if e-commerce is to become viable in South Africa.


The education and training supply in South Africa is inadequate to meet the needs of the sector, both in quantitative and qualitative terms. The SETA must work with all relevant government departments to change this situation. It must also use its tools such as Workplace Skills Plans, Learneships and Grant D to make a difference.

The sector strategy, as per the SAITIS project, centres around four goals ICT Sector Development ICT Usage Stimulation Human Resource Development ICT Innovation

The ISETT SETA objectives, by and large, support those of the SAITIS project. The Employment Needs analysis estimates about 20 000 job opportunities for the

sector in 2001. The Skills Needs analysis, based on a number of surveys, specifies the various skills required in the sector: Engineers, Technologists, System Architects, Professional Sales persons, Project Managers, People Managers, Skilled Technicians. Significantly, software is becoming as important in the Electronics and Telecommunications sub-sectors as in the IT sub-sector. The role of the ISETT SETA is to be both Enabler and Doer. It must conduct an RPL project for the sector, it must employ best practice in establishing the needs of the sector and coordinate the activities of the many developmental projects that can and do benefit the sector.

Chapter 9 continues with some specific action plans for the ISETT SETA to address the problem areas highlighted in the analysis part of the Sector Skills Plan. These plans are

1. Promote Equity in the workplace.2. Develop suitable Learnerships at key occupational levels, i.e. professionals,

management and skilled technical workers.3. Influence government departments and organs of the state to improve the level of

education in the country.4. With the assistance of big business in all sectors, develop and implement technology

centres around the country that can become Skills Incubators.5. Promote the re-skilling of employees currently in employment to forestall redundancy

and extend career opportunities.6. Establish links to other SETA's, especially in view of the extensive usage of the

products and services of this sector in all other sectors.7. By means of a technology train or bus, take technology exhibits to rural areas. Such a

bus already exists and members of the SETA's management team have inspected it and are in discussion with the organisation that developed and realised the project.

8. A number of action proposals were made by the Sector Skills Planning committee to deal with the brain-drain issue.

9. The implementation of short courses to address the skills gap problem in the short term.

10. Conduct research into the phenomenon of "the star employee who came from nowhere". These are individuals who surprise management and their peers alike as they learn high level skills (like advanced programming) by themselves and become champions in their own right.


11. Finally, the all important matter of supporting Small businesses (SMME's). The role of the ISETT SETA will centre around mentorship programmmes.

Chapter 10 contains the Vision, Mission, Policy, Priorities and Outcomes of the Sector Skills Plan for the sector and the SETA. Central to all of these are the National Skills Development Strategy (NSDS) Objectives of the government. The five objective are:

Developing a culture of high quality, life-long learning Fostering skills development in the formal economy for productivity and employment

growth Stimulating and supporting skills development in small businesses Promoting skills development, employability and sustainable livelihoods through

social development initiatives Assisting new entrants into employment.

Central to these objectives are the primary activities of the SETA. They are

Workplace Skills Planning through Skills Development Facilitators. Establishing and implementing National standards Establishing and launching large numbers of Learnerships in crucial occupations Establishing an effective ETQA function.

The SETA will also have special programs in collaboration with business and other organisations. A major, ongoing activity will be research to establish a skills inventory, to track the employment needs of the sector and changes in technology. This is equally important to do regarding the education and training supply side; the numbers of learners coming out of the education system and the relevance of their qualifications.

Chapter 10 concludes with a table of outcomes, all related to the success indicators relevant to each of the 5 National Skills Development Strategy objectives. There are outcomes for the longer terms (2005) and for the year ending 31/3/2002.

Chapter 11 sets out a procedure for Monitoring, Reporting and Evaluating the work of the SETA.

Chapter 11 is followed by the following Appendices:

Appendix A: South African Economic IndicatorsAppendix B: Skills Data (various sources)Appendix C: SIC CodesAppendix D: Grant D QuestionnaireAppendix E: General issues affecting connectivity in South AfricaAppendix F: Employment Equity in the Sector (DoL report)Appendix G: Derivation of the number of persons that could be HIV/AIDS positive in the sector.Appendix H: Acronym List


4 CHAPTER FOUR: Sector Profile

The sub-sectors in the ISETT SETA are rapidly converging. Technology itself results in the blurring of boundaries. Most business and many privately owned Personal Computers utilise Telecommunications to send and receive vast quantities of information. Electronics and Telecommunications enterprises have IT operations, e.g. Arrow Altech, Transtel, Spescom, Siemens. And, of course, electronic components are essential elements of Telecommunication devices and computers. Electronics can be viewed as the “glue” that holds everything together.

There are, however, some differences in the focus and business activity of sub-sectors in the ISETT SETA that enables one to determine some kind of diffuse boundary. At this juncture it is important to stress two important issues that affect all three sub-sectors. They are

There is sufficient overlap between the three sub-sectors to make a case for the consolidation of some training courses, e.g. Basic Electronics.

The whole sector is at the forefront of rapid and accelerating change. Whatever profile may emerge in this plan will probably be outdated by the time the 2001 plan is due.

For the sake of greater clarity and to allow maximum stakeholder participation, the profile of the sector will be presented in this plan according to the three sub-sectors. Note: The three sub-sectors are viewed by the SETA as having equal status.

4.1 Information Technology

4.1.1 Introduction

The IT sector has undergone a major transformation from the 1960’s and 1970’s when a few Multinational firms dominated the industry. At that time the product range consisted of Mainframe computers and their peripherals. Applications were few and mostly centred on pay-roll runs. Batch processing, using punch cards, was the modus operandi. Computers were seen by some as electronic monsters that would cause social problems such as mass unemployment and a boring work environment. To a large extent these dire predictions did not come true as computers created many new jobs and careers. Computers did destroy jobs and even whole professions, e.g. typesetting. Cosatu reports that many of their members still view computers as job destroyers and instruments of employee disempowerment, deskilling and control. The problem lies in the period between when jobs are destroyed and the ensuing period of slow growth in new jobs. Similar phenomena occurred through various era, e.g. the industrial revolution, the introduction of mass production, followed by automation and the implementation of robotics.


With the advent of the Personal Computer, Real Time Interactive computing, enhanced communication protocols, the internet and a whole new range of software operating and application systems and successive generations of computer languages, computers have transformed the way we work, shop, communicate, pay our bills and live our lives. New business opportunities have ensued. The development of this plan is taking place during a most exciting time period and, due to the large shift in the way humans conduct their affairs, will present major challenges to the ISETT SETA, particularly in view of the stark contrasts that exist in South Africa.

4.1.2 Defining the sector

It is no simple task to define the sector. The definition below was developed by the SSP committee based on the OECD definition.

“It is those business activities which facilitate, by electronic means and associated services and support, the processing, storage, communication, transmission and display of information, and it excludes the industries which create the information, the so-called ‘content’ industries.”

4.1.3 Types of Activities

The table below provides a brief insight into the IT sub-sector

Scope of the IT Sub-sector relative to the SETA

Main Activities:

The Sale, Supply, Development and Support of Computer Systems and Office Automation Products, including

Hardware Software Services

Mainframe SystemsMidrange SystemsSpecialised SystemsPersonal ComputersServer UnitsSystem UpgradesPeripherals: Storage Devices Printers Control Units RoutersEnd user products: Printers Terminals ATM’s Mobile computingFeatures: Storage control Memory cards Emulation cards Communication

Operating SystemsApplication Software e.g. Accounting Inventory control Payroll CAD/CAM JIT production Retail Banking Retail Desktop Productivity ImagingSoftware upgradesERP softwareUtility Products/Enablers

Feature Support products Emulation CommunicationSecurity Products: Virus control

ProgrammingMonitoring System AdministrationDevelopmentProject ManagementHardware MaintenanceSoftware MaintenanceInstallation PlanningInstallation/TestingTrainingCabling Supply ChainingWeb DevelopmentSupport ServicesBusiness analysisInternet Services


Cabling

CopiersWord ProcessorsSupplies: Toner Ribbons Media

Mirroring

4.1.4 Activities by SIC Code

SIC Code

Scope of Coverage Number of companies

Percentage by SIC Code

86001 Pre-packed Software 159 5.486002 Computer integrated Design 103 3.586003 Computer Facilities Management 97 3.386004 Computer Maintenance and Repairs 241 8.286005 Computer Rental and Leasing 18 0.686006 Computer Programming 467 15.986007 Computer Related Activities 1 838 62.686008 Call Centre and Customer Relationship Management

System Development (CRM) 12 0.4

Refer to Appendix C for information about SIC codes

4.1.5 Turnover and Size of the IT Sector Turnover for the year 2000 was estimated at R29.9 Billion of which 15.8 Billion will have been accounted for by Software and Services

4.1.5.1 Number of Companies and employees by company size group:

The data in the table below was extrapolated from SARS Levy payment reports.

Size Group No. of Companies Percentage of total

No. of Employees Percentage of Total

1 to 50 2738 93.29 26059 39.4751 to 100 117 3.99 9331 14.13101 to 150 34 1.16 5003 7.58151 to 500 35 1.19 10707 16.22501 to 1000 5 0.17 4144 6.28> 1000 6 0.20 10775 16.32Total: 2935 66019


4.1.6 Geographic Distribution

The data below is an estimate based on ISETT SETA research of 68 companies

Geographic Area % of companies

Gauteng 70W. Cape 9KZ-Natal 8Other 13

Most IT companies in Gauteng have their headquarters in either Sandton, Midrand or Pretoria/Centurion. Multi-national companies are well represented, e.g. Microsoft, SAP, Unisys, IBM, Compaq, Dell, Computer Associates, Compuware Comp, EDS and Hewlett Packard. Office Automation companies like Minolta, Gestetner and Xerox are well established. Local giants are PQ (Comparex Holdings), Didata and Datatec with some smaller companies like Ideon and Datacentrix enjoying rapid growth. Much of the growth of Didata and Datatec can be attributed to acquisitions made overseas in Europe, Australia and the USA. Didata recently had a very successful listing on the London Stock Exchange and is already considering further acquisitions in Europe and may even list on the NASDAQ in time.

4.1.7 Salary Data

Several recent surveys have highlighted the large earnings evident in the IT industry. Whilst it is true that IT companies do pay well, it must be stressed that these surveys concentrated on “IT professionals”. This term is used to describe the top echelons of the industry from Project Managers down to programmers and help desk personnel. Excluded from these surveys are hardware technicians, clerks, accountants, bookkeepers and all other workers. In addition, many of those surveyed work in banks, life assurance companies, retail and many other sectors. Therefore the average salaries for these “IT professionals” in such surveys are inflated. One such survey found that the average salary was R210 480 p.a. The survey conducted by the SETA of 90 companies included all workers and the average salary was found to be R171 456 p.a.

Salary Spread by IT Job Category:

System Analyst: R 253 333ERP consultant: R 198 000Oracle consultant: R 192 000Account Manager: R 179 700IT Marketing: R 174 000Network Manager: R 155 244WAN Specialist: R 144 000Database Manager: R 138 000Web Master: R 114 000


MCSE: R 96 000Network Technician: R 90 000Support Technician: R 78 000

(Source: JobNavigator)

4.1.8 NQF Levels

Future Workplace Skills Plans or Surveys, no doubt, provide more accurate information about NQF Levels in the Sector. For this plan, some good available data was used to determine the probable numbers and percentages of workers for different NQF Levels. Combining the Employment Equity data (88719 employees) and the SARS Levy Reports data on the number of employees in the sector, the following data was extrapolated:

Employment Equity Report, DoL June 2000 for the ISETT Sector (permanent employees)

Calculated number of

total employees by

occupational level

C x 142598

NQF Level

A. B. C.

Occupational Level No. of employees Per Cent of the total

Top Management 513 0.58% 824 5 - 8

Senior Management 1419 1.59% 2281 4 - 8

Professionals, experienced, mid-mngmt

10405

11.73%

16727 4 - 8

Technicians, qualified, junior mngmt. Superv.

32672 36.83% 52519 4 - 6

Semi-skilled, discretionary decisions

36746 41.42% 59064 4

Unskilled, defined decisions 6964 7.85% 11193 1 - 3Total: 88719 142608*

* The difference in total employees is caused by calculations of a fraction of a per cent.

NOTE: This data covers the all three sub-sectors. There may be some meaningful differences in some of the occupational categories for this sub-sector.


4.1.9 Race, Gender and Disabled distribution

The Department of Labour recently provided the ISETT SETA with the Employment Equity report (June 2000) for the sector. It covers 92149 (65%) of the workers in the whole ISETT Sector. The report, in the form of 3 tables, can be found in Appendix F (12.6). The report found that the sector is dominated by white males. Here are a few details:

Top Management: 72.71% are white malesSenior Management: 69.35% are white malesProfessionals: 61.28% are white malesSkilled technicians: 49.60% are white males

Conversely 58.79% of the unskilled workers are African males.Overall Blacks (Africans, Indians and Coloureds of both genders) make up 48.81% of the workers, females 31.08% and 0.33% of workers in the sector are Disabled.

4.1.10 HIV/AIDS in the Sector

No definitive data on the prevalence of HIV/AIDS in the sector is available. Combining various available data, a derivation could be made. The data consists of the following SARS Levy payment reports (number of employees in sector), the Employee Equity report from the Department of Labour (large sample of 92149 employees by skill level) and the ING Barings HIV/AIDS report which provides data on the ratio per 100 employees, by skill level, that are likely to be HIV/AIDS positive.

According to this combined data, the number of possible HIV/AIDS positive workers in the sector is 24203. NOTE: only the permanent employees, i.e. 88719 in the DoL data were used in this calculation.

This data does not tell us what the difference may be between the three sub-sectors. It also does not take into account race, gender or age factors. To check the data and the method used to arrive at this number, refer to Appendix G (12.7) "HIV/AIDS" NB: Refer especially to the quote from the ING Barings report.

4.1.11 Employer and Employee Associations

The Information Technology Association (ITA) is an employer association that goes back many years under various guises:

1934 – Transvaal Typewriter & Office Appliances Traders Union1938 – Transvaal Typewriter & Office Appliances Association of South Africa1956 - Office Appliances Association of South Africa1967 - Business Equipment Association of South Africa


1989 – BEA Information Technology Association of South Africa1996 – Information Technology Association of South Africa

It has a membership of 287. The Head Office of the ITA is located at 355 Pretoria Avenue in Randburg. Tel: (011) 789-3805, Fax: (011) 789-3327, E-mail: [email protected] and the Website is http://www.ita.co.za

There is also a regional office in Cape Town, Tel: (021) 426-2322.

The Computer Society of South Africa (CSSA) is a representative body of practising professionals in the computer industry. Its members come from many different backgrounds and bring together a variety of skills and experience. What they have in common is their interest in computing and in maintaining high standards of practise in the computing profession. Current membership is 3700, countrywide.

The Black Information Technology Forum (BITF) was formed to address issues of concern to Black Professionals and Entrepreneurs in the IT industry. The primary vision of the BITF is to:

Develop significant participation in the industry by black professionals and black owned business.

Redress historical imbalance and Promote access to IT for disadvantaged communities.

Membership of the forum is open to any individual who supports the forum’s vision. Companies may associate themselves with the forum by becoming sponsors.

The BITF Western Cape formally constituted itself and adopted its constitution in April 1995. One of the key objectives then was the creation of a National BITF structure with BITF representation in every province. This objective was finally realised in June 1999, when the first National BITF executive committee was elected.

E-mail address: http://www.bitf.org.za

The IISA is an umbrella body incorporating various IT associations. It currently has a membership of 11 organisations. The IISA is located at 355 Pretoria avenue, Randburg and the telephone number is (011) 789-3805.

4.2 Electronics Sector

4.2.1 Introduction

Government and industry have traditionally seen the electronics sector as a strategic industry from a job creation point of view. It grew in importance during the sanction


http://www.bitf.org.za/

http://www.ita.co.za/

mailto:[email protected]

years as a provider of large scale employment opportunities and as a strategic supplier to the telecommunications and defence industries.

In general the strategic importance of the industry has declined with the event of the post apartheid South Africa and general globalisation. World-class competitors and a host of new technologies have placed local manufacture under threat to the extent that only a few manufacturers of traditional electronics systems remain.

To a large extent the future of the industry will depend on the development of world class state of the art systems for export to world markets.

Due to technology enhancements and the creation of ever smaller, yet more powerful electronics systems, the trend is to value add through the use of machines rather than through people. Employment levels in manufacturing have consequently declined steadily over the past 10 years.

Because of the complexity of the new age systems, and the necessary hardware and software support, employment demand for world class Graduates and Technicians have increased. (Source: EIF).


The same definition used in the IT section applies, in general terms, to the Electronics sector: “It is those business activities which facilitate, by electronic means and associated services and support, the processing, storage, communication, transmission and display of information, and it excludes the industries which create the information, the so-called ‘content’ industries.”


Electronics enterprises are extremely diversified. Today electronic components can be found in aircraft, cars, computers, telecommunications equipment, weapons systems, security systems, office equipment, household appliances, consumer products and even toys, to name just a few.

Some of the major activities in the sub sector include the following:

Medical ElectronicsTransport ElectronicsMetering/measuring ElectronicsWeapons technology, including missiles, guidance and navigation systemsWhite goods (kitchen appliances)


RadarOther weapons systemsLogistics systems Consumer Electronics (hi-fi, cameras, etc)Distribution (Supply Chain)Telephones Telecommunications infrastructureCommercial aviation systemsVehicle tracking systemsBusiness Equipment

Some companies also have an IT operation. Many of the major companies require high-level IT programming skills such as C++ and Java and networking skills.

4.2.4 Activities by SIC Code

SIC code Scope of Coverage Number of companies

% by SIC code

87142 Research and Development of Electronic Equipment and Systems 97 12%87143 Import and Product integration of pre-manufactured Electronic, IT

and Telecommunications Equipment (and repairs) 711 88%

NOTE: Refer to APPENDIX B (12.2) for further information on SIC Codes.

4.2.5 Turnover and size of the Electronics Sector

The Electronics Industry Federation reports a Turnover of R 10 Billion per annum

Based on SARS levy payment reports, the information in the table below regarding the size and distribution by small medium and large company dynamics was derived. Note the relative large number of small companies in the sector (95% of total companies, representing 21% of employees are in the size group of 1 to 50 employees).

Electronics Sub-Sector

Size Range No. of companies Percent of the total No. of employees Percent of the total1 to 50 769 95 3185 2151 to 100 17 2 1030 7101 to 150 6 0.7 684 4151 to 500 7 0.8 1550 10500 to 1000 6 0.7 4500 29> 1000 3 0.4 4374 29Total 808 15323


4.2.6 Geographic Distribution

The geographic data below represents an estimate.Geographic Area %

DistributionGauteng 75%W.Cape 11%KZ-Natal 9%Other 5%

4.2.7 Salary Data

Due to incomplete information on SARS levy reports it is not possible to provide accurate salary data such as the average for the whole sector. It is, however, useful to list a few companies anonymously to establish some sense of what the industry is paying on average per annum:

Type of Enterprise Average Annual salary

Business Equipment supplier R 107 215Parastatal, developer & manufacturer R 134 780 Consumer Electronics supplier R 66 264Multinational/Diversified R 116 444Cell Phone supplier R 64 500Electronic component supplier (small) R 52 000

4.2.8 NQF Levels




total employees by

occupational level

C x 142598

NQF Level

A. B. C.


Top Management 513 0.58% 824 5 - 8



10405

11.73%

16727 4 - 8



32672 36.83% 52519 4 - 6


36746 41.42% 59064 4


* The difference in total employees is caused by calculations of a fraction of a per cent.




Top Management: 72.71% are white malesSenior Management: 69.35% are white malesProfessionals: 61.28% are white malesSkilled technicians: 49.60% are white males

Conversely 58.79% of the unskilled workers are African males.Overall Blacks (Africans, Indians and Coloureds of both genders) make up 48.81% of the workers, females 31.08% and 0.33% of workers in the sector are Disabled.





This data does not tell us what the difference may be between the three sub-sectors. It also does not take into account race, gender or age factors. To check the data and the method used to arrive at this number, refer to Appendix G (12.7) "HIV/AIDS"NB: Refer especially to the quote from the ING Barings report.

4.2.11 Employer and Employee associations.

The Electronics Industry Federation (EIF)The EIF is an employer association. It was established in 1991 and consists of 30 members. Their Physical address is 338 16th road, Randjiespark, Midrand 1685. The postal address is PO Box 1980, Halfway house 1685.

The Electronics & Telecommunications Industries Association (ETIA)The ETIA is an employer association and was established in 1996. It has a membership of 34. It is located at Metal Industries house, 42 Anderson Street, Johannesburg. The postal address is PO Box 1338, Johannesburg 2000.The telephone number is (011) 833-6033.the e-mail address is [email protected]

The Kentron Workers Union (KWU) was established in 1995 and has a membership of approximately 650 Kentron employees.

The South African Institute of Electrical Engineers (SAIEE)The SAIEE was established in 1909 with a membership of about 5000.1000 members are students with a 50/50% split between Universities and Technikons.3000 have completed a 4 year Electrical Engineering Degree.1000 are Diplomates (Technologists and Technicians)The SAIEE is located at 18a Gill street, Observatory, Johannesburg 2198. The postal address is PO Box 93451, Yeoville 2143. Tel: (011) 487-3003/6

SA Electrical Workers Association (SAEWA)The Electrical Workers Association was established in 1934. It has about 24000 members Who can be found in all industries in South Africa. Members of this union are at NQF Levels 1 to 5. The union is located at 85 Power house on the corner of Simmonds and Wolmarans streets in Braamfontein. The postal address is PO Box 9692, Johannesburg 2000. Tel: (011) 403-7696, Fax: (011) 403-1986

National Union of Metalworkers of South Africa (NUMSA)Membership: 200 000Postal Address: PO Box 260483, Excom, 2023Physical Address: cnr Bree and Becker streets, Newtown, JohannesburgTel: (011) 832-2030Fax: (011) 833-6330E-mail: [email protected]



Other organisations/associations with a presence in the sub-sector are HR Forum for the Electronics Industry The Radio and TV Union Mewusa SAWU Mine Workers Union(artisans) The Engineering Council of South Africa (ECSA)

4.3 Telecommunications

4.3.1 Introduction

Telecommunications technology is probably the most dynamic of all current developments. Data transmission now exceeds voice transmission and wireless devices are opening up new opportunities. Thomas Molete communications (Pty) Ltd placed an article on ITWeb on 31 January 2001, entitled, "Access the battleground for telecommunications network". The reference is to access products. The world market for these products was US$11.3 billion in 1999. By 2003 it will have almost doubled to US$21.6 billion. George Debbo of Marconi Communications is quoted as saying that the broadband market is currently growing internationally at a staggering 68%. He added that the next generation networks (NGN's) will be unified, multi-service, carrier class, scalable and evolvable to achieve a deliverance of 5 Megabytes of bandwidth right through to the consumer's home.

However, some perspective is needed. The following is an extract from the Department of Communications ICT strategy document. In Chapter 1 "The National ICT Challenges" in the introduction we read as follows:

"Given the global scenario, South Africa finds itself faced with a set of daunting challenges both at the policymaking process for the ICT's and at the implementation phase. These challenges must be addressed by policy decisions and concrete projects for the benefit of its citizens, taking into consideration the regional development imperatives of the African continent.

Despite the enormous effort from developing countries, the digital divide is rapidly widening, requiring even more focussed information and Communication Technology (ICT) policy, prioritisation, and funding."

It continues by looking at the primary issues:

1. Internet Access. Some 150 000 new users are connected each day, worldwide. In November 2000 the 400 million user mark was exceeded. This is made up as follows:

Africa: 3.11 million (of which more than 2 million in South Africa)


Asia Pacific: 104.88 millionEurope: 113.14 millionMiddle East: 2.40 millionCanada & US: 167.12 millionLatin America 16.45 million(Source: Nua Internet Surveys, December 28, 2000)Note: the numbers used by the DoC report were outdated.The DoC says that increasing access should be a policy objective.

2. Content: According to the DoC, South African content in negligible compared to the United States which is responsible for 85% of the 1.5 to 2.1 billion pages on the World Wide Web.

3. E-Commerce: In 1998 electronic and e-commerce transactions amounted to $45 billion and estimates predict that it will increase to $7 trillion by 2004. In South Africa the 1998 figure was about R1 billion ($200m) or 0.44% of world total. It is expected to increase to R47 billion ($7.01 billion) by the end of 2002. E-commerce in South Africa is thus a small fraction of the world total.

4. Government to Business E-Commerce: As almost 90% of South Africa's current e-commerce is made up of Business to Business transaction and (according to the DoC) most of these are Small to Medium sized businesses, there is an opportunity for Government to Business transactions to play a major role in stimulating growth by means of electronic procurement together with policy to assist SMME's to develop e-commerce capability.

(Source: Dept of Communications)


The definition below covers the ICT field of activities:

“It is those business activities which facilitate, by electronic means and associated services and support, the processing, storage, communication, transmission and display of information, and it excludes the industries which create the information, the so-called ‘content’ industries.” Telkom with more than 44362 employees and 45bn in assets is by far the largest enterprise in the ISETT SETA and, therefore, will dominate this profile of the Telecommunications sub-sector.

Telkom, together with other service providers constitute some 0.6% of the world telecommunications market. A key feature of the market is the disparity in the distribution of telephone services, with some areas having as few as 0.5 telephones per 100 people. The growth of the cellular sector has resulted in a higher rate of installation of new cellular connections than new fixed lines.


With revenues exceeding R22bn., Telkom will be one of the largest privatisation initiatives. Warburg Dillon values Telkom at between R43bn-R69bn, or 3%-5% of the JSE. Deutsche Bank says Telkom's valuation is closer toR96bn, of which 31% is attributable to it's 50% share in Vodacom. Telkom would be one of the JSE's top five companies in terms of market capitalisation.

Some commentators feel Vodacom is the key to a successful Telkom listing, and, therefore, is unlikely to be listed separately. The EIF and others believe that Telkom must be listed separately as shareholders do not want joint listings. Vodacom is said to be worth betweenR50bn-R70bn. Investors will need to know whether Telkom by issuing licenses to two cellular networks (with a third in the pipeline), and ending long-term supply contracts, competition has begun to transform the industry. Government has indicated that it wants to consolidate the telecommunications interests of State- owned companies Eskom and Transnet into a single entity so forming the core of the Single Network Operator (SNO). Transnet has a large stake in both M-Cell and MTN.However, problems surrounding the granting of the third cellular licence is of grave concern for further market liberalisation . Potential investors fear Government may procrastinate in its privatisation plans, not least its listing of Telkom on the JSE by the fourth quarter of 2001 and with the licensing of the SNO in 2002.will have one or more competitors, when it's exclusivity expires in May 2002.

4.3.2.1 Other operators

It needs to be mentioned here that several other operators have their own telephone networks such as Transtel, Denel, Eskom and Datavia.


Globally, the number of mobile phone users is expected to surpass PC users by mid-2002 and it is believed that many mobile terminals will be Internet enabled and that mobile data will be faster than current ISDN lines. A wide range of companies - from Network operators to banks, Internet firms and media companies- is testing mobile data applications.

Enterprises in the sub-sector are engaged in the following activities:

Fixed line telephone service providersMobile telephone service providersRadio and Television signal distributionTelephone mast installation and maintenanceTelephone mast equipment installation and maintenanceComputerised telephone systemsSwitchboards supply and support (PABX)Supply and installation of cabling (including fibre optics)


Internet Service ProvidersSale and supply and support of telecommunications instruments (e.g. telephone handsets)Maintenance and repair of radio and TV sets

4.3.4 Activities by SIC code.Telecommunications

SIC CODE SCOPE OF COVERAGE Number of Companies

% By SIC Code

75200 Telecommunication 249 2675201 Telegraph 5 575202 Television and Radio Signal Distribution 219 2375203 Cable TV Services 29 375204 Telephone 180 19 75205 Radiotelephone 180 1996131 Providing Radio/TV transmission signals 85 9NOTE: Refer to the APPENDIX for more details about SIC Codes.

4.3.5 Turnover and Size of the Telecommunications sub-sector

Turnover in the Telecommunications sub-sector is estimated at R50 billion annually.

The data below has been extrapolated from SARS levy payment reports:

Company Size Range (number of employees)

Number of Companies

Per Cent of total Number of employees

Per Cent of the total

1 to 50 865 91 5611 951 to 100 63 7 3487 6101 to 150 9 1 889 1151 to 500 5 0.5 1591 3501 to 1000 2 0.2 1423 2> 1000 3 0.3 48255 79TOTAL 947 61256(Note: percentages have been rounded up)

Taking into account that at 26 January 2001 Telkom had 44362 employees, its impact on total numbers is obvious. Conversely, 99% of the companies in the sub-sector can be classified as SMME's. In terms of the number of employees in the sector they, however, only contribute 16%, again underscoring the impact of Telkom.

4.3.5.1 Additional Input

The table below, produced in 1998 by the Dept of Communications is useful here as it shows the increase in service providers and the decline in manufacturing. Note the difference in total employment figures compared to the table above, can be accounted for by the fact that some specialised manufacturing in the sector is excluded from the ISETT SETA and the large number of retrenchments at Telkom since 1998. It does not


necessarily mean a decline in the sector. The growth in service providers shows clearly that meaningful growth is taking place in the sector.

BROAD OCCUPATIONALCATEGORY

TOTAL SERVICE PROVIDERS Manufacturing1998 2003 %

growth1998 2003 %

growth1998 2003 %

growth

Professional 22280 25665 15 20971 24336 16 1309 1329 2Managerial 4742 5470 15 3942 4604 17 800 865 8Clerical/Sales/Service 16120 17804 10 13651 15358 13 2470 2446 -1Artisan 8463 8733 3 7568 7801 3 895 932 4Semi-/Unskilled 45082 45532 1 35539 36989 4 9543 8543 -10TOTAL 96687 103204 7 81671 89089 9 15016 14115 -6

(Source: Dept. of Communications) Employment growth varies considerably across occupational categories; it is highest amongst high-level jobs (i.e. professionals and managers). Employment in the clerical/sales/service category is likely to show moderate increases (mostly sales staff), whereas demand for artisans, semi-skilled and unskilled workers is likely to be low.

4.3.6 Geographical distribution

NOTE: This data has been estimated

Geographical Area Distribution (%)Gauteng 70Western Cape 10Kwa-Zulu Natal 9Other 11

4.3.7 Salary Data

The SARS data as supplied to the SETA is incomplete in many cases (employee numbers and salary data not provided). It is however useful to list some individual company data on an anonymous basis. This will provide some sense of salaries paid annually on an average basis.

Type of Enterprise Average Annual Salary

Local diversified (medium size) R 119 540Private telephone networks R 44 444Diversified Large company R 123 936TV aerial supplier/installer R 56 250Large Telecoms company R 97 722

4.3.8 NQF Levels





total employees by

occupational level

C x 142598

NQF Level

A. B. C.


Top Management 513 0.58% 824 5 - 8



10405

11.73%

16727 4 - 8


32672 36.83% 52519 4 - 6


36746 41.42% 59064 4


* The difference in total employees (top to bottom) is caused by calculations of a fraction of a per cent.




Top Management: 72.71% are white malesSenior Management: 69.35% are white malesProfessionals: 61.28% are white malesSkilled technicians: 49.60% are white malesConversely 58.79% of the unskilled workers are African males.


Overall Blacks (Africans, Indians and Coloureds of both genders) make up 48.81% of the workers, females 31.08% and only 0.33% of workers in the sector are Disabled.




This data does not tell us what the difference may be between the three sub-sectors. It also does not take into account race, gender or age factors. To check the data and the method used to arrive at this number, refer to Appendix G (12.7) "HIV/AIDS"NB: Refer especially to the quote from the ING Barings report.

4.3.11 Employer and Employee Associations

The following organisations have a presence in the sub-sector:

The Communication Workers Union (CWU)This union has a membership of 35 008.Postal address: PO Box 10248, Johannesburg 2000.Physical address: 2nd Floor Darragh house, Wanderers street, JohannesburgTel: (011) 333-4351Fax: (011) 333-4527E-mail: [email protected]

The Broadcasting, Electronic Media and Allied Workers Union (BEMAWU)BEMAWU was formed originally in 1936 by technicians in Natal working for the SABC The Name of the union then was the South African Broadcasting Staff Association and the change to BEMAWU came about recently. It has a membership of about 1500 at the SABC and 200 at Sentech. NQF levels range from 1 to 7 and include riggers, engineers and managers.

The Salaried Staff Association (SALSTAFF) goes back to 1918 and was established by white collar workers at the then SAR&H. It has a membership of about 16000 at


TRANSNET (including TRANSTEL) NQF levels range from 3 to 7 and includes middle managers.

The Telecommunications Skills Development Forum (TSDF) is an employer representative association. It was formed in 2000 after some two years of preparation for the establishment of the ISETT SETA. It was preceded by the Telecommunications Education & Training Association (TETA). It is the result of the efforts of a small number of business people. It has a membership of 20 largely international companies. Contact with the TSDF can be made at:Tel: (011) 807-6199Fax: (011) 807-6684E-mail: [email protected] South African Transport and Allied workers Union (SATAWU)Membership: 103 218Postal Address: PO Box 9451, Johannesburg 2000Physical Address: 4th Floor Kine Centre, 141 Commissioner street, JohannesburgE-mail: [email protected]



5 CHAPTER FIVE: Factors Influencing Future Change

5.1 Policy Factors

Policy factors that will influence future change in the sector can be grouped under four headings:

1. Employment equity and Skills development2. Telecommunications Review3. SAITIS Project and E-commerce green paper4. Active Labour Market policy

5.1.1 Employment Equity and Skills Development

5.1.1.1 Employment Equity

The purpose of the Employment Equity Act, 55 of 1998 is to achieve equity in the workplace, by

Promoting equal opportunity and fair treatment in employment through the elimination of unfair discrimination: and

Implementing affirmative action measures to redress the disadvantages in employment experienced by designated groups, to ensure their equitable representation in all occupational categories and levels in the workforce.

The main challenge to employers in the three sub-sectors of this SETA lies in the massive task of developing very high level skills in the designated group (black people, women and people with disabilities).

The ISETT Sector has an enormous task ahead of it in this area. The Employment Equity Report, recently released by the Department of Labour, shows that the sector is to a very large extent dominated by white males, especially in the occupational categories of Top and Senior management, Professionals and Technical staff. For details, see Appendix F (12.6)

5.1.1.2 Development and Training.

The Skills Development Act (Act No. 97of 1998) and the Skills Development Levies Act (act No. 9 of 1999) provide a legislative and financial framework that aims to improve the skill levels of the work force and to reduce unemployment. By means of the Levy-


Grant system Government is engaging the private sector in a partnership that could help to increase South Africa’s competitiveness and improve the quality of life of workers. If properly implemented, this new legislation could become the catalyst for accelerated skills development.

5.1.2 Telecommunications Review

5.1.2.1 Telecommunications colloquium

The Department of Communications has called a colloquium on the weekend starting 2 February 2001, of interested parties to provide inputs that could shape telecommunications policy for the future. Telkom has indicated that it will argue for a duopoly until 2007. It further wants facilities based competition, an equitable interconnect agreement and a "mirror image of the Telkom licence" for a second national operator.

5.1.2.2 Deregulation/Privatisation.

This is a sensitive issue, which is not seen as a positive move by all parties. Whereas business looks forward to the deregulation of state enterprises, Trade Unions see such moves as threats as they will lead to more unemployment. The most pertinent case of privatisation and deregulation for the SETA is, undoubtedly, that of Telkom. On 17 July 2000 a press report said that it was likely that the government will list an initial 20% of Telkom equity next year. This will be the first step in the process of privatisation and will hold important implications for other parastatals like Transnet, Sentech, Denel and Eskom.

The Department of Communications announced in June that at least one more fixed-line telephone operator would be entering the market in 2002, with the telephone market likely to be liberalised by 2007. This presents enormous challenges to Telkom. Moving away from a monopoly and having to compete with at least one other company will inevitably mean a further reduction of staff numbers. Telkom has reduced staff by 12 000 to 49 000 in the year ended March 2000 at a cost of R1.2bn. It now has 85 employees per 10 000 lines against North America’s 30 workers which has become an international benchmark.

Privatisation is a major undertaking if one considers some of the numbers involved.

TELKOM Runs 5.5 million fixed linesRevenue has doubled to R22.6bn in past 5 yearsOwns 50% of cell-phone operator VodacomTotal employees: 57 496Total assets: R45bn


DENEL Total employees: 14200Denel aerospace has attracted interest from European consortia.

TRANSNET Contributes more than 3% of SA's GDPTotal operating assets: R43bnRetained income 12 months to March: R779mR5bn capital expenditure programme for this financial yearSpoornet net profit: R84mTotal Assets: R56bn

ESKOM Total assets: R70bnEmployees: 37 311Owns and runs 24 power stations40% of electricity sold to local authoritiesSells electricity to Lesotho, Swaziland, Botswana, Mocambique, Namibia and ZimbabweTotal assets: R75bn

Source: Financial Mail, 18 August 2000.

5.1.2.3 Labour Union views on privatisation

Initially Cosatu promised "blood on the streets" when government released its proposed amendments to labour laws. However, it praised Public Enterprises Minister Jeff Radebe on releasing his privatisation framework for a "greater understanding of the need to work with stakeholders" It remains, however, concerned about job losses. It estimates that 4000 jobs will be lost at Telkom and 17000 at Spoornet. It is also not impressed with a social plan to provide for retrenched workers, saying it amounts to no more than some financial advice and training. Cosatu says a more structural assessment is needed of where and whether work will be created by the restructuring

An ISETT SETA representative asked labour union representatives what the implications for training were in view of privatisation/deregulation. Below are their responses:

"It will take 5 to 15 years to fill the skills gap. It will also be difficult to attract investors" (SALSTAFF)"No job losses envisaged, provided focus remains on niche market" (Kentron Workers Union)."A great deal of retraining will be required. Better access to training is needed" (NUMSA)"Retraining and multi-skilling are two strategies that could work, but it must be done properly, i.e. the training should be up to a high standard" (Electrical workers Union)"Retraining and multi-skilling. Have agreement to this effect with employer" (BEMAWU).


5.1.2.4 Third Cellular Licence

The awarding of a third cellular network licence held a lot of promise of jobs and growth in peripheral business opportunities as well as the prospect of reduced costs for all users of cell phones due to increased competition. Equipment suppliers and black business groups welcomed the announcement by SATRA chairman, Nape Maepe in August 1998. It was then foreseen that a third licence could be awarded by the end of 1998.

Following nearly two years of negotiations and reports of irregularities, SATRA announced on 29 May that Cell C was the preferred bidder. But a final recommendation still had to be made to the government. This was duly done on 7 July 2000. The Communications Minister, Dr Matsepe-Casaburri was legally obliged to wait 5 days before endorsing or rejecting SATRA’s choice of Cell C. Nextcom, the consortium ranked third by SATRA, brought an urgent court application to prevent the minister from announcing her decision. This matter was, once again, thrown into limbo. On Friday, 28 July 2000 the court ruled against the SATRA recommendation and the minister was prevented from making an announcement in this regard.

The new regulatory authority, ICASA, announced on 25 January 2001 that it had filed an answering affidavit in the Pretoria High Court case the week before in order to try and resolve this outstanding issue.

5.1.3 The SAITIS Project and E-commerce Green Paper

5.1.3.1 The SAITIS Project

SAITIS stands for South African Information Technology Industry Strategy. The SAITIS project was conceived, in 1995, by Mr Jay Naidoo the then Minister of Posts and Telecommunications.

The goal of the project was to " bridge the global development gap and develop a robust, growing and sustainable South African ICT Sector that directly supports, and contributes to, the GEAR challenge of sustainable economic growth, social upliftment and empowerment." 37 Stakeholders were nominated, including the government and the Canadian International Development Agency (CIDA).

This Sector Skills Plan deals extensively with the SAITIS project in Chapter 7, "Sector Development Strategy". The ISETT SETA supports the aims, conclusions and recommendations of the project. Some ISETT SETA objectives are aligned with The SAITIS project, particularly in the area of skills development. I will therefore be part of the driving force to make these objectives into reality.


5.1.3.2 The E-commerce Green Paper

The recently released E-commerce green paper recognises four primary areas where e-commerce will play a role.

1. Business to Business (B2B). It is the integration of Supply Chain and Customer Relationship Management.

2. Business to Consumer (B2C). It is e-commerce or online shopping.3. Government to business e-procurement and4. Government to consumer information and service delivery

ITWeb reports that the issues to be addressed are "positively daunting" and that the regulatory environment that comes about from the process of consultation to White Paper (2nd Quarter 2001) and legislation/regulations (3rd or 4th Quarter 2001) must be conducive to business, to innovation, as well as improving the socio-economic conditions of as many South Africans as possible. One of the goals of the Green Paper is to take e-commerce to the masses and use it as a driver for socio-economic upliftment and growth. Another goal is to empower small businesses. (Source: ITWeb)

For more information on E-commerce, refer to Chapter 5.2 "Economic Factors"

5.1.4 Active Labour Market Policy

The Skills Development Act and all of the work of the SETA's are in support of Active Labour Market Policy.

5.2 Economic Factors

From the point of view of the sector, economic growth is vital, both locally and in other countries where local companies are active. The products sold by the sector are of a capital nature and sales are, therefore, largely dependent on growth. Even the services segment is driven by growth. This section will deal with those aspects that influence growth in the global economy.

The year 2000 started on a very positive note. The new millennium held a lot of promise. The stock market echoed the positive sentiment. In February South Africa was given an Investment rating by Standard and Poor. This augured well for our economic prospects. The National budget was upbeat and the Minister of Finance, Mr Trevor Manuel, made important tax concessions to all taxpayers. Around the world things were looking up after the slow recovery of emerging markets during 1999. Investors had reason to smile as the graphs moved strongly upward.

Standard & Poor’s raised South Africa’s sovereign risk rating to investment grade in February this year after Moody’s Investor Services raised the outlook on its investment grade rating of South Africa from stable to positive. Since then risk premium has


increased. Standard Bank’s group economist, Iraj Abedian, says the following factors have contributed to this rise in risk premium:

The regional instability, especially Zimbabwe. The sharp drop in the rand. Signs of inflationary pressures.

There is, however, some good news for the economy as a good growth in Gross Domestic product occurred in the third quarter of 2000.

GDP, GOOD TURN-AROUND IN THIRD QUARTER 2000

On 27 November 2000, STATS SA announced revised data for 1998, 1999 and 2000. The revised data is the result of more comprehensive and reliable information that has become available. The new data has resulted in economists predicting a growth rate above 3% for 2000. Third quarter growth was 3.8%, mainly due to a bumper maize crop.Sectors that dragged down the GDP are mining and government services. Other major factors blamed for growth less than the 3.5% expected by the Finance Department are the floods, oil price hikes, the perceived threat of interest rate rises and regional political instability. (Source: Business Day)

The chart below provides GDP date since 1994 to the present with outlook for the fourth quarter and projection for the year 2000.

South African Gross Domestic Product by Quarter

'94 '95 '96 '97 '98 '99 2000 2000 2000 2000 20001Q 2Q 3Q 4Q Year


5%

4%

3%

2%

1%

0%

Source: STATS SA

5.2.1 New economy woes (Dot-com shake-out)

Some analysts had been predicting for some time about the "New Economy" came true in 2000. The technology-rich NASDAQ fell by 28.9% from March 10 to April 4. Put another way, $1.1 trillion of value was wiped out. The “technology bubble” had finally burst.

Slow growth in share value in traditional enterprises prompted investors to look elsewhere for more robust returns. The new economy enterprises, of which Amazon.com is the benchmark, provided this investment opportunity. Never before had there been such a rapid increase in share value as with the appearance of these “dot.com” enterprises. One of the most remarkable features of this phenomenon was the absence of profitability, which has always been a key requirement with traditional enterprises. Analysts and economists warned that this was a time bomb, which would eventually explode. After some earlier dips the downhill ride on the new-economy roller coaster gained momentum. By the end of 2000 nearly 100 US DotComs had failed and it was clear that the whole E-business arena would have to be approached with extreme caution.

5.2.1.1 November 2000 update on dot-coms

In the November 6, 2000 issue of Fortune magazine an article, "dot-coms what have we learned?" quotes several business analysts and comes to the following 12 conclusions or "truths" about e-business which could serve as some guiding principles to South Africa's own e-commerce entrepreneurs:

The Internet isn't as "disruptive" as we thought (Internet companies that sell something physical look like any other business)

If it doesn't make cents, it doesn't make sense (some dot-coms cannot even project when they will become profitable)

Time favours incumbents (the internet is an enabler, it has helped existing industry, not destroyed it)

Making a market is harder than it looks (companies that rushed into B2B have found that the time-honoured tradition of looking for the best price still prevails)

There is no such thing as "Internet time" (industrial transformation will not occur at a super fast rate)

"Branding" is not a strategy (creating an instant company is generally not possible) Entrepreneurship cannot be systematised (the "incubators" are still dodgy) Investors are not customers (some dot-coms are aiming their ad campaigns at

investors) The Internet still changes everything (failures of some dot-coms do not mean

nothing has changed, an awful lot has changed). The Internet changes your job (most affected jobs are travel agents, stock brokers,

sales people. The internet is both enabling and disruptive to jobs)


The distinction between Internet companies and non-Internet companies is fading fast (the Internet is becoming as pervasive as the telephone)

The real wealth creation is yet to come (the current situation with more and more dot-coms ending up in the "dot-com graveyard" is just a prologue. It is no different to previous changes in the way business worked)

5.2.1.2 An E-business evolution scenario

The Gartner group views E-Commerce as being in a very early stage of its evolution. They predict that, in time, some sanity and stability will develop and that the "True" E-Business will emerge around 2004-2005. Like other economic developments in the past such as the industrial revolution, mass production, automation and robotics, it will go through various phases, with lessons being learnt in each one, which will influence the next phase. Here at the beginning of 2001 we the world is going through shakeout and investor disillusionment phase. The chart below illustrates the historic and current situations and a scenario as to how E-business will evolve, as seen by the Gartner group.

E-Business Evolution

VisibilityEuropean IPO's "e" is best 2006-2008

1999 Investor disillusionment E-business is norm

US ChristmasBrick and mortar failures

Post Net US IPO's DotCom shakeout Optimised businesses 1997/8 "True" E-business

E-businessDotCom starts emerges

Internet BusinessWWW disillusionment

Peak of inflated

Technology expectations Trough of Slope of Plateau of Trigger disillusionment enlightenment Profitability 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2006 2007 2008

Source: Gartner Group


5.2.1.3 State releases Green Paper on e-commerce

The minister of communications, Dr Ivy Matsepe-Casaburri released a green paper on e-commerce on 21 November 2000. The green paper raised questions about legislation, tax, multilateral trade, intellectual property, security, consumer protection and payment systems. It also asserted that a white paper would be published by the second quarter of 2001. The minister said, "If we don't speed up change, many of our people will be left behind and the economy will not grow. Mike van den Bergh, a member of the board of the E-commerce Association of SA agreed, saying, "South Africa's delays with e-commerce were sending a negative message to investors that we don't want to commit resources and that we aren't transparent." Lisa Thornton of IT attorneys Thornton & Morris said, "One great disappointment was that neither the relevant parastatal nor the government had done anything concrete to ensure or encourage access to communications." The minister, however, said that the slow process had allowed the department to avoid some of the e-commerce pitfalls other countries had encountered. (Source: The Star Business Report, Tuesday, November 21 2000).

There is ample evidence that e-commerce is the way a lot of business will be conducted in the future and, indeed, is already being conducted in the developed world. There is also no doubt that e-commerce is going through severe growing pains and that casualties abound. South Africa must become part of this new way of doing business as fast as it can establish the capacity to do so. The report by Mc Connell International in the next section provides research data on the issue.

5.2.1.4 E-business in South Africa (Mc Connel International report).

The following report by McConnel International has just become available: Risk E-Business: Seizing the Opportunity of Global E-Readiness

The report examines 42 critical economies for their E-Readiness- their capacity to participate in the global digital economy. The countries were selected because they represent the source of the next phase of world economic growth. They comprise nearly three-quarters of the world's population and a quarter of the world's GDP. Businesses whose supply chains or marketing plans require e-commerce in these countries must move quickly in an environment rich with risk and opportunity.

E-Readiness was measured on the 5 attributes listed below. The report contains a summary of the research findings. Each of the attributes for each of the 42 countries is rated according to a colour coding. Below are the findings for South Africa for each attribute followed by a legend for the colour coding:

Connectivity Red, but improvingE-Leadership AmberInformation Security AmberHuman Capital Red, but improvingE-Business Climate Red, but improving


Legend:

Blue - indicates the majority of conditions are suitable to the conduct of e-business and e- government.

Amber - indicates improvement needed in the conditions necessary to support e-business and e-government.

Red - indicates substantial improvement needed in the conditions necessary to support e-business and e-government

From this report one can conclude that South Africa needs to make major improvements all round in order to reap the rich benefits of E-Business. The ISETT SETA has to play a major role in the attribute HUMAN CAPITAL in this regard.

The full report is easily obtainable on McConnell International's Website. For direct access to the report, just enter the following

http://www.mcconnellinternational.com/ereadiness/EreadinessReport.htm

McConnel International's Website is http://www.mcconnellinternational.com

5.2.2 Globalisation

The world has shrunk due to the rapid evolution of technology in the latter half of the 20th

century. Jet travel, Live Satellite Television transmissions of sport and other events (even wars) are now commonplace. Video conferencing, electronic banking, credit cards, cell phones and the Internet have combined to speed up and simplify business processes. We have seen mega-mergers in banking, retail, media, pharmaceuticals and vehicle manufacturing with the Daimler-Chrysler merger the largest of all so far. We have seen the formation of the European Union and a move to a single currency. Globalisation has not been welcomed by all, witness the protest actions in Seattle and Switzerland at the meetings of the World Bank and IMF. Globalisation presents a major challenge to South Africans. Because we are under the microscope we have to deal with some of the issues below:

The Brain Drain. Too many highly qualified people are leaving the country. The difficulty in attracting much needed foreign investment as an African country. The difficulty in attracting foreign investment due to the high crime level and the

perception that our labour laws are inflexible. Even the government has admitted that there have been “unintended” consequences to the labour legislation.


http://www.mcconnellinternational.com/

http://www.mcconnellinternational.com/ereadiness/EreadinessReport.htm

On the positive side, a number of companies in the sector such as Datatec, DiData, Spescom have made acquisitions abroad and, in so doing, are making significant contributions to foreign exchange income.

5.2.3 The effects of HIV/AIDS on the economy

The Department of Home Affairs released figures on death patterns, which were presented to the presidential advisory panel on 4 July 2000 by Dr Malegapuru Makgoba, the president of the Medical Research Council. These figures show an alarming change to the normal bell curve where the highest number of male deaths during 1990 occurred at ages 60 to 70 compared to 1999-2000 where more men died between 35 and 40 than any other age group. More women are dying between the ages of 20 to 30 than ever before. Dr Makgoba said, “It can only be explained by the peak incidence of AIDS”. Dr Alan Whiteside, a health economics researcher at the University of Natal spoke at the same meeting and said, “The full impact will unfold over the next few years and there is no doubt that it will be devastating in all sectors, starting with health and education.” Some projections on the economic effects of AIDS are

An estimated R7.2-billion was spent on educating those of a productive age who died of AIDS in 1999-2000.

By 2003, 12% of highly skilled workers, 20% of skilled workers and 27.2% of un-skilled workers will be infected, according to a study by ING Barings. It will cost an estimated R250 000 to replace each skilled worker lost.

Medical aid claims are expected to rise rapidly and some schemes could face bankruptcy.

It will cost the public health system R16 900 a year to treat each AIDS patient. Eskom estimates it will spend R400-million a year on pensions, medical aid, lost

productivity and recruitment of new workers from 2005 onwards.

It is not known what direct effects the HIV/AIDS pandemic will have on the sector, as no reliable information exists on the incidence of HIV/AIDS in the sector. The ING Barings report gives the following weights to highly skilled, skilled and semi- and unskilled workers in determining cost of replacement of such workers:

Highly skilled: 1.91Skilled: 1.07Semi & unskilled: 0.65

The ISETT Sector has some of the most highly skilled workers in the country. Looking at the implications of the above weighting, it is clear that the impact of HIV/AIDS can be severe in the sector, especially when one takes into account the existing shortage of skilled workers and the effects of the brain drain.


5.2.4 DTI and Ntsika focus on SMME's

Dr Zavareh Rustomjee, Director-General of the Department of Trade and industry in his foreword to the publication "State of Small Business in South Africa" says in the following excerpt, "Many have, within the last five years or so, come to recognise the importance of the SMME sector, particularly with respect to its potential to create jobs. It is for good reason, therefore, that Government has sought, within a broad market economy framework, to develop and strengthen the sector. Although it is too early to say whether or not the policies and programmes initiated in this regard are succeeding, the statistics reported in this publication show promise."

This publication is the result of a joint project of the DTI and Ntsika Enterprise Promotion Agency. It contains research data into the economy and how SMME's fit into the economy. The publication estimates in chapter 6.4 that in 1998 small enterprises accounted for 28% of GDP, and medium enterprises for 13%. Together the small and medium enterprise category accounted for about 41% of GDP in 1998.

In the ISETT Sector there is a large number of SMME's:

Size range IT Elec-tronics

Tele-comms

1 - 50 2738 769 86551 - 100 117 17 63100 - 150 34 6 9

This is a very positive aspect of the sector, which can give a push to the DTI's initiative. It is likely that the contribution of the sector will be in the area of services. Small enterprises would fit in well with the whole movement towards outsourcing that is taking place in the sector.

5.2.5 Summary of Economic Factors

The major world economic concern at the beginning of 2001 is the expected "recession" in the United States. There is talk of either a hard or a soft "landing". These fears could affect the whole world, including South Africa.

The South African economy has some positive aspects:

Good Economic Fundamental such a Fiscal Discipline. Inflation under control with a good outlook. Improved Gross Domestic Product for the third quarter 2000 with a good outlook. The possibility of some substantial Japanese investment. The meeting of the cabinet to look at economic issues. Good performance of local IT stocks with foreign investments. Major opportunities could come about from E-Commerce


The opportunities that SMME's have to make a positive impact on the economy

There are, however, negative aspects that will affect the economy; some of which have external causes:

The, already mentioned, slowdown in the economy of the United States. The poor performance of technology shares. This affects this sector directly. The fuel price. This seems to be changing but time will tell whether this is a lasting

turn-around. Regional instability. South Africa needs to do a lot to capitalise on E-Commerce opportunities The continued poor performance of the Rand. No meaningful foreign direct investment. The negative effects on the economy by the HIV/AIDS pandemic.

On the whole, this "mixed bag" has a positive bent but will need work from government and business people alike. The ISETT SETA and the sector are well placed to make a positive contribution to the economy.

NOTE: Appendix A (12.1) contains various tables and graphs which served as source information for this section.

5.3 Social Factors

5.3.1 Unemployment

STATS SA reported recently that 40 300 jobs were lost during the first quarter 2000 which is a reduction of 0.8% over the previous quarter. In the year since March last year the formal sector laid off nearly 162 000 people which represents 3.3% of the workforce. Most job losses were in government, manufacturing, construction and mining. The number of job losses in the three sub-sectors of this SETA is not known. Telkom, however, has reduced staff by 12 000 during the year ending March 2000.

The October 1998 household survey data was made available recently by STATS SA and shows a strong movement away from the formal to the informal sector. According to STATS SA, the survey found that total employment remained constant at about 9.3-million in the two years from September 1996 to 1998. About 300 000 formal sector jobs were lost during the period. At the same time numbers of informal sector jobs appear to have grown by a similar amount. Though precise information is not available, the quality of the new informal sector jobs is almost certainly lower than that of the lost formal sector jobs. By contrast, it is estimated that some 4000 skilled IT professionals are working on a contract basis.


Some hope for formal sector jobs lie in the granting of a license to a third cellular telephone service provider, direct competition for Telkom and opportunities created by e-commerce and new technologies such as WAP. These opportunities will only come about over the medium to longer term and would require people with high level of skills of which there is already a shortage.

5.3.2 Poverty

The international economics consultancy, Wefa SA, published a report in May on poverty in South Africa. It concluded that almost 57% of South Africans were living in poverty in 1996. Poverty is defined by Wefa in terms of household income with households earning less than the minimum level (R1500 per month for an average-sized family) being classified as poor. Racial differences were also evident in the report with more than two-thirds of blacks living in poverty while the figure for whites is less than 10%.

A World Bank report released in June illustrated the vast difference between sub-Saharan Africa and the developed countries. The region’s income is not much more than Belgium’s and is divided among 48 countries with a median GDP of just over $2bn- about the output of a town of 60 000 inhabitants in a rich country. Of the 10 million telephone lines, half are in South Africa. The report says Africa requires decisive action in four main areas:

Resolving conflict and improving governance to guide political and economic development.

Greater equity and more investment in African people Increasing competitiveness and diversifying economies and Better support from the international community.

The problem of poverty is so huge that it needs to be addressed a national and international level. The ISETT SETA can make a small contribution by using some surplus funds for ABET type training to enable disadvantaged people to acquire better-paid employment.

5.3.3 Rural development

Most businesses in the sector are highly concentrated in urban areas, particularly Gauteng, the Western Cape and the Durban/Pietermaritzburg area of Kwa-Zulu Natal. Tertiary educational institutions are similarly distributed. The previous two social factors, unemployment and poverty are more prevalent in these areas. The ISETT SETA can play a role by introducing technology to rural areas and to work with the DTI and Ntsika to establish SMME's in these areas.


5.3.4 Race and gender issues

Race and Gender issues will present major challenges to the sector. The Department of Labour recently released a report on Employment Equity in the Sector. It shows that the sector is dominated by white male employees. This is particularly the case in the upper occupations such as Top and Senior Management, Professionals and Skilled Technical workers. This report can be found in Appendix F (12.6).

5.3.5 HIV/AIDS

HIV/AIDS goes hand in hand with other social issues in this chapter, such as poverty and unemployment. HIV/AIDS is as much a social issue as it is an economic and health issue, especially as it is more prevalent amongst the youth of the country

5.3.6 Conclusion

These social factors present some of the more difficult and, seemingly insoluble, problems for the country, the government, employers and all citizens. The ISETT SETA has to align itself to Objective 4 of the National Skills Development Strategy and make provision for social initiatives, focussing on re-skilling and taking skills development to rural areas.

5.4 Technological Change

5.4.1 Introduction

"At the World Economic Forum in Davos, Switzerland, the new business Ethic that is being spawned by the growth of technology in developed countries was viewed with horror by many delegates" wrote Thomas L Friedman of the New York times in the Sunday Independent on 4 February 2001. He reports that there is a backlash brewing against the proliferation of technology in our lives. He goes on, "By 2005 we will see convergence of wireless technology, fibre optics, software applications and next generation internet switches that will permit anything with electricity to have a web address and run off the internet- from your bedroom lights to your toaster to your pace-maker (which will report your heart rate directly to your doctor)".

Light-hearted comments such as these have a serious side. There is much confusion these days about technology. Even sector experts and serious business people have different views about what is hot and what is not. Some say W@P is in, others say it is out. Along comes a third person who says it will be saved by Bluetooth. The reader could be excused for thinking that the humour is continuing. It is, however, true that W@P is suffering from older technology and has not lived up to expectations. Bluetooth is a wireless technology, which is delivered via a microchip with a built-in radio transmitter that can


mailto:W@P

mailto:W@P

send data between compatible devices at a very high rate, with speeds pegged at 400kbps to 721kbps. It will help users to avoid the inconvenience of cables, allowing devices such as mobile phones, PC's, printers and handheld computers to communicate with each other without wires. It may well make W@P into a more viable technology.

Bluetooth is but one of many new technologies. There will be integration between sight sound, touch and feel in the technology sense, third generations cellular service with speeds 200 times the current GSM service, satellite connectivity will grow, more powerful microchips, mobile computing (notebooks and powerful PDA's). And encryption is becoming essential due to the scourge of viruses. These are just some of the new technology factors that will influence change in all sectors.(Source: ITWeb)

5.4.2 Effects on business

A number of industry players were asked by ITWeb to predict the hottest IT trends in 2001. These are some of the business trends they predicted:

Conglomerates will offer genuine e-business,The establishment of M-commerce, The establishment of e-marketplaces, The Application Service Provider (ASP) market will start to gain ground, South African businesses will try to gain access to global markets, Customer Relationship Management (CRM) will grow,Supply chain management will grow, The integration of CRM and Supply Chain Management will take place, leading to further growth of Business to Business (B2B) e-commerce.Intelligent Websites will be developed, Outsourcing of non-core activities will continue and growMore insightful spending by companies will take place, as they become even more IT-literate, E-commerce will begin to mature,These are just some of the trends brought about by technology.

5.4.2.1 Growth of the Internet and e-commerce.

Some indication of where the world is going with the Internet and e-commerce comes from the IDC. They calculated that the total number of World Wide Web users 1998 was142.2 million, with estimated growth rates as indicated below:

1999 2000 2001 2002 2003196.1m 256.4m 327.3m 396.6m 502.4m

(Source: SAITIS baseline study)


mailto:W@P

HOWEVER, According to a Nua Internet survey, the global Internet users passed the 400 million mark in November 2000. In Africa there are 3.11 million users.

It does appear, however, that some traditional activities will continue. ITWeb asked some large companies to list their three biggest IT spend items in the 2001 budget. Three of them replied as follows:

Number One

1. Payroll upgrade2. Workflow3. Executive information system

Number Two

1. Customer Relationship Management (CRM) initiatives2. Infrastructure costs3. Accounting/financial system upgrades

Number Three

1. IT infrastructure for a proposed move to new premises2. Convergence of data, voice, video over IP3. Network infrastructure

5.4.3 Trends in the Electronics sub-sector

Companies in the Electronics sub-sector report the following trends:

Converging of technologies Decreasing numbers of blue-collar workers and increasing number of white-collar

workers. (blue-collar workers are not in this SETA). Outsourcing of manufacture, integration and services. A decrease in hardware with a commensurate increase in software as part of a product

offering. Contracting as a way of staffing short-term projects, either via labour brokers or

through the use of independent individuals.

These trends are very similar to those in the IT and Telecommunications sectors, underscoring that convergence is not limited to technology, but also happens in the way business is being conducted.


5.4.4 Human resource crunch

The demand for high-level skills caused by runaway technology developments cannot be matched by the supply of sufficient, adequately skilled professionals and technicians. Consequently the following situation has developed in South Africa:

The Skills Gap. There is an acute shortage of skilled IT workers all over the world. In the United States it is estimated to be as much as 1.2 million. In South Africa the situation is aggravated by poor matric results, preventing further learning, and by the brain drain.

The Brain drain. A study by Hodge, Meyer and Brown for the period 1989 to 1997 showed the country lost 41396 professional emigrants. The precise number of IT professionals is not known. Head-hunters confirm that IT professionals are included in these figures (Source: SAITIS Baseline study)

5.4.5 Foresight project

What will the future hold? What scenarios can we make? The ICT Foresight project of the Department of Arts, Culture and Science (DACST) led to a report published in 1999. The report is the result of extensive research and discussion. The report comes to some conclusions and makes some recommendations:

1. The need for an Enabling Environment, consisting of

Access to existing hardware, software and telecommunications products Globally accepted open standards and protocols A flexibly regulated local telecommunications market Uniform international copyright, patent and Intellectual Property protection Evolving national, regional, and continental information society strategies Sustainable economic models for 'FutureWeb' ICT expertise Knowledge consultancies and expertise

2. Recommendations resulting from the Strategic Technology Nodes

Solutions that are significantly related to near-term developments of 'FutureWeb' Intelligent solutions that replace people, enhance people, or enhance their

environment Knowledge and learning-intensive solutions Solutions essential for the sustained competitiveness of South Africa's ICT industry

3. Recommendations related to the Base Technologies


Future Chip Technologies Access Technologies Server and Database Technologies Distributed, Co-operating Application Platforms Digitisation Technologies Intelligent Systems Spatial Numeric Environments Security Technologies Biometrics Human language Technologies

In its summary the report concludes. "Finally, none of these recommendations is 'cast in concrete', Instead, they should be seen as a launch pad for more detailed discussion/investigations within the context of each reader's interests."(Source: DACST, ICT National Research and Technology Foresight Project, 1999)

5.4.6 The effects of technology on how people work and play

For the purposes of this plan it is important that the actual and probable effects of technology on humans must be considered. Electronic devices, which interconnect via cables, modems and wireless protocols, have become commonplace in the workplace and in many homes. As these multifunction devices become smarter, smaller and cheaper, they become more pervasive. Many people no longer require offices as their laptop computers and cell phones enable them to carry out most of their work “on the run”.

Tom Peters, author (In Search of Excellence) and management consultant has made a prediction that 90% of white-collar jobs in the United States will either be destroyed or altered in the next 10 to 15 years.

5.4.7 The effects of technological change on competencies and values

The Gartner group produced the following table to illustrate the effect of technological changes on both competencies required in the workplace and the values of workers.

COMPETENCIES: Changing the nature of IT Competencies

VALUES: Evolving Work Force Values


Traditional IT Competencies

Management leadershipTechnology leadershipBusiness liaisonComputing infrastructureTelecom infrastructureSoftware servicesData managementSystems integrationBusiness analysis

IT Competencies for Business Transformation

Architecture design and establishmentCustomer value actualisationRapid product deliveryTechnology surfing and injectionInformation leverageTransformation managementAlliance formationInfrastructure managementCost and risk management

5.4.8 Conclusion

In many ways the diagram above synthesises the issues around technology change. It shows that completely new competencies are evolving in the workplace, with the individual coming to the fore as an entrepreneur rather as an employee. Similarly the new values may cause consternation amongst conservative corporations, steeped in tradition. It is, however, a reality that will have to be dealt with as part of the modern landscape.

Technological change is a powerful, unstoppable factor influencing change in the world. For many reasons South Africa lags behind. The implications for education and training, however, are clear. Solutions will have to be found for the problems surrounding education and the brain drain if we are to benefit from the positive effects of technology change.

5.4.8.1 The role of the ISETT SETA

Whereas technological change will affect all sectors, the ISETT SETA is uniquely placed in the sense that it represents technology enterprises. It should, therefore regard itself as a SETA that should lead, rather than follow others. It will have to keep abreast of all technological changes to enable all sectors to prepare and train their employees adequately for the future. This implies that the SETA will have to have a well-staffed research and planning department, preferably with experience in the sector. On-going, well-constructed research projects, focussed on skills development, will have to be undertaken.Environmental Factors


Values shaping the traditional workforce

Employment as a relationshipOne employer, multiple employeesExperience through promotionCareer cultivationEnterprise-based valueInternally Developed innovationIT as the IS organisation's exclusive knowledge domainEducationOn-site, in-sight workManagers as task managersLearning as a motivator

Values shaping the new-millenium work force

Employment as a transactionMultiple employers, multiple employeesExperience shoppingCareer entrepreneurismMarket-based valueExternally acquired innovationComputers as an enterprise's lingua franca

Portfolio of skills and experienceRemote, all-hours workManagers as communicatorsLearning as a cost of doing business

Source: Gartner group

1999 was a record year for natural catastrophes worldwide. No less than 755 major catastrophes occurred compared to the previous record of 702 during 1988. Europe experienced three devastating gales. World wide, 255 windstorms, 190 floods and 111 geological catastrophes, including earthquakes and volcanic eruptions, were recorded. At least 70000 people were killed. Insured losses amounted to more than $22billion and economic losses came to about $100billion. Main reasons given for the increase in losses are population development and urban growth. Some modern developments are vulnerable to catastrophes. Reasons named for these natural events include changes in climate and the environment. More recently Southern Africa had first-hand experience with devastating floods early in 2000. (Source: Business day)

These disasters may not have a direct impact on the sector, apart from the fact that monies budgeted for spending on ISETT infrastructure will be diverted away to pay for damage to other areas. There are, however, some environmental issues that could have a more direct impact on the sector.

5.4.9 Cellular telephone radiation

The jury is still out on whether cellular telephones create radiation, which can cause brain cancer. No conclusive evidence currently exists that this is the case. Should new studies prove conclusively that cell phones do cause cancer, it could lead to the collapse of the whole industry.

5.5 Legislation

5.5.1 E-commerce

The Minister of Communications, Dr Ivy Matseppi-Casseburi has brought out a green paper, on e-commerce. Discussions and negotiations are now taking place between the government and interested parties with a view to bring out a White paper in the second quarter of 2001. This will, in turn, lead to legislation and regulations being promulgated in the third or fourth quarter 2001. This legislation could have a huge impact on the lives of South Africans. The sector and also the ISETT SETA will focus on these developments, as e-commerce will affect the sector directly. For more information on this issue see 5.1.3.2 and 5.2.2.3 of this SSP.

E-commerce, as it matures, will have a dramatic effect on the way business is conducted. It will affect all South Africans but will need the following:

Strong representations to the government to ensure a good regulatory environment are put in place.


Extensive preparation and training of entrepreneurs and workers to ensure that failures are avoided or, at least, minimised.

Putting the infrastructure and minimum training in place to ensure that rural people can use the technology.

(Source: ITWeb)


6 CHAPTER SIX: Current Education and Training Supply

Due to the fact that manufacturing in the Electronics Sub-sector was excluded from the scope and coverage of this SETA, it means that for the key personnel in the three Sub-sectors only highly qualified and experienced people are required. Tertiary education is now the minimum entry level and for many positions created by the change in technology and the brain drain, extensive experience (5 to 8 years) is required. Examples are Project Managers, Specialist Electronic Engineers and high level System Developers.

6.1 School output

A senior certificate makes a person eligible for a Technikon, whilst universities require a senior certificate with exemption.The pass rate with exemption in Senior Certificate has been declining; growth in output has been further affected by the number of passes in mathematics and science, see table below:

6.1.1 Number of matric passes in mathematics and physical science:1997PASSES % OF

MATRIC PASSES

MATHEMATICS PASS SG 74248 28.4MATHEMATICS PASS HG 22493 8.6MATHEMATICS PASS LG 18748 7.2TOTAL MATHEMATICS 115489 44.2

PHYSICAL SCIENCE SG 11548 4.4PHYSICAL SCIENCE HG 52573 20.1PHYSICAL SCIENCE LG 26658 10.2

TOTAL PHYSICAL SCIENCE 90779 34.7

(Source: Dept. of Communications)

6.1.1.1 Recent data

The following information was obtained from the Department of Education's Website. It compares the matric results of 1999 with those of 2000.

Year No. of students obtaining university exemption

% of total No. of students

1999 63 725 12.5%2000 68 626 14.0%

The all important "gateway" subjects saw some improvement too. Higher grade passes for Mathematics increased from 54.3% in 1999 to 64.6% in 2000. And for the Physical


Sciences from 61% in 1999 to 65% in 2000. Whereas these results are encouraging, considerable improvement is required.

Professor John Simpson, Research Manager of the Unilever Institute of Strategic Marketing and head of the School of Management Studies at the University of Cape Town says education is failing to equip students for the challenge of entering the job market. He says SA's ability to grow the economy, cope in a world dominated by information technology and compete internationally depends largely on the number of people with science-based skills. A new survey by the institute found that only 55% of adults over the age of 16, who have attended high school, studied some maths, only 41% studied some science and a mere 32% studied some commercial and business subjects. According to the Institutes Opinionscape Survey, South Africa's information technology sector will require a quarter of a million personnel within 5 years but only 7% of South Africans have received any computer science training. (Source: Financial Mail 26/1/2001)

6.1.2 Output from the Universities, 1992-1996

Output of first degrees in Electrical Engineering between 1992 and 1996 from the universities as a whole grew at an average annual rate of 5,4%; Computer Science / Data Processing grew 6.5% in the same period. Future output of first-degree graduates (all disciplines) is estimated to grow at an annual rate of 1.2% between 1995 and 2005. It is unlikely therefore, that electrical engineering and computer science will be able to sustain higher growth rates than this, unless programmes are put into place. (Source: SAITIS baseline study 1999)

NB: Refer to Appendix (12.2.1) for the HSRC study on BSc Electronic Graduate Engineers. It shows, not only the problem of insufficient supply, but also the Race and Gender problem not being resolved. This has important implications for Employment Equity.

6.1.3 Output from Technikons, 1992-1996

The average annual growth in first diplomas awarded in Electrical Engineering was -1.8%; the equivalent in computer science was +5.5%. It is estimated that the growth of electrical engineering diplomas will remain constant between 1995 and 2005; for computer science 2.4% p.a. (Source: SAITIS baseline study 1999)

6.1.4 Industry Suggestions


At a meeting held on 8 August 2000 (details in introduction) at the ISETT SETA by representatives of the Telecommunications and Electronics sector, a number of suggestions were made:

Private sector collaborative involvement in the development of curricula and the provision of practical training should increase.

Partnerships between industry and HE need to be formed, and knowledge shared. Postgraduate students should be more actively assisted by industry with their projects.

Mentoring of students by industry in close co-operation with academics. Internships of up to two years should be created at private organisations.

Curricula should address the phenomenon of merging technologies. Curriculum adjustments are needed at technical colleges to provide lower skills

(combined theory and practice) in telecommunications. Shorter courses on telecommunications-related aspects (such as

law/policy/regulations) should be developed by HE, in co-operation with industry, to create a broader understanding of telecommunication among the people working in the industry.

Larger organisations in the field should work together to establish ways of sharing existing training resources in an effort to increase capacity.

Government to provide training incentives to organisations experiencing shortages. Closer co-operation between industry and HE should commence with the setting up

of an action committee/forum, consisting of members from universities, technikons, technical colleges, the industry and SAQA to address the needs of the industry.

6.2 National Education & Training Initiative Appropriate to the Sector.

If insufficient attention is given to creating a pool of potential mathematics/science graduates in schools, technikons and universities, it is unlikely that the Sector skills demand will be met in the near future.

6.2.1 Schools, Technikons & Universities

Many of the problems currently being faced can be directly attributed to the old systems having to be restructured in such a way that these inequities can be addressed.The pass rate with exemption fluctuated over the period 1992-1996, and the 1997 pass rate of 12.4% was actually lower than in1993 (15.8%). Despite the increasing number of candidates over the period, the absolute number of persons passing with exemption declined. (HSRC Telecommunications Study, 1998).

Fewer than half of the pupils who obtained a Senior Certificate passed with mathematics (44.2%, while fewer than 10% passed with mathematics on the higher grade. Just over a third (34.7%) of pupils who obtained SC passed with Physical Science, and just over 10% passed with Physical Science on the higher grade. A mathematics and/or physical science


pass on higher grade are usually the minimum requirements for persons who want to obtain a university qualification in one of the key skills areas in the Sector. Technikons usually demand at least a mathematics and /or physical science pass on standard level for IT-related qualifications (HSRC Telecommunications Study, 1998: 26, as provided by the National department of education).

Generally, the schools that do have computer facilities tend to be the historically white schools which were far better funded by the State and whose parents had a higher average income. In addition, the vast majority of schools with computer facilities are urban based. Initiatives such as SchoolNet SA, Microsoft’s Digital Village in Soweto, and Telkom’s 1000 Schools programme could therefore have a direct impact on raising the general levels of computer literacy in this country, and also increase the potential pipe-line for IT-related skills in rural areas.

Some preliminary findings resulting from the 1999 IT in schools survey: About 50% of the country’s schools have electricity and 25% have no running water; Only about 2000 (7.5%) of South African schools have adequate telephone lines,

electricity and computers to contemplate the use of IT in schools; IT infrastructure in schools follows closely the socio-economic profiles of the various

provinces with the Western cape and Gauteng having the best infrastructure; Most schools use IT for administration and management purposes, and not to support

learning initiatives; In only less than half the secondary schools surveyed, did learners spend more than

three hours per week on computer learning skills; In schools where computer studies were offered as a course, 74% of students had

access to computers after hours, whereas schools where the subject was not taught this dropped to 47%;

The three major constraints identified were inadequate material resources, infrastructure constraints in school buildings, and inadequate educator skills for computer use.

Unless the widespread access to computers and computer studies is not addressed at school level, It is unlikely that the Sector will see the required potential resource base in the near future.

The poor performance of the school system puts a substantial restriction on the ability of the universities to increase the number of graduates emanating from the system. The universities will have to rely on other measures, such as higher pass rates, drawing students from mature age groups and other parts of the higher education system, to increase the output of graduates (HSRC Telecommunications Study 1998).

Since matriculants do not need exemption to enter a Technikon, the technikons will probably have greater scope to increase the output of students over the next five years. However, the growth in the number of passes between 1993 and 1997 has been small and this factor will nevertheless, limit the number of diplomates emerging from the Technikons (HSRC Telecommunications Study 1998).


Although the HSRC study focused primarily on high level human resources in the telecommunications industry, the rest of the IT industry will be drawing from this same pool of graduates.

The output of diplomates is slightly better for computer science students than for electrical engineers, but if compared to the overall demand figures, it should be apparent that the demand cannot be met by current supply.

The skill shortages experienced by telecommunications industry pertain not only to the number of people qualified in a particular field, but also to the combination of skills required in one person. In the HSRC survey, it was often cited that the convergence of technologies brought about the need for the integration of engineering skills and information technology skills. The current supply of high-level human resources (HLHR) does not provide for this need, nor is there readily available information on this for the broader IT industry.A quote from the HSRC’s 1998 Telecommunications Study:

“It is extremely difficult for forecast shortages or surpluses within specific occupations. A major problem here is that there is not always a neat match between qualifications obtained from the education system and the particular occupations themselves”

Quote from Kadar Asmal:“From 1994 onwards the number of black graduates had increased on average by 13.3% over the past four years. In 1994, 14 439 black university students successfully completed their studies, as compared to 1998 where 23 805 degrees were awarded.”For 1998, 14% obtained degrees in Science (including Health), Engineering and Technology, 12% studied business or commerce, and 74% were awarded degrees in the humanities and the social sciences.” No statistics were available for Technikons for 1998.

6.2.2 Urban concentration of Education

The universities, technikons and the better schools are concentrated in the larger centres. This means that young people in rural areas and mostly from a poor economic background have little chance of getting a quality education.

6.3 Government & Private enterprise initiatives

6.3.1 Houwteq IT & Telecommunications Software Training and Development Centre

Houwteq is a learning centre run by the Department of Communications (DoC), at the Denel Aerospace Division facility, Houwteq, near Grabouw in the Western Cape. The


pilot year initiated an information technology training programme for historically disadvantaged students who have displayed a science, engineering and technology potential (SET) through having obtained a B.Sc. degree, mostly at universities not offering engineering degrees.The scope of this project is to respond timeously to market demand, enhance human resource development, research and development, standardisation of software specifications and equipment testing. The training centre will amongst others primarily focus on the following components: Telecommunications software engineering; Telecommunications equipment testing and calibration; Electromagnetic compatibility (EMC) and safety; Telecommunications software and technology; National telecommunications spectrum management R & D; Skills development for telecommunications standards management; Skills development for information technology for communications.

NOTE: The Institute for Satellite Communication under the auspices of the Department of Communication has a major project running at Houwteq in the Western Cape. The Institute has presented to the ISETT SETA Executive Committee. The presentation covered the depth and breath of the initiative and their commitment to subsequent training programs. The ISETT SETA Senior staff paid a visit to the site and has opened up formal discussions with the Department of Communications in order to establish which parts of this program the ISETT SETA can support and what format the support can take.

6.3.2 Technology enhanced learning initiative (TELI)

This initiative focuses on the implementation of various key projects, which introduce and use technologies effectively in South African education and training.The Strategic Planning Committee has identified six “lead” projects which it believes can serve as an effective platform for the implementation of the TELI projects to create a “technology – enhanced learning network.” These projects are as follows: Supporting curriculum development and delivery in three key areas at grade eight

level; Delivering technically oriented vocational education, in three areas of national

priority, combining on and off the job training; Developing a generic information literacy course for use in schools, community

centres, industry – based training sites, and other appropriate sites for teaching and learning;

Professional development of educators in the use of technologies in education and training;

Training and supporting managers of learning centres of different kinds; Running a pilot provincial project to test new strategies for introducing technology to

support the management and administration of education and training.


In support of these lead projects, various other projects will also be initiated, many of which are linked. These projects are not subordinate to the lead projects. Rather, the lead projects will depend heavily on the successful implementation of the enabling projects and are intended quite literally to lead the way in terms of providing models, which can be adapted and used in different contexts and educational sectors. As this starts to happen, enabling projects will need to grow in scope and reach in order to provide support to new projects. They are as follows: Establishing structured relationships between the Department of Education and the

major physical infrastructure providers in order to ensure that all sites of teaching and learning are equipped with basic infrastructure within five years;

Encouraging new approaches to making decisions about the use of technologies in education and training;

Establishing a clearing- house of information and web site to support technology enhanced- learning;

Co-ordinating an audit of existing technology – enhanced learning resources at different sites of teaching and learning;

Developing internationally acceptable technical standards and protocols for technologies to be used in the South African education and training system;

Establishing a funding mechanism to support the effective introduction and use of technologies and to initiate and support course materials design and development initiatives;

Contributing a “technology – enhanced learning” perspective to the development of policy on the professional development of educators;

Developing a coherent and co-ordinated strategy for providing educational direction to the development of a network of community centres;

Developing an instructional design course, covering course materials design and development for a range of media and technologies;

Making available an introductory course on the use of the Internet; Establishing qualifications and standards for information and communications

technologies; Integrating quality assurance and evaluation into all proposed initiatives; Developing generic quality assurance and evaluation tools.

6.3.3 SchoolNet SA

Established November 1997, SchoolNet SA is a national NGO developing and expanding the use of the Internet in South African schools. The major feature of SchoolNet’s model is to build and work through provincial school network structures. SchoolNet SA seeks to support educators and learners in transforming education through the application of IT’s by providing leadership, expertise and developing effective partnerships in the areas of: Internet connectivity and appropriate technology; Human resource development and capacity building; Content and curriculum management and development; Advocacy and marketing.SchoolNet SA is a public/private sector partnership.


Private sector partners include Microsoft, Internet Solution, Cisco, Mweb, Intercom, Nortel, Sun Systems, Uniforum, 3Com, GasSoftware, Brilliant Software Solutions and Pinnacle Communications and Telkom SA

6.4 In-company & branded training

The bulk of the training in the sector takes place within companies or is branded training, mostly provided by independent training providers. In the case of systems engineers and software developers, the training often takes place overseas and takes the form of “residencies”. Such training can last up to 6 months and costs about R 100 000 per person. This also applies to hardware training but such courses are of shorter duration. Training in program languages and specific skills is offered by a large number of Independent training providers. One can also add to this category so-called “soft skills” such as management training, Customer Relationship Management (CRM) and other personal development courses.

6.4.1 Independent Training Providers

The IT Industry Training board for many years conducted assessments and granted approval to Independent Training Providers who specialised in IT skills training. The ISETT SETA is continuing with this function. A list of all approved Training Providers can be found on the ISETT SETA Website, http://www.isett.org.za. There are, however, many other training providers who are not approved.

6.4.2 Education & Training Quality Assurance (ETQA)

The ETQA function of the ISETT SETA is being established and will have to play a lead role in ensuring that the right training is done at the right time for the right number of people at the highest possible quality standards. In this regard the Skills Planning function must work with the ETQA function and launch surveys to better understand and anticipate education and training needs in the sector and other sectors using the products and services of the sector.

6.5 Perspective from a developed country

The following is a quote from a study by the U.S. Department of Commerce, Office of Technology Policy, America’s New Deficit: The Shortage of Information Technology Workers”

“Mismatches between what universities teach and what industry needs



While workers with degrees from two- to four-year computer science programs are attractive to potential employers, many employers have found some skill sets lacking in many of these graduates. For example, graduates may be superb computer theorists, but employers are looking for IT workers skilled in networking/distributed computer environments and large software projects, who have real world experience, and who are capable in business and industrial settings.

Industry Practices and Expectations

Information technology is advancing rapidly, causing frequent changes in skill requirements. A decade ago, the Internet was a tool used mostly by researchers at American Universities. Today the Internet and the World Wide Web are information tools for the masses, which has driven up the demand for skills needed to create and support on-line information services. According to one estimate, 760 000 persons are now working at Internet-related companies.

Even in established segments of software discipline, such as software programming, change is rapid. Software market leaders constantly update their programs used in a wide range of work place applications, causing employers to demand that new hires have the latest skills”

Although the South African community of IT workers is considerably smaller than that of the US, the above extract from their study is largely applicable to the South African situation.

6.6 Conclusion

The findings of the US Department of Commerce as reflected in chapter 6.5, above, serve as a good entry point to conclude this chapter on Skills Provision. The issues in South Africa as they apply to the ISETT Sector (and many others) can be listed as follows:

Poor Matric results, especially in respect of Mathematics and Science represent a core problem to the provision of future potential entrants into the sector. This problem is further compounded by the fact that many rural schools have poor facilities, poor teaching staff and, in many cases, no electricity.

Insufficient numbers of university students sign up for Engineering degrees as required by the sector enterprises.

The rapid change in technology create the kind of problems referred to by the US Department of commerce; universities lag far behind in meeting the real needs of the scientific and business world. It is likely that South African universities are no better placed to meet these needs.

The relevance and effectiveness of in-company training is difficult to assess. It probably varies from excellent to mediocre. This is, of course, mere speculation. It


can, however be better evaluated if companies are encouraged to appoint assessors or train their staff as assessors and to align their training with the National standards.

Private training providers have been active in the sector (mainly IT) for some years now. They too, will have to meet national standards and, more importantly, keep up with technological developments. This means a constant revision and updating of training materials.

To meet immediate and future challenges that face the sector, the conclusion one has to arrive at is the education and training supply in South Africa is inadequate. On the one hand is the sector with its need for highly skilled Engineers, Managers, Professionals and Technicians. On the other hand are the issues as listed above. The ISETT SETA will have its work cut out to make even a small positive impact on this conundrum.


7 CHAPTER SEVEN: Sector Development Strategy

7.1 Adopting the SAITIS Project analyses

The SAITIS project Working Draft document, version 4.9 lists key strengths, issues and opportunities as determined by various working groups in the project (SWOT analysis). The results of their analysis are summarised below.

ICT INDUSTRY WORKING GROUP'S ANALYSIS "Developing the ICT Sector"

Key Strengths:

Sector has small number of large indigenous companies that have become multinational.

Several major players in sector are State Owned (Telkom, Denel) The sector has a large and growing number of SME's The sector has a number of foreign owned multinationals

Key Issues:

As far as capacity is concerned, the sector is fragmented. There is a need to create a sustaining environment for sector growth. The need to gain access to reliable and affordable information to expand the market

for branded SA ICT products globally

Key Opportunities:

Support growth of large indigenous companies. Accelerate growth of ICT SME's. Encourage partnerships/joint ventures between foreign owned multinationals and

State Owned Enterprises. Focus on developing nascent ICT clusters in Gauteng and Cape Town. Leverage strong local ICT market for regional and global expansion.

ICT USAGE WORKING GROUP'S ANALYSIS "Stimulating the Demand for ICT Products, Services and Applications"

Key Strengths:

South Africa has been a forerunner in developing an information strategy South Africa has a well-developed core infrastructure linking the major centres. There is general awareness in SA in respect of specific technologies such as the

Internet, wireless usage, smart cards and e-commerce.

Key Issues:


Understanding, creating potential and increasing demand in the local market for ICT products and services.

Identify short and long run opportunities in applications development. The current information infrastructure serves mainly the core areas in the country. How to go about making ICT applications/products available to disadvantaged

groups.

Key Opportunities:

Accelerate the development of infrastructure to stimulate ICT demand. Move aggressively towards a more open, competitive environment. Focus on SA indigenous strengths, e.g.: Internet, wireless communications, and smart

cards. Adopt incentives to encourage the Financial Services Sector to take a leadership role

in promoting the adoption of advanced ICT applications in other sectors. Exploit SA's reputation as a world leader in the development of community

telecentres.

HUMAN RESOURCES WORKING GROUP'S ANALYSIS "Human Resources Development"

Key Strengths:

SA has a good core education and training system and infrastructure to build on.

Key Issues:

To participate globally, SA must ensure the development of skills are on a par with or exceed world standards.

There are a number of employment workforce issues: How to deal with job losses caused by ICT implementation How to deal with structural problems causing low job growth. How to deal with the impact of HIV/AIDS on the workforce. How to counter the impact of the brain drain.

Key opportunities:

Build existing education and training to rapidly develop required ICT skills training. Work with education and training institutions to closely link their outputs with the

ICT needs of the country. Engage the labour movement to proactive development of the ICT sector.

INNOVATION GROUP'S ANALYSIS "Stimulating ICT innovation"


Key Strengths:

Strong base to work from, especially in applications area.

Key Issues:

How to build a culture of innovation. How to utilise innovation to enable and empower disadvantaged communities. Insufficient commitment to ICT R&D Accelerating the flow of technology from research to commercialisation. Protection of intellectual property rights.

Key Opportunities:

Build on the National Research and Technology Foresight Project to develop an innovation culture.

Build on the substantial R&D capabilities of the CSIR and its commitment to fostering innovation.

7.2 Developing a skilled labour force

Most of the content of this next section is based on the SAITIS Baseline study. That study looked primarily at the IT and Telecommunications (ICT) sectors. However, with the convergence in the three sub-sectors, much of what is contained herein also applies to the Electronics sub-sector.

7.2.1 The environment

An appropriately skilled ICT workforce requires the following to be in place:

An adequate supply of the skills required by the ICT sector; Processes to ensure that the necessary skills change to meet the sector requirements; A supply of people who combine strong technical abilities with essential management

skills; Appropriate policies and programs to help SMME’s to overcome the difficulty in

attracting the requisite skills for them to develop; Readily accessible information on trends and conditions in the labour market enabling

correct career and learning choices, and investment decisions The youth market must not only be technically competent, but also adequately

prepared for the world of work; More focused funding of education and training as well as new methods and

initiatives are required to assure continuous skills upgrading A closer working relationship between HR and other key players.


7.2.2 Enhancing public sector infrastructure

Interested parties all require assistance in order to cope with the growing complexity and increasing pace of change in the labour markets. A greater understanding of these dynamics will be brought about by the following:

Setting out the required skills in science and technology; Stakeholders adopting standard definitions, measurements, and technologies in

relation to the necessary skills; Setting up a new national labour market research fund;

7.2.3 Utilising labour market information more effectively

By creating a centre for labour market statistics at STATS SA; Ensuring that all sides collect/provide comprehensive figures pertinent to sector

needs.

7.2.4 Competing for foreign highly skilled workers

To be facilitated by

employers having a greater say in the selection of such immigrants; Making it easier for SA universities/.colleges to recruit well qualified foreigners to

teaching positions; Simplifying procedures for granting of permanent residence; Professional associations simplifying accreditation procedures for immigrants.

7.2.5 Improving skilled workers employment opportunities

Many firms, especially SMME’s, experience difficulty absorbing the highly qualified graduates particularly in science and technology. Further, R & D investment remains small compared to other nations thus exacerbating skills migration. By expanding investment in basic/applied research and by helping knowledge intensive SMME’s to expand, opportunities can be created so reversing the job/skill drain. This process to be expedited by:

Increasing the universities and technikons capacities to carry out high quality basic/applied research

Allowing national granting councils to underwrite not only direct but also indirect research costs supported by them

Improving the return on public and private investments in this sector


Stimulate growth amongst small, knowledge intensive firms by establishing science parks in order to provide the technological and management services to the said firms, particularly in the start up phase; and establishing a program to assist these firms absorb recent graduates in science and technology.

7.2.6 Expanding the skills base

There is insufficient evidence of a generalised shortage of technical skills in South Africa at present, although shortages do exist in specific sub-sectors.Many high school, college and university graduates lack the necessary technical and management skills that employers require.To succeed in the knowledge based economy, modernising the formal and informal learning systems are clear priorities. Such a foundation will be assisted by:

Improving the learning environment of young children; Making work experience programs more widely available in the schools together with

appropriate monitoring; Ensuring teachers are well equipped to deliver essential skills education; Creating stronger links between schools and the work place; Ensuring that there are sufficient qualified teachers of mathematics science and

technology; Attracting more young people into learnerships; Ensuring that business/management skills are included in the skills curriculum; Improving the capacity of post secondary institutions by way of:

Increasing the funding of university/technikons to restore run-down facilities and equipment and to address strategic priorities;

Improving the recruitment/retention of science and mathematics graduates by improved resourcing.

7.2.7 Decision making structures

A nationally funded, private sector lead executive agency is necessary to properly identify and develop skills and strategies.

7.3 Developing a culture for innovation

The SAITIS Baseline study had this to say about innovation:

7.3.1 Creating ICT innovation awareness viz:

Inculcating the said culture in firms throughout SA; Familiarise young people with the basic concepts of risk management, innovation and

entrepreneurship during their entire education;


Providing innovation/entrepreneur courses; Creating awards and success stories programs for innovators/entrepreneurs; Building on the capabilities of CSIR and other key R & D bodies – gathering and

disseminating global ICT innovation intelligence throughout SA; Promote international innovation linkages through strategic alliances, joint research

projects, research and student exchanges, partnerships etc. Build on the National Research and Technology Foresight Project to focus ICT

innovation in priority areas, and creating chairs in specific technical areas, funded on a 50/50 basis, public/private;

Expand The DACST Innovation Fund to enable the development of new ICT products, services and applications with attendant infrastructure.

7.3.2 Facilitating ICT technology transfer

Establish and/or strengthen incubators and technology transfer/commercialisation offices in universities and government research establishments.Develop a government support program to reduce the risk inherent in commercialising of promising private sector ICT initiatives at the same time ensuring that intellectual property rights are fully protected.

7.4 IT expenditure

A total of 456 organisations participated in the SAITIS IT Jobs and Skills Scan, conducted between September and November 1999. The sample covered 500 240 employees nationally.

7.4.1 Organisations by IT budget 67% of respondents had an IT budget R500 000 or less. Nearly 40% of IT vendor

respondents have an IT budget between R50 000 and R500 000, and 36% of IT vendor respondents have an IT budget greater than R500 000. Comparatively 25.6% of IT users have an IT budget between R50 000 and R500 000, and 32% have an IT budget greater than R500 000.

7.4.2 Organisation by IT payroll Most respondents did not provide an indication of IT staff payroll expenditure (44.5%

of total respondents). 49% of IT users did not provide an indication of IT payroll expenditure. 34.9% of IT vendor respondents have an IT payroll expenditure of R500 000 – R2 000 000.

7.4.3 IT outsourcing IT services outsourcing has become a definite trend both here and internationally.

This study's findings show that on average 64% of respondents outsource some of their IT services, although to varying levels. At the top end 24% of respondents


outsource 75% of their IT services. 56% of IT vendors indicate no outsourcing of any IT activities. 32% outsource more that half their IT services.

Utilities 70.5%, construction 57.5%, wholesale trade 57.3%, retail trade 55.7% and accommodation/food services 56.8% all outsource more that 50% of their IT services. The following all outsource less than 20% of their IT services:

Computer systems design/related services 7.2%

Arts/entertainment/recreation 9.2%Management of companies/enterprises 10.8%

7.5 IT social investment

81.4% of respondents in the sample did not invest in any IT social projects during 1998. Amongst IT user organisations 85% indicated no IT related social investment activities. Nearly 60% of IT vendors indicated no such investment and 39% indicated an expenditure of R500 000 or less. No organisation in the sample spent in excess of R10 000 000 on such projects during 1998.

7.6 IT Research and Development

70% of respondents in the sample did not undertake expenditure on IT R & D. 73% of IT user organisations indicated no expenditure on IT R & D during same period, 50% of IT vendors did not undertake any expenditure on IT R & D, and 28.8% spent less than R100 000.

7.7 International revenue from IT products and services

47% of all IT vendors currently generate revenue outside South Africa. 33% of IT vendors generate some revenue from other African countries.

7.8 IT products and services

IT vendors were asked to indicate which products/services they provide. Of the 66 IT vendors in the sample, 53% are involved in services/consulting; 44% in software development; 26% in IT training. 50% of companies involved in recruitment are in the R50 000 000 – R200 000 000 revenue category; and 50% in the R1 000 000 – R10 000 000. Companies involved in outsourcing are evenly spread across all revenue categories. 80% of companies in both software development and Internet services/e-commerce generate less than R10 000 000 revenue.

7.9 IT training expenditure

The findings in this study indicate a significant under-investment in IT skills training. 40% of respondents reported that they do not invest in IT training or are unable to


provide details of such expenditure. 43% of IT users do not invest in IT training or could not report their investment. Amongst IT vendors only 22.7% report expenditure on IT training in excess of R100 000 pa; 24.2% report no IT training expenditure. Over R10 500 000 was spent by the IT vendor organisations on IT training during their latest financial year. IT user organisations spent almost R40 000 000 on IT training (IT users represent 85% of the number of companies in the sample and 99% of the total number of employees). Organisations in the public administration sector spent the most per company on IT training (R964 000). IT vendors spent the most on IT training per person employed followed by the educational services sector, management of companies/enterprises sector and finance/insurance.

7.9.1 IT training expenditure by staff sizeLarge (+500 staff) organisations spent the most on IT training per company (R363 000). Small company’s (0 –10) employees spent the most per employee (R5000).

7.9.2 IT training expenditure by revenueOrganisations with a revenue of less the R1 000 000 spent on average R60 500 per company on IT training. Organisations with revenues greater than R500 000 000 spent on average R67 per employee on IT training.(Source: SAITIS Baseline study 1999)

7.10 ISETT SETA Objectives that support the SAITIS ICT Objective's Framework.

SAITIS stands for South African Information Technology Industry Strategy. The SAITIS project was conceived in 1995 by Mr Jay Naidoo, the then Minister of Posts and Telecommunications. The goal of the project was to " bridge the global development gap and develop a robust, growing and sustainable South African ICT Sector that directly supports, and contributes to, the GEAR challenge of sustainable economic growth, social upliftment and empowerment." 37 Stakeholders were nominated, including the government and the Canadian International Development Agency (CIDA). Entitled "The ICT Sector Development Framework", version 5.0, November 2000. The following Goals and Objectives were identified:

GOALS OBJECTIVESICT Sector Development

Build local ICT Sector capacity that leads the world in supporting sustainable growth, social upliftment and empowerment

Establish the Enabling Policy/Support Environment that makes South Africa and attractive place for ICT development

Build a world-class ICT Sector Support Infrastructure


Stimulate Export Penetration to Capture a Growing Portion of the Global ICT Market

ICT Usage Stimulation Stimulate ICT Adoption through Partnerships Make a Modern Information Infrastructure

available to all South Africans Stimulate ICT adoption through government as a

model user Bring disadvantaged communities into the

mainstream of ICT development and useHuman Resource Development

Comprehensive understanding of the SA ICT Labour market

Establish environment to retain skilled workers Establish HR Development infrastructure to

support ICT development Make HR development integral to ICT

development in SAICT Innovation Establish ICT Innovation, Entrepreneurs and

Risk Management Culture Stimulate ICT R&D for Local and Global

Markets Increase ICT Technology Transfer for R&D to

commercialisation Ensure Intellectual Property protection

For each of these objectives a number of Strategies and Action proposals were developed. It is immediately apparent that the SAITIS project, by and large, addresses issues well beyond the scope and responsibility of the ISETT SETA. There are, however, several areas where there is significant overlap. Obviously these areas have to do with the central issue of Skills Development. In the table above the SAITIS Project Objectives relevant to Skills Development are highlighted in bold italic print. These objectives are analysed below with reference to similar objectives and action proposals in the ISETT SETA Sector Skills Plan.

1. Bring disadvantaged communities into the mainstream of ICT development and use.

The ISETT SETA has made two proposals to help bring technology to disadvantaged communities. One, Technology centres are envisaged that will not only allow the general public in large cities to come into contact with technology but could become incubators for future technicians, programmers and software developers. See chapter 9.6.4 of the ISETT SETA Sector Skills Plan. Two, it is envisaged that an additional carriage could be connected to the Health Train and be filled with IT and Telecommunications devices so that people in rural areas can come into contact with modern technology. See chapter 9.6.7 of the SSP.


Refer to the SAITIS project working draft, Objective 2.4 for details on the following strategies and specific action items:

2.4.1: Information and Learning for all South Africans2.4.2: Improve opportunities for Disadvantaged Individuals2.4.3: Improve opportunities for Disadvantaged Areas

2. Comprehensive understanding of the SA ICT labour Market.

Various studies have been done to better understand the Needs and Supply of skilled workers in the ICT sector. We refer to the work done by and for the ISETT SETA, the SAITIS Baseline Studies, the BMI-Techknowledge studies into remuneration and the studies done by the HSRC into the need for graduate Electronic Engineers. More work needs to be done and the SSP committee of the ISETT SETA has made one of its priority items for 2001 the need to conduct a skills audit in the sector. See chapter 10.5 of the SSP. The proposed Grant "D" requirements can be found in chapter 8.3 of the SSP and the proposed Grant "D" questionnaire can be found in Appendix B of the SSP. The SETA will also conduct workshops with stakeholders to get additional input, especially in view of the rapid change taking place in the sector.

Refer to the SAITIS project Working draft, Objective 3.1 for the following strategies and specific action items:

3.1.1: Strengthen the Capacity to Understand Labour Markets3.1.2: Make better use of Labour Market information3.1.3: Improve the ability to compete for highly skilled workers from abroad

3. Establish environment to retain skilled workers.

The "Brain Drain" is one of the major world-wide trends in the sector and reference to this phenomenon is made in several places in the SSP of the ISETT SETA. This problem cuts across all sectors as ICT has become an everyday tool and requirement of all types of enterprise. The SSP committee has identified some action proposals that could contribute to a slowing down of the Brain Drain. See chapter 9.6.8 of the SSP. Also see chapter 9.6.11 for support of Small Medium and Micro Enterprises.

Refer to the SAITIS project Working Draft, Objective 3.2 for the following strategies and specific action items:

3.2.1: Increase the capacity of South Africa's Universities and Technikons to do high quality basic and applied research3.2.2: Improve the return on investment of science and technology3.2.3: Stimulate growth among small knowledge-intensive firms

4. Establish HR Development Infrastructure to support ICT Development


The SSP committee identified the need for the ISETT SETA to bring its influence to bear on various government departments to provide the funding, infrastructure and human resources to overhaul the education system to address the needs of the sector in the future. See chapter 9.6.3. For general "up-skilling" within companies refer to chapter 9.6.5.

Refer to the SAITIS project Working Draft, Objective 3.3 for details on the following strategies and specific action items:

3.3.1: Develop the skills for a Knowledge-based Economy3.3.2: Improve the capacity of Tertiary Institutions3.3.3: Upgrade the skills of the existing workforce3.3.4: Upgrade the skills of retrenched workers to enable them to participate in the knowledge economy

5. Establish an ICT Innovation, Entrepreneurship and Risk Management Culture.

The ISETT SETA has determined that ICT in South Africa should not merely replicate what others have produced or set up manufacturing facilities that cannot compete on a global scale; South Africa should look towards innovation as a route towards economic growth. In this regard some notable successes in the area of weapons guidance systems and internet security have been achieved. Some South African software developers have become known in the developed world for their fresh, innovative approach. The raw, human potential is there and needs to develop. In the Sector Skills Plan the following sections deal with action proposals in the development of this human capital that could lead to Innovation and Entrepreneurship. Chapter 9.6.4 - Skills Incubators Chapter 9.6.7 - Taking Technology to rural areas Chapter 9.6.10 - Profiling the "Star" employee. Chapter 9.6.11 - SMME support and development. Support of the "Innovation Hub"

proposal, a joint project between the Gauteng government, the CSIR and Pretoria University.

Refer to the SAITIS project Working Draft, objective 4.1 for details on the following strategies and specific action items:

4.1.1: Create ICT Innovation awareness.4.1.2: Create ICT Innovation Listening Posts4.1.3: Forge Linkages with other Innovation initiatives.

This section is meant to be used as a reference guide to link those objectives in the SAITIS project and the ISETT SETA Sector Skills Plan that cover the same ground. As such it is a first step towards fulfilling one of the priorities in the Sector Skills Plan


namely, "To help co-ordinate the activities of the various study projects and training programmes to the benefit of the sector and its workers." (See chapter 10.5.2 of the SSP).

Moreover, the ISETT SETA will support and actively work with all stakeholders to help initiate, promote and sustain the eight priority initiatives of SAITIS and in particular those that involve skills development. Some of these initiatives are mentioned above and are commensurate with ISETT SETA skills development plans previously identified. The nine priority initiatives are

Establish ICT Sector Partnership Cluster Development Impact Analysis of Current Initiatives Develop ICT Sector Portal Youth Internship Program Black ICT SMME Skills Development Establish ICT Innovation Awards Labour Market Statistics Re-skilling retrenched workers

7.11 SAITIS project contact information

Postal Address Private Bag X84Pretoria 0001C/o DTI

Tel: (012) 322-4600(012) 310-1486

Website: http://www.saitis.co.za

Project Director: Neville Nicholase-mail: [email protected]: 082-825-3830

7.12 Conclusion; Sector development

Overall the sector should grow at or above GDP growth. Much will depend on how well South Africa will embrace new technology and the ability of the education system to supply qualified new entrants into the sector. The growth will be in the high level occupations. Electronics and Telecommunications manufacturing is in decline in South Africa, especially in the large companies. The shift is to new, small, sophisticated


http://www.saitis.co.za/

equipment driven by software. South Africa currently cannot compete in the manufacture of these devices. The opportunities for growth are in the telecommunications arena, especially wireless applications, software, project management, integration of supply chain and CRM (B2B E-commerce), outsourcing (SMME opportunities) and intelligent websites.

8 CHAPTER EIGHT: Employment and Skills Needs

8.1 Employment Needs

No definitive study exists which can provide even approximate data on the employment needs of the sector. The SAITIS baseline study concentrates on PROFESSIONALS who perform ICT tasks in ALL sectors of the economy, i.e. it looks at ICT employees above


the level of hardware technician and is concerned with more than just those companies which are marketing and supporting ITC products and services. The HSRC, by its own admission, does not have any relevant data that can be used to arrive at possible employment opportunities in the sector covered by the ISETT SETA.

In order to establish some vacancy data the SETA conducted a survey to get an idea of employment opportunities in the sector. The table below shows the results of 68 respondents.

A. B. As reported

C. D. =C x 143000

E. As reported F. =E/Bx100

G. = D x F

Job Category No. of Employees

% of total

Extrapo- lated to sector

Vacancies expected in 2001

% growth

No. of possible job opportunities

Top Management (policy making) 228 5.05 7222 33 14 1011

Senior Management (policy implement) 255 5.65 8080 31 12 969

Professionals, Specialists, middle management 650 14.40 20592 98 15 3089Skilled Technicians, supervisors

1625 36.00 51480 223 14 7207Sales & Marketing

693 15.36 21964 160 23 5052Admin & Accounts

898 19.90 28457 72 8 2277Artisans 23 0.51 729 15 65 474Catering staff 22 0.49 701 0 0 0Cleaning staff 119 2.64 3775 0 0 0Totals: 4513 142000 632 20079

NOTE:It needs to be stressed that the above data does not necessarily represent the true picture. The base sample is small, is biased towards IT and it does not follow that it can be extrapolated to the whole sector. There is, however, some correlation between this small study and one in the SAITIS Baseline study of 1999. That study of 4077 IT professionals shows a growth of 56% for 9 IT Domains for a three year period (1999 to 3002). This growth equates to an annual growth of about 15.9% (assuming the growth is linear). The small ISETT SETA study, above, shows a growth of 14.1%. Allowing for the fact that the SETA study looked at all occupation categories, 14.1% seems a likely overall growth rate for 2000 to 2001. The 9 domains in the SAITIS study and the growth rate for each over the three year period are listed below:

Domain % growth (3years)Computer Operations 0.75


Data Communications and networking 75.55End user computing 23.82Hardware and computer Architecture 42.62Information Systems and Technology Management 80.37Information Technolgy Sales and Marketing 63.64Other 4.88Systems Development 90.50Total growth 1999 to 2003 55.56(Source: SAITIS Baseline study 1999)

These figures show that the need for IT workers is in the Highly Skilled Professional Domains.

8.1.1 Telecommunications forecast for Professional employment

The Department of Communications forecast the following employment growth from 1998 to 2003.

Current and forecast Professional employment: 1998-2003OCCUPATION 1998 2003 %

growthENGINEERING/AND RELATEDElectrical/Electronic Engineer 1173 1763 50Electronic/Electrical engineering technologist 213 403 89Telecommunications technologist 178 335 88Electrical/Electronic engineering technician 1123 1446 29Telecommunications technicians 16366 17141 5Other engineers 55 59 6Other engineering technician/technologist 140 158 13IT TECHNOLOGY and RELATEDComputer programmers 246 394 60Computer systems analyst and related 300 624 108Information communications technologist 35 105 197Multimedia developer/technologist 51 89 73Network designer 98 182 86Website developer 56 105 88Hardware support 189 283 50Software support 228 342 50Other computer science occupations 263 417 58

OTHER PROFESSIONAL OCCUPATIONSAccountant (CA) 80 108 36Accountant( non-CA) 406 490 21Other economic occupations 109 155 43HR occupations 506 655 29Legal 32 46 42Remaining Professionals (e g safety advisors, librarians ) 431 369 -14

TOTAL PROFESSIONALS 22280 25665 15

(Source: Dept. of Communications)


This table highlights the need for graduate engineers and for IT professionals in Telecommunications. An average of 411 additional Engineering and Associated Professionals will be required each year over this period. On, average 219 additional IT professionals will be required while 52 additional professional workers in the economic and HR occupations will be added each year, on average.

8.1.2 Economic realities and employment in the sector

A special IT overview in the Financial Mail of 17 November 2000 lists winners and losers (listed companies) over the past year. The winners consist of 9 companies that showed gains between 19 and 437%. Some of these winners have the major part of their operations offshore which will not benefit South African workers. The losers consist of 12 companies that showed declines between 50 and 94%. This means that job opportunities are few and probably at high skills and experience levels. The privatisation and consolidation of parastatals like Telkom, Sentech, Kentron and Transtel could lead to the loss of thousands of jobs. The debacle around the appointment of a third Cellular Telephone provider has withheld job opportunities. The continued decline of technology stocks (NASDAQ) is a major concern, also in South Africa.

More research has to be conducted to establish a true picture of the nature and size of job opportunities in the sector.

See chapter 5.2 "Economic Issues" specifically economic growth and e-commerce.

8.2 Skills Needs

To establish skills needs, the ISETT SETA used a number of sources, i.e. it conducted its own study, mainly of IT companies. It commissioned FSA-Contact to conduct a study into the skills needs in the Telecommunications and Electronics sectors. The full reports of these two studies are available on the ISETT SETA website: http://www.isett.org.za . The SAITIS Baseline study confirmed the results of these two studies. In addition, some interviews were held with representatives of trade unions. The views of the unions are recorded below, followed by a summary of the findings of the above studies:

8.2.1 Union input

The question asked of the labour unions was, "What should the ISETT SETA do to enhance training in the sector, especially if one considers the rapid changes taking place in technology?" The responses were as follows:

"Become pro-active and identify key skills such as those required in electronics, telecommunications and IT. Also include trade skills where learnerships can be used" (SALSTAFF)



"Software skills, C++, Delphi, MCSE, Simulation Software, Quality control on software, Configuration and Quality control. Training in Management and Marketing and Export and Import skills. General mechanical and electronic refresher courses. Need for Instrument makers and fine soldering". (Kentron Workers Union)."Make training more accessible-entry level difficult. Bridging programmes required and more information on career opportunities" (NUMSA)"It is important that learnerships should contain the correct training; therefore there should be centralised control over the training. The training of electricians and electrical technicians is being set up to comply with international certification. It is important that qualifications meet high standards of knowledge and safety" (Electrical Workers Union)"Training in both light and heavy current for broadcasting purposes" (BEMAWU)

A further question put to the unions was, "What is the most important thing that needs to be done at school level to prepare potential job seekers in the sector?" The responses were as follows:

"Early identification of potential at schools. IT literacy as a subject. Increasing in specialising for careers" (SALSTAFF)"Need real vocational guidance. Philosophy as a subject (logic). Address the gap between white and black schools. Kentron has bridging school" (Kentron Workers) Union""Early training in IT. Earlier and better Maths training" (NUMSA)"Vocational training early in high school" (Electrical Workers Union)"Companies in sector to visit schools and tell learners about the sector and job opportunities and requirements" (BEMAWU)

8.2.2 SAITIS Baseline study findings

The SAITIS Baseline study found the following regarding skills needs:

Of the sample of 500 240 employees 9 538 were IT employees, 1.9% of total staff reported. The HSRC estimates the total number of computer related positions in South Africa to be 28 671 although this appears to be an underestimation. However, using this estimate, the SAITIS sample of IT professionals represents 33% of these positions. Companies in computer systems design /related services have the highest proportion of IT staff to total staff (62%). Of IT user organisations, companies involved in the management of companies and enterprises have the highest proportions of IT staff to total staff (11.8%) followed by finance/insurance (4.8%) and professional, scientific, technical services (3.8%).Real estate, rental/leasing companies had the highest concentration, (50%) of contract IT staff, compared with permanent IT staff. Public administration 47%, construction 42%, information/data processing 38%, education 37%, retail trade 31% also have a high proportion of contract IT staff to permanent.


8.2.3 IT skills domainsThe split of IT staff by IT domain shows the highest proportion of IT staff are employed in systems development. 14% of IT staff are employed in each of the following skills categories: Information Systems Management Computer Operations End-user computing

8.2.4 IT skills domains by race and genderAcross all IT domains, over 60% of employees are white. Black employees are most underrepresented in IT training and education, IT and systems management and systems development. Female IT employees are best represented in IT education and training (39%), end-user computer (36%), and IT sales/marketing (36%). Overall, black employees make up 30% of IT employees in the skills profile mix. This seems to be a higher representation than what has been reported elsewhere but may be due to the specific targeting of black owned IT companies in this study; and to the bias towards smaller companies in the sample.

8.2.5 IT skills by revenue sizeLooking at the skills profile of organisations by revenue size, the distribution of skills by IT domain was fairly uniform across organisations of different revenue sizes. The highest concentration of IT skills is in systems development, information systems technology and management, data communications and networking/computer operations.The race and gender distribution of IT staff across organisation by revenue size shows that there is greater representation by race and gender in small organisations. Black employees make up between 35% and 24% of IT employees, on average, across organisations of different revenue categories.

8.2.6 Future skills needsRespondents were asked to estimate the number of IT employees in 2003. Overall a 56% increase was expected in the number of IT staff. The HSRC study on future skills needs predicts a plus 40% increase in the number of IT employees between 1998 and 2003. The highest increase amongst SAITIS respondents is expected in systems development (90%), followed by IT education and training (76%), and information systems/technology management (79%).Lowest or moderate increase is expected in computer operations (0.75%), and end-user computing (23%).


8.2.7 Findings of various surveys and other industry input

8.2.7.1 Skills required in the IT industry (SAITIS baseline study input)

In general, there is little information available concerning future skills requirements. Most available data focus on immediate jobs/skills demands rather than on future demand. This is probably indicative of the need to keep a short term focus in the face of increasing skills shortages and the lack of availability of current skills (and the significant brain drain). It should be noted however, that the lack of a national strategic vision to date, which can streamline skills development may also contribute to this short-term focus. The 1998 HSRC Telecommunications Study is the only IT related comprehensive study to be carried out on skills supply/demand. Nevertheless, The CPL Survey reveals staff shortages in the following areas:

Mainframe Environment: CICS, COBOL, COBOL, D2, NATURAL ADABAS Mid-range PC's: Relational Data Base Management (Oracle, Sybase, etc) Small PC's: Visual Basic, Delphi, C++ Networking: Novell, Windows NT Other: SAP, BAAN

NOTE: The above is a summary. For more details, refer to APPENDIX B

8.2.7.2 Information Technology- Employment Agencies Report

8.2.7.3 ISETT SETA study

The ISETT SETA study was different from the SAITIS baseline study and the FSA Contact study in that it concentrated on those ICT workers who are working within the sector, i.e. it did not look at the broader community of ICT workers in other sectors. It also looked at ALL employees in the sector, from Senior Management down to Service workers (cleaners, etc). This study is available on the ISETT SETA website: http://www.isett.org.za For the purpose of the Sector Skills Plan, only those occupations which were rated as being important (High need) and which were rated as difficult to fill (low availability or in under-supply) are listed here.

NOTE: A number of Telecommunications and Electronic companies were included in this survey. In this section only a summary is given of generic jobs that are in high demand with low availability. For more details, refer to Appendix B (Section 12.2, pages 112-118), or the full report on the ISETT SETA Web-site.

Senior Management (all functions), Sales & Marketing personnel, Software Development and support (especially C++ and Java Programmers), Customer Service and support (mainly electronics and telecommunications technicians/engineers), Logistics



Administration and some HR professionals (knowledge of IR/Gender issues and Employment Equity).

8.2.7.4 Information Technology- Employment Agencies Report

The FSA-Contact survey of Employment Agencies tried to establish which positions in IT were difficult to fill. Here are the results in summary form. Fuller details can be found in Appendix B (Section 12.2, page 112-118) or on the ISETT SETA Website.

Website development/support (HTML, Java) Data-Warehousing, E-Commerce (as for web development plus business knowledge) Internet development (Java, ASP, Visual Basic, C++, etc), Project Managers (extensive experience needed), Systems Architect, Java Programming.

8.2.7.5 Electronics & Telecommunications- Companies' report

The FSA Contact report based on input by companies in the sector indicated that the following occupations were in high demand whilst the labour market supply was low or medium.:

Systems Engineer, Software Engineer, Technology Strategist, Telecommunication Technician, Radio Frequency Planner, Project Manager, Electronics Engineer, Account Engineer, Product Manager, Tenders Manager

NOTE: This is a summary. For more details, especially qualification required, refer to Appendix B

8.2.7.6 Telecommunications and Electronics- Employment Agencies Report

Employment Agencies surveyed reported that they had difficulty with filling most of the positions mentioned above and added the following:

Technical Author, Support Engineer, Solutions Architect, Switching Engineer, Specialist: Intelligence, Radio Engineer, Radio Installation Officer, Optimisation Analyst, Optimisation/Planning Engineer, High level support Technician, Configuration Engineer, Radio Maintenance Engineer, Transmission Engineer, Technical Assistants: Radio Maintenance, Network Support Engineer, Network Planner, Technical specialist: GSM,In-building Planning engineers: Radio frequency, Performance Management Engineer, Internet Protocol Voice and Data Engineer, Technical Sales persons.

NOTE: This is a summary. For more details, especially qualifications required, refer to Appendix B


8.2.7.7 Telecommunications; Demand for high-level occupations.

The demand for technical personnel is expected to increase by 15% 1998-2003. However, within this broad category there are some particularly high growth rates anticipated:Electrical/electronic engineers ( 50% )Electrical/electronic technologists ( 89% )Telecommunications technologists ( 88% )

The first of these requires a four-year degree; the latter two a four-year diploma. Significantly lower growth in demand for electrical/electronic engineering technicians is expected (29% );telecommunications (5% ) -both require a three year diploma. This tendency could possibly be linked to the implementation of newer, more sophisticated technologies which require higher levels of technical expertise.(Source: Dept of Communications)

8.2.7.8 Skills shortages in the industry

Of the 35 participating organisations in the HSRC investigation into the demand for and supply of high level human resources for the telecommunications industry, 33 reported skill shortages with regard to engineering: 54% of the total experienced problems in the recruitment of professional engineers skilled in telecommunications, especially electronic engineers.

A further 46% ( of the total ) reported severe difficulties in recruiting high level IT professionals, specifically information communications technologists, systems analysts, integrated systems engineers and network designers. Furthermore, 29% of respondents indicated a shortage of engineering technicians-telecommunication, electronic and electrical. Of particular concern is the need for the integration of engineering and IT skills, given the convergence of technologies. Currently, this is not provided for.Another supply constraint identified in the survey is the need for HLHR trained in the newest technologies such as satellite technology. (Source: Dept of Communications)

8.2.8 Electronics and Telecommunication, additional input

A number of serious high-level skill shortages exist in the Electronics and Telecommunication sub-sectors, resulting in growth constraints and certain technical developments to be moved off-shore. Some specific strategies need to be developed to overcome these shortages. The following factors combine to create this shortage:

Rapid growth and technological change in the sector, causing multinational companies to hire only qualified electronics engineers and creating world-wide demand for such skills.

The brain drain which is estimated by the Electronics HR Forum (21 companies) to be as high as 33% of BSc (electronics) graduates. The loss of S4 to S6 Technikon diplomates is estimated to be 10%.


It is estimated that to cater for current needs, growth and losses due to the brain drain, South African universities should produce 2000 BSc (electronics) engineers each year. Currently only 600 graduate per annum. Another major concern is that most of these graduates are white males. An HSRC report on 1998 Electronics Engineering graduates reveals that 80% of the graduates were white males.

Electronics and Telecommunications companies report severe shortages of Technikon diplomates at levels S4 to S6. No hard data on this skill level is available. At Technikon levels N4 to N6 there is no significant problem at this stage, but this level of expertise will not contribute to dealing with the skills shortages at the top levels in the sector.

8.2.8.1 Electronic Sector, Specific niche needs

Kentron has articulated some of the skills needs in the Electronic sector. First, the distribution by NQF level looks like this:

NQF Level Skills need 8 1% 7 30% 6 20% 5 50%

Specific skills needed are as follows:

Digital Signal processing Digital Hardware Algorithms Embedded Software

Systems Modelling (mathematical & computer modelling) Communications Systems

Radio Frequency (RF) Optical (Laser)

Sensors Electro-optical, TV, Infrared, Laser Radar

Analogue Electronics Automated assembly acceptance Testing and Inspection

Alcatel say their needs by NQF level are as follows:

NQF Level Skills Need 8 1% 7 30%


6 50% 5 30%

8.2.9 Skills oversupply

Although no research data is available, anecdotal evidence abounds that training in two IT skills, MCSE and A+, have been conducted and are still being conducted in excess to industry requirements. The result is that many people who have undergone this training are looking for work in vain. Companies complain that these courses have no practical component and that people with a certificate are unable to do the most basic functions. This situation is viewed by many as a result of a shortage of these skills about two years ago, combined with the promise of very high earnings. Unfortunately some training providers still punt these qualifications, resulting in high cost and no jobs for the students.

8.3 Grant "D" in the ISETT SETA

Due to the diversity that exists and rapid change taking place in the sector, there are a large number of skills training initiatives that could be considered for grant "D".

Section 8.2 of this SSP contains details of skills that are in short supply based on various research projects. In addition, the ISETT SETA sent out a questionnaire (see Appendix D) to companies in the sector to supplement information in this regard. Together with input from Workplace Skills Plans, this information augments and confirms what is already known. To supply a list in the SSP of all the skills training taking place, would be near impossible. What is more useful is to list those occupations that are seen as critical in each sub-sector:

8.3.1 ELECTRONICS

Project EngineersElectrical EngineersIndustry ManagersField Support EngineersSales EngineersProduct EngineersSoftware EngineersRadar Systems EngineersProgrammers (various, but especially Java, C++)Optical EngineersOptical ManufacturersFinancial experts (graduates)Sales & Marketing personnel


8.3.2 TELECOMMUNICATIONS

Software Developers (Oracle)VAS EngineersGSM SpecialistsCNSN EngineersRadio Planning and Optimisation EngineersPPAS EngineersIVR EngineersInterconnecting Banking EngineersElectronic Engineers & Technologists (BSc, S6, S4, S3)Electronic Technicians (N6)Technical SalesLogistics Engineers

8.3.3 INFORMATION TECHNOLOGY

Project ManagersSales Consultants (technical know-how)Sales RepresentativesFinancial Managers (graduates)Network EngineersSenior Sales & Marketing ManagersSenior Software DevelopersProgrammers (varied, but Java and C++ critical shortage)Electronic EngineersHelp Desk Personnel (technical know-how)Product Trainers

The ISETT SETA will pay Grant D to employers mainly (say 75%) for training interventions that address acute skills shortages in the sector. Some recognition is, however, also due to those companies that make special efforts that result in Skills Development Projects in critical areas. The remainder (say 25%) could, therefore, we paid for skills development initiatives such as bridging programmes or bursaries.

The ISETT SETA will have to apply a considerable amount of good judgement in awarding Grant D payments. For this purpose it appoint a committee, consisting of senior staff members, to evaluate training reports and award grant D. The Executive committee of the SETA is currently working on the operational details of Grant D.

8.4 Conclusion


The analysis in this chapter, supported by the SAITIS baseline study 1999, indicate that the sector will have some 20 000 vacancies this year. Many more ITC professionals will be needed in other sectors. Various research projects all point towards the growing need for highly skilled Engineers, Software Developers, Managers, Sales people and Technicians. Grant D will try and address some of these issues.

8.4.1 The role of the ISETT SETA

The SETA will have to design and implement ongoing research projects to first get a more accurate and detailed picture of the sector needs (quantitatively and qualitatively). Some key activities stand out:

The SETA must put in place a RPL project. The SETA must be both enabler and doer. It needs to consult with and influence top

management in the sector on Skills Development. It must also via authoritative research data and expert knowledge be able to guide training providers.

The SETA employ best practice in establishing the needs of the sector and must co-ordinate various skills development initiatives.


9 CHAPTER NINE: Implications for Skills policy and Skills provision

The analysis part of this Sector Skills Plan consists of a profile of the sector (chapter 4), a chapter dealing with factors influencing future change (chapter 5), a chapter dealing with education and training supply (chapter 6) and a chapter dealing with sector development strategy (chapter 7).

Following on the above are two chapters where the SSP reaches its conclusions. First is chapter 8 which deals with employment and skills needs. The other is this one, chapter 9. Note: The conclusions reached in chapter 8 are repeated in 9.5 below.

Chapter 10 proposes the Strategy for the Sector and the SETA based on the analysis and subsequent conclusions.

The Implications for Skills Policy and Skills Development are as follows for each factor considered in the analysis.

9.1 Sector Profile

With annual revenues of R70 billion, 4700 enterprises and nearly 143 000 employees, the sector is already significant. What makes it stand out is that all other sectors use and benefit from its products and services and the fact that it is at the forefront of the enormous changes that are happening on the technology front. Skills of the highest level are required by the sector and those enterprises in other sectors that also employ ITC professionals. The world-wide shortage of skilled workers in this field has exacerbated the situation as many skilled ITC South Africans have emigrated. To complicate matters, the sector is dominated by white males. Skills policy and skills development will be an ongoing process, mainly due to the large scale changes occurring at an accelerating rate.

9.2 Factors Influencing change

9.2.1 Policy

Employment Equity will present a huge challenge to the sector. Part of the answer lies in the Skills Development Act. Another part has to do with the massive upgrading of education to prepare black learners for a future in the sector. Telecommunications policy can have a major effect on the sector, especially aspects like deregulation, privatisation, additional cellular telephone licenses, the SAITIS project and the E-Commerce Green Paper. Much of this is under discussion and even in the courts. Decisions need to be made that will enable the sector to derive major benefits. It is likely that many new jobs will be created, increasing the demands on skills requirements.


9.2.2 The Economy

The economy has many positive aspects such as good fiscal discipline, improved GDP, inflation under control and opportunities in E-commerce and for SMME's. A shadow is being cast by the slowdown in the economy of the United States. Of particular concern is the poor performance of the technology stocks on the NASDAQ which has also affected some of the major sector companies in recent weeks. Overall, the picture does not look too gloomy and some growth in the sector can be expected. If there is a local slowdown, that will be an opportunity to consolidate and do some training. If not, the industry will be demand driven. Both scenarios are positive for training initiatives.

9.2.3 Social factors

The social factors identified were Unemployment, Poverty, lack of Rural Development, Race and Gender issues and HIV/AIDS. These social factors present some of the more difficult and, seemingly, insoluble problems for the country. The ISETT SETA has to align itself to objective 4 of the NSDS and make provision for social initiatives, focussing on re-skilling and taking skills development to rural areas.

9.2.4 Technological change

The rapid and relentless technological change affects this SETA most directly. Solutions need to be found for the problems surrounding education and the brain drain (see this chapter for some proposed initiatives). Technology has also changed drastically the competencies and values of workers in the sector. Work needs to be done to train current and future worker (and management in particular) for the new economy and the worker that needs a car, a cell phone and a lap top computer and can work anywhere (also in the car).

9.2.5 Environmental factors

Although the environment is highly important and global warming could have serious effects on the people of the world, only one issue is of some concern for the sector. This is the unresolved question of whether cell phones create radiation that cause cancer. As it is unverified at this stage there are no immediate implications for the sector.

9.2.6 Legislation

The Green Paper on E-Commerce has major implications for the sector. It is important that the legislation provides a good regulatory environment that will lead to easy and


effective implementation of E-Commerce for business and individuals. Extensive preparations and training of entrepreneurs and workers will be required to ensure that failures are avoided or minimised. Friendly infrastructure and user training in the rural areas are essential elements to ensure the technology is available to all South Africans.

9.3 Current Education and Training Supply

The analysis concluded that the education supply is inadequate. Poor matric results, especially as far as Mathematics and Science are concerned prevent further study in the disciplines required by the sector; Electronic Engineering, Software Development, Internet programming skills, etc. This is complicated further by the brain drain and rapid technological change. This is the most crucial issue which will affect the SETA in its work. Workplace Skills Plans, Learnerships, Grant D and a variety of special projects and the co-ordinating of existing programmes are tools that can make a difference. The SETA will have to interface with stakeholders in this regard. Government departments that are key in this area are the Dept. of Education, Dept. of Trade & Industry, the Dept. of Arts, Culture, Science & Technology and, of course, the Department of Labour.

9.4 Sector Development Strategy

The SAITIS project identified four goals, each with a number of objectives. Several of these objectives are similar to those of the ISETT SETA. Full details are in chapter 7 of this SSP. The goals and objectives which overlap with those of the SETA are

GOALS OBJECTIVESICT Sector Development NoneICT Usage Stimulation Bring disadvantaged communities into the mainstream of ICT

development and useHuman Resource Development Comprehensive understanding of the SA ICT labour market

Establish environment to retain skilled workers Establish HR development infrastructure to support ICT

developmentICT Innovation Establish ICT Innovation, Entrepreneurs and Risk management culture

(SMME emphasis)

The implications are clear. ICT development must be taken to the rural areas, extensive research into the sector is needed, the brain drain needs to be tackled head-on, better handling of human resources is needed and SMME opportunities should be made into realities. All of these issues require the SETA to work with all stakeholders to ensure that essentials skills are developed and do not leave the country.


9.5 Employment and Skills needs

The analysis in this chapter, supported by the SAITIS baseline study 1999, indicate that the sector will have some 20 000 vacancies this year. Many more ITC professionals will be needed in other sectors. Various research projects all point towards the growing need for highly skilled Engineers, Software Developers, Managers, Sales people and Technicians. Grant D will try and address some of these issues.

9.5.1 The role of the ISETT SETA

The SETA will have to design and implement ongoing research projects to first get a more accurate and detailed picture of the sector needs (quantitatively and qualitatively). Some key activities stand out:

The SETA must put in place a RPL project. The SETA must be both enabler and doer. It needs to consult with and influence top

management in the sector on Skills Development. It must also via authoritative research data and expert knowledge be able to guide training providers.

The SETA employ best practice in establishing the needs of the sector and must co-ordinate various skills development initiatives.

9.6 ISETT SETA Action Plans and Special Projects

The Sector Skills Planning Committee of the ISETT SETA propose the following action plans and special projects to address some of the needs of the sector.

9.6.1 Equity

The thrust of the Employment Equity Act and the Skills Development Act is clear. Employment Equity will need a lot of good will and hard work. The ISETT SETA's role will be to work with sector employers through their Skills Development Facilitators and using the Workplace Skills Plans, Learnerships and the awarding of Grants to change the current situation of inequity in the workplace to one that progressively shows more equity.

9.6.2 Learnerships

There are a number of Key occupational Categories that require Learnerships:

Management (the development of black first line and middle managers is crucial)


Software Developers and Support professionals and technicians (internet applications are key)

Project Managers (Learnerships will be merely and introduction as experience is essential)

Professional Sales Persons (a big opportunity for blacks) Entry Level Programmers and Support Personnel Entry Level Hardware Technicians

This will be the responsibility of the Learnership Committee and the management and staff of the ISETT SETA dedicated to Learnership development.

9.6.3 Influence government departments

In order to address both short and long-term needs, the ISETT SETA will bring its influence to bear on the government (Education, Labour, Finance, DACST, Trade and Industry, etc) to provide a better nursery for future employees. This action must be seen against the following major factors:

The Brain Drain. The poor matric results. The low number of graduate electronic engineers. The relentless onward march of technology.

The ISETT SETA will exert its influence on the Department of Education to

Place far greater emphasis on the development of IT skills at primary school level. Rejuvenate the RAMS programme, especially as far as IT is concerned. Implement vocational education. Teach entrepreneurship at schools. Teach labour skills at schools. Teach life skills at schools, such as linguistic skills, logic skills, communication and

negotiation skills and money-management skills. Develop and provide some kind of internship program for engineers and computer

technologists to gain practical experience.

The ISETT SETA will also influence the government and SAQA to reduce the complexity of the SAQA act and to make the act less restrictive as many major companies in the SETA spend huge sums of money on training that falls outside the ambit of the act and the NQF levels.

Another sphere of influence is to establish links with educators (teachers). Some new and creative ways must be found to convince educators that open days at companies and exhibits are vital in the process of giving vocational guidance. One way will be to use SchoolNet. Another is to work through the teacher unions.


9.6.4 Skills Incubators

The ISETT SETA is to facilitate the development and implementation of Skills Incubators where school children can come into contact with technology on a very practical level. The incubators will take the form of technology centres. These centres should have a good regional spread throughout South Africa. These centres will be open to all school children and will contain computers, software products, telecommunications equipment and loose electronic components. The idea is to see, touch and absorb the facilities to learn to solder, connect components, use the equipment to communicate and produce documents and to learn basic programming. The purpose is to identify talent and potential and develop "Technology Smart Kids". These centres should allow youngsters to explore and, at least initially, be relatively unorganised. But these centres should be open to all citizens, including the unemployed, housewives and the disabled. For this reason these centres must be open during extended hours. Staffing can be done by using both retirees and by involving small businesses, possibly as a franchise opportunity.Funding can come from the levy surplus, company sponsorships (not only ISETT) and the NSF. Links should be set up in this regard with other projects such as SchoolNet, Telnet and the Youth Development Trust.

It is envisaged that these incubators could prepare the way for the possible emulation of the Indian experience. At the very least these incubators could be precursors of Learnerships and jobs.

9.6.5 General Re-Skilling within companies

Most of the enterprises within the ISETT SETA have few people at the lowest NQF levels (3 and below) a large number of people at NQF levels 4 to 6 and relatively few people at above level 6. Companies will be influenced by the ISETT SETA to go on a general up-skilling drive. The idea is to enable employees at each level to develop skills necessary for the next level up the ladder. This means that, provided proper training takes place, the following movements up the jobs ladder could become feasible:

Current Job moving to: Next level JobCleaner Switchboard OperatorSwitchboard Operator Call Centre OperatorCall Centre Operator Sales PersonPicker or Packer ArtisanArtisan TechnicianTechnician Sales PersonTechnician ProgrammerProgrammer Developer

Note: Some of these changes will not necessarily mean promotion and could represent a lateral move, however it does mean the individual is growing and it also builds respect for the organisation as it is seen to take an interest into the development of its employees.


The SETA will drive this aspect of skills development and could ensure this takes place by making it an element of the Workplace Skills Plan. In addition, the SETA could provide assistance and advice in this regard, using information gleaned from those companies that are doing this already.

There are a number of advantages to this kind of action:

The company and the employee already know each other; no orientation is necessary. The re-skilling or up-skilling will probably be a relatively short exercise. Vacancies will be created enabling school leavers or the unemployed to find jobs. This action could benefit situations where the Brain Drain is present.

9.6.6 Establish links to other SETA's

The ISETT SETA has a major role to play in the skills development of workers in all sectors of the South African economy. The products and services of all three sub-sectors are to be found in every industry in the country. It is essential that this SETA should take the lead in establishing links to other SETA's in order to

Conduct appropriate research into the skills development needs of and trends in the use of technology by other sectors where the ISETT SETA provides products and services.

Co-ordinate training interventions and thus avoid duplication of effort and bring down costs.

Be seen as being pro-active in its approach to skills development in the economy as a whole and to bring value to the table.

9.6.7 Take technology to rural areas

Rural communities in South Africa are starved of knowledge regarding technology. Many people do not have access to running water and/or electricity. It is essential to bring awareness to these communities of the existence of modern technology on an experiential level (see, touch, hear, etc.). The ISETT SETA must, again, become pro-active and invest in the following proposals:

Follow the example of the Department of Health's "Health Train" and with the assistance of business devise a "Technology Train". A mobile technology exhibit with computers and telecommunications equipment could be a catalyst in encouraging young people to invest in their future by studying hard. To cut costs, an additional carriage can be added to the "Health Train". Note: Similar projects, in the form of a technology bus, already exist in Cape Town and Pretoria. The SETA management has seen the Cape Town vehicle and is considering SETA input/involvement in the project.


Establish links with existing projects such as Tele-centres/MPCC's, the Rosslyn Mpower project, the BITF network and initiative of the Department of Communications. Post offices could also play a role due to their wide distribution around the country.

There is an urgent need for the SETA to do research in this regard and to put together an inventory of projects around the country and establish some kind of common goal and synergy between these projects.

9.6.8 Dealing with the Brain Drain

Establish the size of the problem by means of research as there are no definitive figures available of how many ICT workers are leaving the country. Partners in such research could be the BITF and the National Youth commission.

In keeping with the philosophy of "Life-long learning" companies must employ a strategy of re-skilling older employees instead of putting them on early pension. The re-employment of retirees who want to work again could be another short-term strategy.

Through research try and identify groups that may be less likely to leave the country and target such groups for training and development. Possible groups could include Blacks, Women, Indians and Coloureds.

Establish a Tele-Job Bank Attract skilled immigrants by following the American and UK examples of relaxing

work permit requirements. This strategy could have a major impact on skills development as these immigrants could play an important role as on-the-job mentors.

Develop Learnerships for Software Skills. Influence the government and police to deal more effectively with the crime situation

in the country which is one of the quoted causes of the brain drain. Counter the perception that the Employment Equity Act and Affirmative Action

necessarily mean that whites cannot find jobs or get promotions. Devising short courses to bridge the Skills Gap (see below) Mentor programmes

could form part of short courses.


9.6.9 The Skills Gap

The Sector is in the invidious position that there is an urgent need for skilled workers at NQF levels 5 to 7 and that the large mass of unemployed people do not have the necessary skills to fill these positions. The result is a Skills Gap. This situation can be illustrated as follows:

The traditional way of bridging the gap will continue via influencing education authorities and the accepted training processes on the job in the various companies. This process will bridge the gap in a horizontal manner. It is proposed that through the medium of short courses aimed at very specific needs the gap could be bridged in a vertical manner.


Sector Need

GAP

Supply

NQF5,6,7

4321

Horizontal Bridging Vertical Bridging

An example would be the need for a programmer for a narrow, specific task, for example a clearly defined contract. The training could be done in a relatively short space of time, i.e. weeks or months. The advantages are that the need is fulfilled quickly and the individual can be employed and learn a useful skill which can be used repeatedly. To be effective, individuals with the necessary aptitude must be identified. In addition such persons should be quick learners and be adaptable. With modern software, a very high level of skill is not always necessary, which makes this kind of approach more practical. This kind of approach should not be limited to young people only. Contracting is one way of dealing with short-term projects but could lead to permanent employment over time as relationships develop.

9.6.10 Profiling the "star" employee who "came from nowhere"

There is enough anecdotal evidence in the sector of employees who became "stars" without having the traditional backgrounds for the job in which they excelled. Some of these employees were employed in lower level jobs or had average matric results or had arts degrees but became very successful in technically challenging jobs. The ISETT SETA needs to conduct research to establish a profile of these employees and to try and determine the qualities that made them successful in order to try and nurture such "factor X" qualities even at school level. Such research should be done as follows:

1. With the agreement of employers and the relevant employees, compile a research group of, say, 100 individuals who have succeeded despite educational mismatches with their jobs.

2. Compile a set of questionnaires designed to determine what personal qualities may be common amongst these individuals. There would be a questionnaire for the individual and one each for the individual's employer, peers, teachers, friends, parents, siblings, etc. Questions would range from personal qualities to hobbies, interests and important achievements.

3. Compare the results and determine whether there are obvious qualities that stand out and can be influenced through training and development.

The SETA should finance such a project but use a professional research firm to conduct the research.

9.6.11 SMME Support & Development

9.6.11.1 SMME's by Sub-sector


The following data on SMME's was extrapolated from the SARS levy payment reports.

INFORMATION TECHNOLOGYSize Range(employees)

No. of companies

No. of employees

1 to 50 2738 2605951 to 100 117 9331101 to 150 34 5003Total: 2889 40393

This means that 98% of companies in the IT Sector can be classified as SMME's and that 61% of people working in the sector are employed by SMME's. Many operations consist of only one person.

TELECOMMUNICATIONSSize Range No. of

companiesNo. of employees

1 to 50 865 561151 to 100 63 3487101 to 150 9 889Total: 937 9987

In terms of number of companies SMME's account for 99%. In terms of number of employees SMME's account for 16%. The impact of Telkom is evident. Without Telkom SMME's account for almost 60% of the people in the sub-sector.

ELECTRONICSSize Range No. of

companiesNo. of employees

1 to 50 769 318551 to 100 17 1030101 to 150 6 684Total: 792 4899

SMME's, therefore, account for 98% of enterprises and 32% of employees in the sub-sector.

9.6.11.2 ISETT SETA Research

The ISETT SETA conducted telephone research with the Companies below to establish what kind of support SMME's need. The table below provides some insight under "Key Issues"

Company No. of Employees

Where Located

Core Business Key Issues

A 60 Sandton Sales & support of ERP Systems

Shortage of well-qualified people

B 22 Midrand Mainframe sales and service

Focus shifted to PC's, fewer mainframe skills

C 12 Pmburg Internet service provider Long process to train people to productive level


D 11 JHB Provide business systems solutions & e-commerce

Constant change. Higher level qualifications needed

E 51 Cape Town Linux development and support

Linux not well known, few experienced people

F 40 Pretoria Distribution to retail outlets

Hands-on training. Need company knowledge

G 32 JHB Develop mobile solutions (palm Units)

Finding people with specialised knowledge

H 5(directors)

Sandton SW consultants & systems development

Very specialised skills required

I 83 Cape Town Corporate networks Scarcity of experienced people. High salaries demanded/low skills

J 14 Sandton Interactive corporate solutions

Need people with IT background, sales skills and training skills

L 5 Randburg Networks (WAN) and training

Good people favour large companies

M 15 Pretoria IT training Product specificity N 27 JHB Bar code equipment and

systemsProduct specificity

O 68 Cape Town IT Solutions consultants Company knowledge & hands-on experience

P 5 Pretoria Sales/support of fault tolerant systems

Specialised nature of business

Q 10 Cape Town Software training Multi-skilling of MD and staff R 36 Sandton Storage integrator General skills shortage, brain

drain, unrealistic expectations S 50 Durban Software developer (local

gov, health care)Slow, long process from university, in-house training, productive

T 19 Cape Town Internet programming Product specific problems. Small size

U 10 George Software support Location. Critical mass V 10 East London Sales, HW/SW

installation, maintenanceSpecific training needs (Unisys)

W 9 Lyden-Burg

Computer Sales & Maint. Stationery

Low sales due to location

X 50 Sandton Specialised banking product (currency trading)

Finding/keeping right sales and software support people

9.6.11.3 Needs Analysis and Action Plans for SMME's

A meeting of the SSP functional committee was held on 11 October, together with members of the ISETT SETA management team to focus specifically on SMME's within the ISETT sector. The meeting first conducted a SMME Needs Analysis and then discussed ways and means for the ISETT SETA to provide tangible and developmental assistance to start-up and existing SMME's in the sector. Below are the findings and action proposals flowing from that meeting.

The needs of SMME's within the sector fall under FOUR primary types of needs, i.e. Information needs, Survival needs, Skills needs and the need for Support Services.


1. Information Needs

Legal Requirements: Trading licence, Business format (Company, CC, etc), Taxation, Labour laws, Accounting requirements, Software licensing, Tariffs on computers and electronic equipment.

Business plan: What is essential in such a plan and how to compile it. Market intelligence: Demographics and size of the target market. Sources of finance: Who can assist with capital requirements? Supplies (stock) procurement procedures

ACTION PROPOSALS:

Provide an information service via the ISETT SETA website for SMME's in the sector. List publications and organisations involved in the setting up and training of SMME's.

2. Survival Needs

Expert knowledge (technical) of the sub-sector (Electronics, IT or telecommunications) within which the business operates or intends operating.

Capital. Sufficient for start-up and/continued operations. Customers. Market analysis is essential. Premises and equipment. Transport.

ACTION PROPOSALS:

Recommend candidates for DTI "seed money" where appropriate, within legal requirements.

Set up "Incubators" in collaboration with the DTI. These are centres where a variety of support services are available.

Be instrumental in the establishment of developmental programs for potential SMME's similar to what is being done on a small scale at Houwteq.

In collaboration with the DTA, facilitate the setting-up of "Pool" money similar to the Stokvel concept. This "pool" money will be available to small business people who are working on contracts where payment may only be made a month or two after the rendering of a service or supply of goods.

The SETA will promote the services of SMME's in the sector to large corporations, i.e. persuade large organisations to outsource work to ISETT SMME's.

3. Skills Needs.

Sales and Marketing skills Technical skills (keep up to date with developments) Administrative and organisational skills Accounting (cash-flow analyses, budgeting, planning) Tendering skills


Managerial (where required). The flair and ability to be a successful business person (many people believe this is an

in-born skill and cannot easily be learnt).

ACTION PROPOSALS:

The ISETT SETA will have a two-pronged Training and Development programme:

Roving Mentors. Qualified and Experienced individuals will be recruited and hired on a contract basis to pass on their knowledge and expertise to SMME's IN THE WORKPLACE. This will result in minimum disruption of operations.

Teaching Workshops. A multi-disciplined programme (sales, accounting, administration, managerial) at a practical level will be devised and run after hours, say twice a week for SMME's within the sector.

4. Support Services needs:

Secretarial. Legal. Accounting. Tax advice. Advertising/promotion.

ACTION PROPOSALS:

Incubators. Centres are envisaged which will house not only SMME's forming part of the ISETT SETA but other small businesses which will supply the above services to ISETT SMME's. The benefits of reciprocity in such an incubator set-up are obvious. It will be necessary to work closely with other SETA's in this regard. In such an incubator the individual business person can be "let loose" to concentrate on his/her core business, knowing that another business is taking care of administrative work.

In line with the above proposals, links should be established with the DTI initiative, Ntsika Enterprises, which provides SME advice and support. Another initiative is the "Innovation Hub" which will be constructed on property belonging to the University of Pretoria early in 2001. This is a tripartite initiative between the Gauteng government, the CSIR and the University of Pretoria. It will consist of buildings with IT and Telecommunications facilities and companies in the sector will have a presence at the hub. This facility will be aimed at assisting SME's with start-up operations and will offer advice and secretarial assistance.


9.6.11.4 SMME's; A European perspective

The European Commission released a report on a study conducted amongst fledgling businesses. The study tried to determine what the major constraints were in establishing a new business, many of which are trying to get into e-commerce. Some of the major problems experienced by start-ups have to do with government regulations, especially in France and Germany. Another is access to finance, especially in the UK and Italy. Another issue is the easing of immigration laws to enable skilled workers from outside the EU to work in Europe. Some businesses, by contrast, report no constraint at all. The table below, sourced from Time magazine or 27 November 2000, sums up some of the constraints on performance (in percentages):

Constraint EU UK NL ITA FRA SPA GERShortage of Skilled labour 9 9 11 7 8 8 8Access to Finance 14 19 5 18 13 15 9Changing Technology 7 5 4 9 5 14 4Government related 14 11 12 14 21 9 20No constraint at all 23 20 41 19 13 34 27

Source: Time

A similar survey should be conducted in South Africa, ideally amongst small and medium sized businesses in all industries. The ISETT SETA could commission such a project amongst the SMME's in the sector.

9.6.12 Mathematics & Science

1. The SETA must establish a link with the National Scientific and Technology Forum (NSTF) and develop joint projects. The NSTF has 2 plenary sessions annually and the SETA must become active at these sessions.

2. As important as mathematics is, a vocational stream of Mathematics needs to be developed with experts in the Sector. This will result in knowledge of Mathematics which is directly related to the technology but will exclude aspects of the subject which are not essential.

3. The SETA must assist the Department of Education to develop Multi-disciplinary projects as part of the school curriculum as such projects will develop the ability of scholars to think and apply themselves to developing solutions for complex problems.

4. The SETA must conduct research to establish what learning interventions result in successful outcomes in the work environment and provide feedback to educators.

5. The impact of role models such a successful young technicians, engineers, managers must not be underrated. Such individuals could visit schools or appear on television programs to "tell their story".

6. The ISETT SETA fund and play a lead role in the development and funding of a Mathematics and Science Education Support Project which will aim to develop future entry level skills for the sector. Such a project is currently being developed and will have to go through an approval process.



10 CHAPTER TEN: Vision, Mission, Policy, Objectives, priorities & outcomes

10.1 Vision

The Vision of this SSP for the Sector is that by 2005

The sector will have undergone measurable and meaningful Productivity Improvements due to effective skills development initiatives, with emphasis on designated groups.

The sector will have successfully assimilated large numbers of new entrants into jobs requiring high skills, again with emphasis on designated groups.

The sector will be characterised by a large and growing number of successful Small businesses.

The sector will meet the challenges of Technological change and the new economy through effective training programmes (re-skilling and up-skilling).

There will be significant ongoing skills upliftment with equity within the sector so that there will much greater demographic representivity at all levels of the workforce within the sector.

The Vision of this SSP for the ISETT SETA is that by 2005

The SETA will be efficient and effective in its administration and skills development initiatives.

The SETA will be a trend-setter by being innovative and pro-active in skills development initiatives.

The SETA will be a respected focal point for all stakeholders, especially companies and unions engaged in the sector.

The SETA will play an advocacy role in the developing and adopting of unit standards.

10.2 Mission

The mission of the ISETT SETA is to

Conduct research and analysis around the sector. Establish and Promote Learnerships. Approve Workplace Skills Plans and assist employers, in collaboration with training

committees, in the preparation of Workplace Skills Plans. Allocate grants in the prescribed manner. Monitor education and training in both government and private sectors.


Develop and establish standards for education and training. Initiate, develop and implement special projects (e.g. Maths and Science programme.) Become the leading authoritative national body in respect of skills development and

related issues within the sector. Equip all stakeholders to make informed decisions regarding skills upgrading, job

creation and equity within the sector

10.3 Policy

The policy of the ISETT SETA is to

Play a leading role in the sector to promote the goals of the Employment Equity legislation.

Play a leading role in expanding proven education and training methods but, at the same time, find new and innovative methods to facilitate skills development and life-long learning.

Actively promote a growing number of Workplace Skills Plans and their implementation in the sector.

Lead the sector in the development of standards and the implementation of a variety of appropriate Learnerships.

Play the leading role in the co-ordination of training initiatives by various organisations and bodies, with stakeholder involvement.

Play a leading role in Influencing government departments and organs of the state to improve the education of South Africa's youth at primary, secondary and tertiary levels, especially in Mathematics and Science in order to meet the challenges of technology changes.

Play a leading role by working with companies in the sector and government departments and organs of the state to slow down and reverse the loss of skilled people due to temporary and permanent emigration (brain drain).

Consult and work with all stakeholders in the sector in order to improve the skills levels of the workforce and expand job opportunities for all citizens.

Play a leading role in the drive to re-skill adults so that they can take up employment in the sector.

10.4 Objectives

10.4.1 ISETT SETA alignment to NSDS

The ISETT SETA supports and aligns itself to the National Skills Development Strategy (NSDS) in the determination of its objectives. The table below shows this alignment.

NSDF Objectives ISETT SETA ObjectivesDeveloping a culture of high quality, life- Establish national standards for the sector


long learning. at all occupation levels, to ensure quality education and training.

Fostering skills development in the formal economy for productivity and employment growth

Promote the submission and implementation of Workplace Skills Plans and Special Projects. Establish and promote Learnerships at key occupational levels

Stimulating and supporting Skills Development in small businesses

Develop training and support programmes for small businesses in the sector, in collaboration with other agencies and organisations. Promote outsourcing to small businesses in the sector.

Promoting skills development, employability and sustainable livelihoods through social development initiatives

Develop and implement re-skilling programmes for retrenched workers and assist them to find employment in the sector.

Assisting new entrants into employment Obtain commitment from sector employers to employ those who are completing learnerships and/or assist them to study further or become self-employed

10.4.2 Sector alignment to the NSDS

The ISETT SETA play a leading role in the alignment of the Sector to the NSDS. The tables on the following 4 pages contain the NSDS Objectives and the Sector alignment thereto.

NOTE: The DoL Employment Equity report of June 2000 on the sector reveals that only 6964 (7.9%) out of 88719 permanent employees were classified by the sector respondents as "unskilled and defined decision making". This means the sector already exceeds the NSDS March 2005 success indicator requiring 70% of all workers to be at NQF level 1.Therefore the bar has been raised to 95% for the sector.


NSDS Objective 1

NSDS Success Indicator

SECTOR Objective

SECTOR Success Indicator

SETA 12 Month Success Indicator

Assumptions

Developing a culture of high quality, life-long learning

1.1. By March 2005, 70 per cent of workers have at least a Level One qualification on the National Qualifications Framework.

1.2. By March 2005, a minimum of 15 per cent of workers to have embarked on a structured learning programme, of whom at least 50 per cent have completed their programme satisfactorily.

1.3. By March 2005, an average of 20 enterprises per sector (to include large, medium and small enterprises), and at least five national government departments, to be committed to, or have achieved, an agreed national standard for enterprise-based people development.

Developing a culture of high quality, life-long learning special emphasis on designated groups

By March 2005, 95% of all workers to have a level One qualification on the National Qualifications Framework

By March 2005, a minimum of 30% of workers to have embarked on a structured skills development programme, of whom at least 60% have completed their programme satisfactorily.

By March 2005, at least 40 private enterprises in the Sector (to include large, medium and small firms) and SITA to be committed to, or have achieved, an agreed national standard for enterprise-based, people development.

By March 2002 92% of workers in the sector to have level One qualification on the National Qualifications Framework.

By March 2002, a minimum of 10% of workers in the sector to have embarked on a structured skills development programme, of whom at least 30% have completed their programme satisfactorily.

By March 2002 at least 10 private enterprises in the Sector (to include large, medium and small firms) and SITA to be committed to, or have achieved, an agreed national standard for enterprise based, people development.

Availability of data

NQF fully developed for sector training

Assessors trained.

ETQA functioning

Maths/science improved at school level

In-company and branded product training forms part of the national standards

Personal development skills training, e.g. management development, form part of national standards


NSDS Objective 2


SECTOR Objective



Assumptions

Fostering skills development in the formal economy for productivity, and employment growth

2.1. By March 2005, at least 75 per cent of enterprises with more than 150 workers are receiving skills development grants and the contributions towards productivity and employer and employee benefits are measured.

2.2. By March 2005, at least 40 per cent of enterprises employing between 50 and 150 workers are receiving skills development grants and the contributions towards productivity and employer and employee benefits are measured.

2.3. By March 2005, learnerships are available to workers in every sector (Precise targets will be agreed with each Sector Education and Training Authority).

2.4. By March 2005, all government departments assess and report on budgeted expenditure for skills development relevant to Public Service, Sector and Departmental priorities.

Fostering skills development in the Sector for productivity, and employment growth, with emphasis on designated groups.

By March 2005, 80% of enterprises in the Sector with more than 150 workers are receiving skills development grants and the contribution towards productivity, and employability is measured.

By March 2005, at least 50% of enterprises in the sector, employing between 50 and 150 workers are receiving skills development grants and the contribution towards productivity and employability is measured.

By March 2005, 2000 learnerships are completed and another 4000 are in progress.

By March 2005, SITA assesses and reports on budgeted expenditure for skills development relevant to Public Service, Sector and departmental priorities.

By March 2002, 75% of enterprises in the Sector with more than 150 workers are receiving skills development grants and the contribution towards productivity, and employability is measured.

By March 2002, at least 35% of enterprises employing between 50 and 150 workers are receiving skills development grants and the contribution towards productivity and employability is measured.

By March 2002, measurable progress has been made towards the establishment of Learnerships.

By March 2002, SITA has submitted a budget containing expenditure for skills development relevant to Public Service, Sector and departmental priorities.

Effective marketing of Skills Development Act and the Levy/grant system by the ISETT SETA

Effective administration of the Levy/grant system and prompt payment of grants by the ISETT SETA

Unit Standards for Learnerships have been established and Learnerships have been approved and registered.


NSDS Objective 3 NSDS Success Indicator

SECTOR Objective



Assumptions

Stimulating and supporting skills development in small businesses

3.1. By March 2005, at least 20 per cent of new and existing registered small businesses to be supported in skills development initiatives and the impact of such support to be measured.

Stimulating and supporting skills development in small businesses with emphasis on those businesses owned by designated groups.

By March 2005, at least 30% of new and existing small businesses in the sector are supported by skills development initiatives.

By March 2002 at least 10% of small businesses in the sector have been identified for specific skills development initiatives.

Refer to Section 9.11 of the SSP for SMME support

ISETT SETA mentor program implemented

Incubators and Innovation Hub implemented

A sufficient number of entrepreneurs exist that have the basic skills necessary to establish a viable business in this sector.

NSDS Objective 4 NSDS Success Indicator

SECTOR Objective



Assumptions

Promoting skills development, employability and sustainable livelihoods through social development initiatives

4.1. By March 2003, 100 per cent of the National Skills Fund apportionment is spent on viable development projects.

4.2. By March 2005, the impact of the National Skills Fund is measured by project type and duration, including details of placement rates, which shall be at least 70 per cent.

Promoting skills development, employability and sustainable livelihoods through social development initiatives.

From time to time take part in viable social development programs.

Identify 4 to 5 viable social development programs towards which a contribution can be made.

SETA is adequately staffed to handle the additional workload.

Adequate surplus funds are available.


NSDS Objective 5


SECTOR Objective



Assumptions

Assisting new entrants into employment.

.1. By March 2005, a minimum of 80,000 people under the age of 30 have entered learnerships.

5.2. By March 2005, a minimum of 50 per cent of those who have completed learnerships are, within six months of completion, employed (e.g. have a job or are self-employed); in full-time study or further training or are in a social development programme.

Assisting new entrants into employment.

By April 2005, 1500 people under the age of 30 have completed a Learnership and another 3000 people under the age of 30 have started a Learnership.

By March 2005, a minimum of 70% of those who have completed learnerships are, within 6 months of completion employed (e.g. have a job or are self-employed) or are in full time study or further training or are in a social development programme.

By March 2002, measurable progress has been made towards the development and establishment of learnerships.

By March 2002, commitments have been received from at least 20 large companies in the sector to participate in learnerships that will ultimately lead to jobs.

Capacity for Learnership establishment exists

Actual employment opportunities exist in economy

Unit standards for Learneships have been established and learnerships have been developed and approved.

10.5 Priorities

The priorities of the ISETT SETA are grouped under the headings Operational Priorities, Special programmes and Research Initiatives.

10.5.1 Operational priorities

Increase the number of Workplace Skills Plans received from employers in the sector. Establishing national standards for the sector. Establish Learnerships in the crucial areas already identified such as management,

sales, high-level programming/development, Graduate Engineers (electronic, radio, etc)

Establish the ETQA function by the 1st quarter 2001 for both external and internal quality assurance.

10.5.2 Special programmes

Implement special skills development programs, in collaboration with other institutions, such as short technical courses and management development programs in order to upgrade middle management skills (especially black managers).


To help co-ordinate the activities of the various study projects and training programmes to the benefit of the sector and its workers.

10.5.3 Research initiatives,

To conduct a sector skills audit and to qualify and quantify sector needs (who needs what training and where).

Pursuant to the skills audit to assess "people material" available at schools, technikons and universities and amongst

the unemployed and the availability of training courses taking into account appropriateness, quality,

cost, etc.

JUSTIFICATION:

Question: Why choose these specific activities as priorities? Answer: The four operational priorities form the core activities of any SETA. They will, if properly applied, achieve the objectives of the sector and the NSDS. More importantly, they will lead to large-scale skills development in the sector, improve productivity and could lead to expansion of the sector and the economy. Special programs are complementary priorities. The first one will address specific problems that can be fixed in the short term but can also assist workers to grow into other work areas. The second one came about because of the discovery that there are a large number of special training initiatives that have been developed by various bodies. Some of these could have a positive impact in skills development if properly utilised and applied. The ISETT SETA must play the lead role in co-ordinating these initiatives. Due to the lack of definitive information about the Sector and Education and Training, compounded by rapid change in technology, the SETA must conduct research initiatives as a matter of priority. The results can assist in far more effective Sector Skills Planning leading to more effective and appropriate training interventions in the future.

10.6 Outcomes

The outcomes below are related to the success indicators for each objective:

SETA/Sector Activity Outcomes by April 2005 Outcomes by 31/3/2002Establish National Standards ABET 1 training given to 95% of

applicable employees.

Establish National Standards to the extent that at least 30% of workers have embarked on structured development programs of whom at least 60% have completed their program successfully

ABET 1 training given to 90% of applicable employees.

Establish National Standards to the extent that at least 10% of workers have embarked on structured development programs of whom at least 30% have completed their program successfully


Submission of Workplace Skills Plans

At least 80% of enterprises in the sector with more than 150 workers are receiving skills development grants.

At least 50% of enterprises employing between 50 and 150 workers are receiving skills development grants

At least 20% of enterprises with more than 150 workers are receiving skills development grants.

At least 20% of enterprises employing between 50 and 150 workers are receiving skills development grants

Establishment and Implementation of Learnerships

2000 learnerships are completed and another 4000 are in progress

Measurable progress has been made towards the establishment of Learnerships

SMME Support 30% of small businesses are supported by skills development initiatives

10% of small businesses are supported by skills development initiatives

Social development initiatives Re-skilling initiatives in place. Development of re-skilling initiativesLearnerships lead to employment 70% of those who have completed a

Learnership are, within six months of completion date, either employed, self-employed or are in further study

At least 20% of large companies have committed to participate in Learnerships that will lead to jobs.


11 CHAPTER ELEVEN: Monitoring, Reporting & Evaluating

The ISETT SETA must set up a process of Monitoring, Reporting & Evaluating. The process for the first year must focus on the priorities of the SETA as outlined in chapter 10.5:

1 Operational Priorities

Priority Item Monitoring Reporting EvaluatingIncrease number of workplace skills Plans

Performed by Skills Planning function

Monthly Progress report to the CEO and SETA Board

Quarterly and annually both in terms of quantity and quality

Establish National Standards for the sector

Performed by the ETQA function.


Quarterly and annually. All activities covered

Establish Learnerships in crucial occupations

Performed by the Learnership function


Quarterly and annually. Highlight problem areas (e.g. no standards set)

Establish ETQA function by 1st Quarter 2001.

ETQA to perform Weekly Progress report to CEO, monthly to Board

Evaluate status by 1 August 2001

2 Special Programmes

Priority Item Monitoring Reporting EvaluatingImplement Special Skills Programmes

Marketing function to monitor in collaboration with other relevant functions

Report to CEO and board on monthly basis on status of various projects

Perform studies, or arrange for studies to be performed to establish effectiveness of programmes

Co-ordinate activities of various projects

Marketing function to have reviews with relevant organisations

Report on activities to CEO on monthly basis

Perform studies, or arrange for studies to be performed, to establish effectiveness of programmes

3 Research Initiatives

Priority Item Monitoring Reporting EvaluatingConduct a sector skills audit

Planning function to set dates and requirements and implement

Monthly to CEO and SETA Board

Subject to scrutiny of experts

Assess quantity and quality of learners and the availability of relevant training courses

Planning function to solicit regular data from DoE, Technikons and Universities and other providers

Twice yearly report to CEO.

Evaluate quality of data during early phase of SSP preparation

11.1.1 Other Measurements

The SETA must, over time, develop measurements for regular activities. Some examples are: State of finances; the normal day-to-day operations Levies received and grants paid


Training programmes of SETA staff Contact sessions with Skills Development Facilitators Status of provincial "offices" Contacts with government departments; DoL, DTI, DACST, DoE, DoC. Meetings & seminars with stakeholder groups Personal objectives and performance criteria for employees of the SETA (all levels) Building up of knowledge base, New sources of information on technology,

economy, HIV/AIDS, government policy, globalisation, etc Review of employee benefits and practices Updating of website


12 Appendices

12.1 Appendix A: South African Economic indicators, 2000

12.1.1 Various Indicators (Up to availability date)

INFLATIONConsumer Price Index- all items 2000.Base Year: 1995 = 1002000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecIndex%

133.8+2.6

133.4+2.4

134.8+3.4

136.6+4.5

137.1+5.1

137.9+5.1

139.2+5.9

139.7+6.8

140.4+6.8

140.9+7.1

Source: Stats SA

PPIProduction Price Index- All groups 2000Base year: June 1995 = 100

2000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecIndex%

130.9+8.2

131.6+8.4

132.3+8.6

134.6+10.1

134.8+8.7

135.8+8.8

136.7+8.6

138.4+9.3

138.7+9.4

139.8+9.6

Source: Stats SA

ECONOMIC ACTIVITY INDICATORSIndicators of Real Economic Activity, Seasonally adjustedINDICES: 1995 = 100

Year 2000MONTH

Building Plans Passed

Trade: Retail Sales

Trade: Wholesale sales

Number of new vehicles sold

Electric Current generated

JanFebMarAprMayJunJul

67.3 85.6 78.9 63.0 95.6 75.8

108.6 109.4 108.7 109.1 108.7

110.6 113.6 120.7 120.2 120.9

88.2 87.1 92.7 76.2 93.1 96.5 85.9

105.1 104.8 109.6 102.5 109.1

Source: SARB

GROSS DOMESTIC PRODUCTReal Gross Domestic ProductPercentage change 1999 2000

1st qr 2nd qr 3rd qr 4th qr Year 1st qr 2nd qr 1 2 3 3.5 1 1 1.5

Source: SARB


12.1.2 Technology stocks continue roller-coaster ride.

The following graphics appeared in the Business day of 8 January and show the stock market movements on the NYSE, NASDAQ and the JSE over the festive season and into the new year. For the ISETT SETA the performance of the NASDAQ is of particular interest

Dow Jones Nasdaq All share index

Daily Daily Daily10933 3011 8488

10821 2867 8340

10709 2723 8192

10597 2579 8044

10485 2435 7896

10373 2291 7748

10261 2147 760001/12 05/01 01/12 05/01 01/12 05/012000 2001 2000 2001 2000 2001


Source: I-NET Bridge

Close 10662 Close: 2407 Close: 8423

12.2 Appendix B: Skills Data

12.2.1 HSRC Labour Market Analysis (1999)- Graduate BSC Electrical Engineers

Number of Graduates BSc Electrical/Electronic EngineersDesignated Group compared to White Males

1991 1992 1993 1994 1995 1996 1997 1998 Total

White Males 515 410 425 398 472 393 412 469 3494Designated Employees

64 78 97 93 110 99 77 154 772

Total 569 504 522 491 582 496 489 623 4276% white males vs Designated employees

91% 81% 81% 81% 89% 79% 84% 75% 82%

(Source: HSRC)

TOTAL AVAILABILITY OF ELECTRICAL AND ELECTRONIC ENGINEERSBy Race, Gender & Province

ASIAN AFRICAN COLOURED WHITE OVERALL

Women Men Women Men Women Men Women Men Women Men Total

Western Cape 34 11 3 70 59 1345 62 1460 1522Northern Cape 2 2 43 2 45 47Free State 2 9 2 210 2 221 223Eastern Cape 2 3 9 5 2 163 5 179 184KZ-Natal 15 189 9 1 5 20 502 36 705 741Mpumalanga 5 17 5 13 7 206 17 236 253Northern Prov 4 45 49 49Gauteng 5 138 5 87 26 177 4842 187 5093 5280North West 13 2 135 2 148 150Total 25 395 13 142 4 108 271 7491 313 8136

8449 420 155 112 7762

(Source: HSRC)


12.2.2 Tertiary Education relevant to the sector.

First degree graduates in Computer Science and Data Processing from South African Universities 1992 – 1996.

University 1992 1993 1994 1995 1996 Average annual growth 1992 - 1996

Fort Hare 3 4 3 3 3 0.6Orange Free State 11 31 11 10 22 17.6Potchefstroom (PU for CHE)

52 57 49 60 37 -8.1

Rand Afrikaans University

26 40 44 34 35 8.0

Rhodes 23 32 26 14 12 -16.0Cape Town 45 58 63 44 49 2.2Durban-Westville 8 9 10 14 11 10.1Natal 43 45 43 43 43 -0.2UNISA 36 33 39 47 34 -1.4University of the North 2 2 10 0 0 0Pretoria 20 18 90 94 108 51.8Port Elizabeth 16 12 14 13 13 -5.2Stellenbosch 18 18 20 19 20 2.3Western Cape 17 3 11 15 25 10.9WITS 43 31 40 71 55 6.5Total 362 394 473 480 465 6.5

The table presented above also indicates the alarming decrease in the output of students from a large number of universities. This could have a major impact on any future IT industry strategy implementation.


Projected Output of Electrical and Computer Science Graduates 1997 – 2002Source: 1998 HSRC Telecommunications StudyGrowth scenario

1997 1998 1999 2000 2001 2002 Growth rate

Electrical engineeringModerate 531 537 543 549 556 562 1.2High 553 583 614 647 682 719 5.4

Computer science

Moderate 471 476 482 487 493 499 1.2

High 496 528 562 599 638 679 6.5

First Diplomas awarded in Computer Science by Technikons: 1992 – 1996Source: 1998 HSRC Telecommunications StudyTechnikons 1992 1993 1994 1995 1996 Average annual growth

1992 - 1996Border 0 0 0 0 14 -Cape 89 71 69 77 104 4.0Free State 29 19 36 20 20 -8.9Gauteng north 16 34 40 35 66 43.2M L Sultan 34 41 55 82 78 23.5Natal 42 28 0 21 31 -7.3Peninsula 36 25 34 33 37 0.7Port Elizabeth 43 56 59 59 68 12.1Pretoria 134 132 117 94 79 -12.3Technikon SA 1 8 84 74 51 168.6Vaal Triangle 34 37 34 22 22 -10.3Witwatersrand 69 69 69 80 82 4.4Total 526 520 597 597 651 5.5

First Diplomas Awarded in Electrical Engineering by Technikons: 1992 - 1996Source: 1998 HSRC Telecommunications StudyTechnikons 1992 1993 1994 1995 1996 Average annual

growth 1992 - 1996

Cape 107 127 113 106 125 4.0Eastern Cape 0 0 0 0 9 -Free State 59 44 33 29 52 -3.1Gauteng North 1 10 28 50 70 170.1M L Sultan 34 37 35 52 49 9.7Mangosuthu 21 14 0 43 46 21.7Natal 67 82 75 27 27 -20.3Peninsula 50 59 55 90 82 13.0Port Elizabeth 53 54 52 40 52 -0.3Pretoria 336 337 275 252 146 -18.8Vaal Triangle 135 143 138 78 148 2.3Witwatersrand 104 92 124 116 94 -2.5Total 968 998 928 883 900 -1.8


12.2.3 Findings of various surveys and other industry input

12.2.3.1 Skills required in the IT industry (SAITIS baseline study input)The 1998 HSRC Telecommunications Study is the only IT related comprehensive study to be carried out on skills supply/demand. Nevertheless, The CPL Survey reveals staff shortages in the following areas:

Environment Required skills – platform specificMainframe CICS

COBOL

DB2NATURALADABASCONSTRUCT

Mid-range PC’s RDBMS (Oracle, Sybase, Informix, Ingres)Small PC’s Visual Basic

DelphiC++

Networking NovellWindows NT

Other SAPBAAN

Source: HSRC

NOTE: This 1998 study still has validity but, due to significant changes in the sector, it should be compared with the other studies in this section


12.2.3.2 Electronics & Telecommunications- Companies' report

The FSA Contact report based on input by companies in the sector indicated that the following occupations were in high demand whilst the labour market supply was low or medium. The report also lists those occupations where an oversupply exists.

Job Title Education & Training requiredSystems Engineer BSc/BEng

1st Year Project Management2nd Year System Engineering Management

Software Engineer BSc/BengSoftware: C, C++ and OS21st Year Shlaer Mellor training

Technology Strategist BSc Engineering & ElectronicsTelecommunications Technician

N6/T3 diploma electrical engineering4 years Telecomms experience

Radio Frequency Planner 2 years experience in Electronics EngineeringProject Manager BSc/B.Eng. plus postgraduate or technical qualification plus

5 years engineering experience3 years project management experience

Electronics Engineer University graduates, focus on analogue and/or digital field and radio frequencyAccount Engineer BComm or equivalent in engineering

Commercial/legal/financial educationTelecomms experienceExperience in African countries

Product Manager BSc Electrical EngineeringBusiness skills2-3 years GSM radio, DECT, microwave experience. Computer literate

Tenders Manager T3/T4 and 5 years Telecomms experience


12.2.3.3 Employment Agencies' report (telecomms/electronics)

Job Title Education & Training requiredRadio Planning Engineer BSc Electrical + Networking diploma plus 5 years experienceProject Manager BSc plus postgraduate qualification

Or Computer Science degree and telecommunications background5 years engineering and 3 years project management experience

Product Manager BSc Electrical Engineering plus business skillsTechnical Author BSc with technical experience plus knowledge of HTML, Frontpage, Visio 5

and Corel DrawAccount Executive 5 years experience (sales)Support Engineer BSc/BengSolutions Architect BSc + 5 years experienceSwitching Engineer Light current Electronics (4-5 years experience)Specialist: Intelligence Computer Science degree/experience in telecommunicationsRadio Engineer N6/T3 plus 4 years experienceRadio Installation Officer N6/T3 Radio Frequency KnowledgeOptimisation Analyst BSc and experience neededOptimisation/Planning Engineer BSc in electronics plus experienceHigh Level Support Technician BSc in electronics plus experienceConfiguration Electronics degree plus experienceRadio Maintenance Degree plus experienceTransmission engineer Electronics degree plus 10 years experienceTechnical Assistants: Radio maintenance

Degree plus experience

Switch implement Engineer Light current diploma plus 4-5 years experienceNetwork support engineer Electronics/Computer science degree + experienceNetwork Planner Electronics/Computer science degree + experienceTechnical specialist GSM Electronics degree plus experience in telecommsIn-building planning engineers, Radio frequency

Degree in electronics, radio frequency knowledge

Performance Management Engineer BSc degree plus experienceInternet Protocol Voice and data engineers

BSc degree plus experience

Technical Sales Degree or N6/T3 with 3-4 years hardware sales experience

12.2.3.4 Information Technology- Employment Agencies ReportJob Title Education & TrainingWeb support/development 2 years experience in graphic design. Experience with HTML, Java, &

Microsoft products as well as Java Script, Visual Basic and ASP. Also knowledge of SAP

Data Warehousing Exposure to SDLC projects in Financial services. Exposure to Cognos or Business Objects. Oracle

E - commerce As for Web development plus business knowledgeSQL At least 2 years experienceInternet development In depth knowledge of Java, ASP, Visual Basic, C++, Perl, Delphi on

Windows/Unix. Degree/diploma with 2 years development experienceProject Managers BSc/Elec/Computer Science degree. Development experience, C++, VB

Windows Nt and/or Unix. Must have 2 to 7 years multiple project management experience

Systems Architect BSc/BIS plus 5 years experience as systems analyst with architecture definition and implementation. Use of case tools, JAD, RAD. Exposure to Oracle, OS, RDMS, NT and Unix

Java Programming At least two years experience


ISETT SETA study

Occupations that are in high demand in the IT sector and in short supply in the Labour MarketEmployee Group Job Titles NQF Levels

Senior Management MD's. Directors, Divisional and regional Managers, Financial and Management Accountants, Senior executives with specific functions (e.g. Legal)

5, 6 and 7

Sales & Marketing Business Unit Manager, Client Relations Manager, Commercial Services ManagerMerchandising Manager, Product ManagerProject Manager, Sales Manager, Account Manager, Sales Person

4 & 5 (some 6)

Software Development & Support Systems Analyst, Training Consultant, Website Developer, Systems Engineer, IT Manager, Software Support Manager,Programmer & Analyst/Programmer,Application Program Specialist, Systems Architect.

4, 5 & 6

Customer Service & Support Diagnostician, Component repair Engineer/Technician, Senior Engineer/Technician, Field Application Engineer, Telecommunications Engineer, Hardware Design Engineer, Transmitter Manager, Team Leader, Transmitter Technologist

4, 5 & 6

Logistics Administration Exports Administrator 4 & 5Personnel Administration Line Service Consultants

HR Programmes Manager (IR/Gender issues) 6 & 7


12.2.4 Vacancies study by the ISETT SETA, 2000

Number of current employees by Job Category and geographical area

Vacancies

Job Category Gauteng Western Cape

Kwa-Zulu Natal

Oth.

Tot. Current 2001

No % No %

Top Management (policy making)

196 16 10 6 228 3 1 33 14

Senior Management (policy implement.)

175 34 33 13 255 13 5 31 12

Professionals, Specialists, middle management

501 108 29 12 650 48 7 98 15

Skilled Technical staff, supervisors

1226 186 129 84 1625 124 8 223 14

Sales/Marketing 488 88 81 36 693 88 13 160 23Admin/Accounts 669 105 76 48 898 27 3 72 8Artisans 23 0 0 0 23 10 4 15 65Catering staff 17 3 1 1 22 1 5 0 -Cleaning staff 89 16 12 2 119 1 1 0 -Totals: 3384 556 371 202 4513 315 632% by region 75 12 8 4

This study tried to establish the number of vacancies in the sector by occupational category. It also tried to establish the geographical distribution of the sector. The findings were used in Chapter 8, employment needs.


12.3 Appendix C: SIC Codes

GOVERNMENT GAZETTE Vol. 417 No.21012

GOVERNMENT NOTICES

DEPARTMENT OF LABOURNO.265; 20 MARCH 2000

SKILLS DEVELOPMENT ACT, 1998 (Act No 97 of 1998)NOTICE OF AMENDMENT OF A LIST AND SCOPE OF COVERAGE OF SECTOR EDUCATION AND TRAINING

AUTHORITIESI Membathisi Mphumzi Shepherd Mdladlana, Minister of Labour, has under section 9(2) of the Skills Development Act, 1998 (Act No. 97 of 1998), amended the List and Scope of Coverage of

Sector Education and Training Authorities published in the Government Notice No. R.1013 of 07 September 1999.

M.M.S MDLADLANAMINISTER OF LABOURSETA 12 : INFORMATION SYSTEMS, ELECTRONICS AND TELECOMMUNICATION TECHNOLOGIES (ISETT) SIC Code

Gazetted Scope of Coverage

Notes of Amplification

75200 Telecommunication Includes the transmission of sound, images, data or other information via cables, broadcasting, relay or satellite. Also included is the maintenance of the network.

75201 Telegraph Establishments primarily engaged in furnishing telegraph and other non-vocal message communications services, such as cablegram, electronic mail and facsimile services

*

75202 Television and radio signal distribution

Establishments primarily engaged in television broadcasting and the operation of broadcasting studios for programmes of entertainment, news, talks and the like. This industry includes establishments primarily engaged in operating television and radio broadcasting networks and relay systems.

*

75203 Cable TV services Establishments primarily engaged in the dissemination of visual and textual television programmes, on a subscription or fee basis. Included in this business are establishments which are primarily

*


engaged in broadcasting television and frequency modulated radio signals to subscribers by means of co-axial cable and community antennas.

75204 Telephone Establishments primarily engaged in furnishing telephone voice and data communications, except radiotelephone and telephone answering services. Also includes establishments primarily engaged in leasing telephone lines or other methods of telephone transmission, such as optical fibre lines and microwave or satellite facilities, and reselling the use of such methods to others.

*

75205 Radiotelephone Establishments primarily engaged in providing two-way radio telephone communications services, such as cellular telephone services. Also includes establishments primarily engaged in providing telephone paging and beeper services and those engaged in leasing telephone lines or other methods of telephone transmission, such as optical fibre lines and microwave or satellite facilities, and reselling the use of such methods to others.

*

86001 Pre-packed software Establishments primarily engaged in the design, development, and production of pre-packaged software. Important products of this business include operating, utility and application programmes. Establishments of this business may also provide services such as preparation of software documentation for the user, installation of software for the user, and training the user in the use of the software.

*

86002 Computer integrated design

Establishments primarily engaged in developing or modifying computer software and packaging or bundling the software with purchased computer hardware (computers & computer peripheral equipment) to create and market an integrated system for specific applications. These establishments must provide: development or modification of computer software;

*


marketing of purchased computer hardware; and involvement in all phases of systems development.

86003 Computer facilities management

Establishments primarily engaged in providing on-site, facilities management, outsourced services management and operation of computer and data processing facilities on a contract or fee basis.

*

86004 Computer maintenance and repairs

Establishments primarily engaged in the maintenance, servicing, support and repair of computer systems and related computer equipment, including network solutions.

*

86005 Computer rental and leasing

Establishments primarily engaged in renting or leasing computers and related data processing equipment on the customers' site, whether or not also providing maintenance or support services. Establishments both manufacturing and leasing computers and related data processing equipment are classified in manufacturing, and separate establishments owned by the manufacturer and primarily engaged in leasing are classified in wholesale trade.

*

86006 Computer programming

Establishments primarily engaged in providing computer programming services on a contract or fee basis. Establishments of this business perform a variety of additional services, such as computer software design and analysis, modification of custom software, and training in the use of custom software

*

86007 Computer related activities

Establishments primarily engaged in supplying computer and business equipment related services, not elsewhere classified. This includes establishments providing computer processing and data preparation services, on-line information retrieval services on a contract or fee basis, as well as installation, cable-laying, environmental services, systems design and system commissioning for computer networks and other computer related activities.

*

86008 Call centre and customer relationship

Establishments primarily engaged in supplying computerised help desk solutions (hardware and

*


management system development

software), customer relationship management systems, call centre infrastructure, hardware and software.

87142 Research and development of electronic equipment and systems

Establishments primarily engaged in research, design and development of high technology electronic systems.

*

87143 Import and product integration of pre-manufactured electronic it and telecommunications equipment

Establishments primarily engaged in the importation and/or integration of pre-manufactured electronic modules, electronic, computers and computer peripheral, electronic business and telecommunications equipment, to create, develop and market integrated business solutions/systems for specific applications. Included is the repair, servicing and technical support of integrated computer/electronic/ telecommunications product solutions.

*

96131 Providing radio and television transmission signals

Establishments primarily engaged in operating radio and television broadcasting networks and relay systems.

*

SIC Codes marked with “*” are not included in list of SIC Codes used by StatsSA

List and Scope of Coverage of Sector Education and Training Authorities

(NO.20442 - GOVERNMENT GAZETTE - 7 SEPTEMBER 1999)


http://www.isett.org.za/govermentgazette_1.htm



12.4 APPENDIX D: Grant "D" Research Questionnaire

The ISETT SETA is currently establishing criteria for the awarding of Grant "D" to employers in the sector. Grant "D" is a discretionary grant and is designed to reward training initiatives that address skills shortages in the sector. In order to be considered for the Grant "D" this questionnaire must be completed. It is both a survey of sector needs and a guideline to employers towards the implementation of developmental initiatives that will help address training requirements at present and in the future. Information contained herein shall remain confidential.

Please download and complete this document in full. Return the document by e-mail to [email protected] by 29 November 2000. You can address any questions you may have about this document to Johan Rossouw at telephone (011) 805-5115.

Company Details

Company Name:Postal Address:(Head office)Tel:Fax:Name of SDF:Tel: of SDF:Cell of SDF:e-mail of SDF:

Sub sector

In the table below indicate the extent (per cent) to which your business is active in either Telecommunications, Electronics or Information Technology. If a portion of you business is outside this SETA, indicate the percentage and state the nature of the business.

Sub-Sector %TelecommunicationsElectronicsInformation TechnologyOther (specify below)

Geographic distribution



Please indicate the geographic distribution of your business operations by number of employees in each province.

Province EmployeesEastern CapeFree StateGautengKwa-Zulu NatalMpumalangaNothern CapeNorthern ProvinceNorth WestWestern CapeTotal employees:

Skills needs (shortages)

In the table below, please list those occupations and/or specific skills which, in your experience, are essential for the survival and growth of your business and difficult to fill should vacancies arise, or due to growth in your business.

Indicate the number of these key employees you need currently and the projected number you will need by the end of 2002.

Occupation (job title)

Education/training required No. requiredCurrently

Projected No. by end 2002

Current and Proposed Training and Development Programmes and other Activities.

In view of your answers in Section 4 above, list the current and proposed training courses and programmes you are conducting and intend to conduct to cater for these vacancies or shortages in your company and the industry.

Current courses/Programmes(2000/2001)

Number of enrolments by race/gender

Course/Programme name M/F African Indian Coloured WhiteMaleFemaleMaleFemale


MaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemale

Approximate total cost of above courses programmes R

Current courses/Programmes(2001/2002)

Number of enrolments by race/gender

Course/Programme name M/F African Indian Coloured WhiteMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMale


FemaleMaleFemaleMaleFemaleMaleFemale

Approximate total cost of above courses/programmes R

External, community-type courses and programmes

Is your company in any way funding or intending to fund external courses, programmes or scholarships that will contribute to developing potential candidates to fill vacancies in your sector of business in the future? If so, provide details of such courses, programmes and scholarships below.

Description of course, programme or scholarship Duration (dates) Cost(Rands)

From To

Number of Beneficiaries by race and gender African Indian Coloured White

Male

Female


12.5 Appendix E: General issues affecting connectivity in South Africa

Satellite Internet Access

Satellite delivery of Internet services promised to deliver greater speed and relatively cheaper rates to consumers and corporates who seek an alternative to leased lines. Satellite services usually work by using a modem or leased line to send outbound traffic (56k upwards) and then allow incoming traffic to arrive directly via the satellite feed (64k upwards) which is connected directly to the user’s computer. This is an asynchronous data transfer – i.e. the upload and download speeds are not the same. Satellite service providers count on the fact that most Internet traffic is inbound and that, although there is a large difference in bandwidth between incoming and outgoing traffic, the speed of the incoming traffic will mask any imbalances there might be. There are also regulatory provisions governing incoming and outgoing traffic, which make it necessary to use conventional methods for outbound traffic.

The two major providers of satellite Internet access are Infosat, a division of Infoline (Pty) Ltd which was recently involved in a management buyout with its parent company Pinnacle Holdings, and Siyanda, part of M-Web. Both of these companies offer similar services within a similar pricing structure (both offer subsidised hardware subject to extended contracts). Both companies also focus on highlighting education initiatives that each has supported through its high-speed service provision: Siyanda to the Shoma Education initiative; InfoSat to Myeka High School and the Learning Channel Campus.

The satellite providers are in the early stages of building their user bases, and currently the researchers do not expect that this technology will overtake traditional access methods. Subscriber figures are still low and the providers need to achieve a critical mass within a short space of time to pose a serious challenge to other access methods. Deregulation and implementation of alternative access methods with similar speed advantages (e.g. DSL) could pose a serious threat to the consumer satellite industry. A recent survey by Telecommunications Reports International in the USA reports moderate (10%) growth in the dial-up market, with more aggressive growth in the DSL and cable modem market, (183% and 44% respectively). This strong growth rate can also be attributed to infrastructure availability and innovative marketing drives by American companies.

The consumer satellite access market is very small in the US due to the variety of cheaper comparable access methods available. However, two-way broadband satellite access is currently being tested by a number of ISPs in the US and could quickly be implemented through the large installed base of satellite TV subscribers. Companies such as Gilat, Microsoft and Echostar are also partnering to offer satellite TV as well as high speed 2-way Internet access via the same dish. This market looks set to explode towards the end of 2000. If South African vendors wish to market similar services, regulations have to be altered to allow bi-directional satellite traffic.


Township penetration and disadvantaged communities

Digital Villages

Microsoft’s digital village initiative aims to bring Internet access and computer literacy to disadvantaged communities in South Africa, in line with its Community Investment Policy. Thus far five of these digital villages have been implemented with a number of partners and varying degrees of success.

The first digital village at Chiawelo in Soweto was opened in association with Africare, Intel, CompuComp, Pinnacle, Mustek and Hitech and is the most successful to date. It has a 64k leased line that is shared between 37 workstations. It boasts 700 members with an average age of 21 who pay membership fees of R480 per annum (or R40 per month).

The next largest digital village is in the Cape Flats area in Cape Town. The partnership between Microsoft, Kodak and Africare has attracted more than 250 members who are between the ages of 16 and 20. This slightly smaller facility has 15 workstations which share a 64k ISDN connection. Membership fees are R360 annually.

The Orlando installation has the next biggest membership, with approximately 210 members who are aged between 25 and 30. However it also has the slowest access – with an analogue dial-up connection split between the 15 workstations. The partners are Africare and Intel.

Africare, Intel and De Beers Mines partnered to sponsor the Galeshewe, Kimberley, digital village which has 143 members. The average user age is 20, and they use 15 workstations and an ISDN connection.

The smallest (in terms of membership) digital village is at the Koinoinia Community Centre at Paarl in the Western Cape. It currently has 30 members who use a 64k leased line split between 10 workstations.

The workstations in the digital villages are mainly used for e-mail, IT training, research and entertainment. Only the Chiawelo village reported that its members used the facilities for job searching.

SOS Children’s Villages

The SOS Children’s Villages consist of about 15 houses each that are used to care for orphans and disadvantaged children. Microsoft and HP have sponsored machines and Internet connections for these villages to allow the children access to technology and education. The communities in the surrounding areas are also encouraged to use the facilities in the Children’s Villages, thus fostering stronger ties between the children and the community. There are already Children’s villages in Cape Town, Umtata, Mamelodi and Pietermaritzburg with further developments planned for Ennerdale and Port Elizabeth.


Both of these types of digital villages serve to increase training and access for disadvantaged residents – both schoolchildren and adults. However, there are not enough of them, or enough infrastructure, for them to have an impact on ISP usage statistics at this time.

Telecentres and the Universal Services Agency

The confusingly acronymed USA is not a large North American country but rather the twin organisation of the highly controversial SA Telecommunications Regulatory Authority (SATRA). Like SATRA, the Universal Service Agency is a statutory body that was created through the Telecommunications Act of 1996. It started full operations in March 1997, and was officially launched on 16 May 1997. While the long-term goal of the USA is to achieve “universal service” (a telephone in every home), its more immediate task is to provide “universal access”, which it views as a public telephone within a reasonable accessible distance.

The USA conceived of a Telecentre project, in line with similar initiatives around the world, to provide sustainable telecommunications to previously disadvantaged South African communities. A basic Telecentre consists of between six and 10 telephone lines, a telephone management system, fax machine, photocopier, scanner, printer, five computers, Internet and e-mail facilities and an overhead projector.

Six pilot Telecentres were in initially set up in the following order: Ga-Seleka, Northern Province on 19 March 1997; Ndevana, Eastern Cape on 1 April; Thaba Nchu, Free State on 16 April; Pescodia, Northern Cape on 22 April; Bamshele, KwaZulu Natal on 28 April; and Winterveldt, North West on 12 May 1997. Such a swift roll-out suggested much promise, but it was not to be.

Telephones are by the far the most used commodity at all Telecentres, followed by photocopying and faxing. Computers are severely under-utilised at most centres, as are scanners. Internet access by Telecentre users is rare.

Most of the pilot telecentres have been operational for just over a year. The lack of computer usage during this period could be attributed to teething problems with the computers as well as low levels of literacy and computer literacy. In addition, aside from English, there are no user interfaces for the 10 other official languages in South Africa.

Exacerbating the situation, the computer sections of these centres are poorly utilised because of lack of training and poor maintenance of the computers, due to the rural nature of the sites and distance from technically qualified staff. Microsoft has stated its intention of establishing digital villages in these centres and ensuring that the trainers are sufficiently trained to manage them.

Another obstacle facing Internet access for Telecentre users is the high usage charge. Direct costs of connection could range from R6 to R12.40 for 10 minutes on the Internet (excluding a minimal mark-up). Such costs are extremely high when one considers that 26% of South Africa’s population earns R500 or less a month and 62% of the population earns R1 500 or less a month.


High costs could be attributed to the distance of the telecentres from the nearest Point of Presence (PoP), which in many instances is more than 100 kilometres, therefore incurring long distance rates. While preferential rates would appear to be an obvious solution and a natural contribution by the State towards its own goal of universal access, Telecentres do not enjoy preferential rates from Telkom. It is believed, however, that the Agency is in discussions to negotiate lower rates for the centres.

USA reported the following difficulties after the first year of operating the Telecentres:

A major difficulty of the telecentres is that there are no proper financial systems at most of these telecentres. The operators cannot accurately record transactions. For example, they are not able to generate a shift report from the telephone management system or from the fax machine. The training was good, but very general. It did not prepare them for the day-to-day activities of running a business.

There is no clear understanding of responsibilities and obligations. For example, some Telecentre operators think that the USA has to pay their salaries. This is clearly inadequate communication on the part of the USA as well as from the representatives of the Telecentre organisation who themselves received training from the USA.

There is no tariff and pricing guideline. At one Telecentre, for example, users are charged R0.30 per page to make a photocopy. This is well below cost. On the other extreme, to send a fax outside a province, the user pays R7.50. The point here is that the price is not related to costs.

Security is another major concern. When a theft occurred at one Telecentre, it was not clear whether equipment was insured.

There is sub-optimal use of the equipment.

In summary, the Telecentre organisations are not in a position to properly manage their business. They are unclear about their responsibilities. The USA does not have a management system to monitor the performance of the Telecentres and detect misuse or misappropriations should they occur. There may also be a need to clarify the role of the USA as the franchiser.

Kiosks

A quote from the Bill Gates book “The Road Ahead” regarding public access Internet terminals seems to have spurred a number of world-wide initiatives in this regard. The two main vendors of Internet access kiosks in South Africa are Cyberhost with its CyberXpress solution and The South African Post Office with its PIT (Public Information Terminal) offering.

Cyberhost have developed an Internet vending system, which they have dubbed the CyberXpress Internet Kiosk. The machine consists of a 2m high cylindrical device that


contains an entry level Pentium PC, a keyboard, speakers, a laser printer and a coin operator. The software is custom developed by Cyberhost and the rates range from R5 for 10 minutes of access to R1 per printed page. Cyberhost recently sold its dial-up user base to concentrate on its kiosk and corporate business. It currently runs 45 terminals based in various locations in Cape Town, Johannesburg and Port Elizabeth.

The PIT Terminal is a joint project between the South African Post Office and the Department of Communications. So far, only pilot sites are operational, and the SAPO is unable to give any indication of intended rollout timeframes.

According to the Department of Communications, the Post Office has committed R2-million to the development of the pilot and prototype design of PIT. Installation of the first four pilot sites commenced during the second half of February 1998. So far they have not been a factor in Internet growth.

Internet Appliances

PCs remain the overwhelming choice for Internet access device, but 2000 is the first year that information appliances will make an impression. However, it is unlikely that information appliances could match the number of PCs used for web access in the next year or two, and this scenario is likely to emerge only around 2004 or 2005. The key obstacles inherent in the present range of appliances include:

Web-TV: Clumsy interface and low-grade technology that is appropriate mainly for specially-designed web sites with, ironically, lower levels of interaction than PC-accessed sites. E-mail reading and writing is more public (due to the positioning of TV sets in most homes), as well as inappropriate for a screen that is usually viewed from a distance of several metres.

Wireless Application Protocol: The first generation of WAP technology can be regarded as DOS for the cellular phone; it is a primitive interface that results in a lengthy procedure to reach the desired information or transaction that is supposed to be facilitated by WAP. Until variable tariffs are introduced for data calls, it will also not be a cost effective means for conducting transactions.

Personal Digital Assistants: PDAs have become ubiquitous among business executives, especially in the IT arena. Very few PDAs are equipped for mobile Internet access, however, and the early Internet-enabled PDAs tend to rely on specialised access services that are only available in the United States, Europe and Japan. When such services and devices are rolled out in South Africa, possibly in the next two years, the initial users will be of the early adopter type, i.e. technologically-literate users who would already have Internet access. In other words, e-PDAs will not contribute to market growth in the short term.

Internet-only Appliances (e.g. the Netpliance device, the Virgin access device): These are often “disguised” PCs using older technology and custom-built versions of Operating Systems like Linux, QNX, FreeBSD and BeOS. Their main function is to provide access to the Internet through their vendors’ ISP services. The


vendor subsidises the hardware, but requires the customer to sign a minimum contract with the ISP. These devices have not entered the South African market at all and it is thought that they may only be available in 2002/3, if at all. New approaches to this business model, i.e. low-cost mobile browsing or e-mail specific devices that plug into a phone line, may well supersede these devices.

The regulatory environment

Pulling the teeth of the SATRA watchdog

This section is adapted from an analysis written by Michael Sharon for the African Communications journal

"It is important to stress that situations in South Africa that limit competition, such as limiting the opportunity for business, are actually limitations on the historically disadvantaged," - Nape Maepa, chairman of SATRA, 1998

When SATRA was first founded, the Department of Communications had the best intentions of delivering a world-class independent regulatory and policy implementation service.

In theory, SATRA (South African Telecommunications Regulatory Authority) had a glowing vision. It envisaged that: “As an independent and impartial body, SATRA will be the leading authority on telecommunications development and regulatory policy that successfully implements the objectives of the Telecommunications Act, in the public interest, through dynamic, transparent and innovative regulation.”

How did it all go so wrong?

In pre-rainbow nation South Africa, The Department of Post, Telecommunications and Broadcasting was responsible for regulating the telecommunications environment, including the radio frequency spectrum.

The commercialisation of parastatals within the department occurred in 1991, thus bringing about the existence of Telkom, the South African Post Office, and a downsized Department of Telecommunications, which still had its original regulatory responsibility.

Shortly after the first democratic elections in 1994, the Department went through a Green/White Paper process to review all aspects of telecommunications regulation. This was in line with the government’s desire to let telecommunications play a large role in the reconstruction and development of the country.

Using South Africa’s leading experts in the telecommunications field and consulting with telecommunications experts and consultants abroad, the process gave rise to the Telecommunications Act 103 of 1996 passed by Parliament in November 1996. SATRA


came into being with the passing of the act, the first councillors were elected in December 1996, and it commenced operations in February 1997.

Looking at SATRA’s formation in the Telecommunications Act, we can already see the seeds of its demise being sown. From the start it has been crippled by its inability to become a truly independent body. In it’s founding provisions, the Act states that it’s funding shall come from parliament, while the remuneration of it’s members would be determined by the Minister in the Department of Communications (then Jay Naidoo, currently Ivy Matsepe-Casaburri).

Financial independence is an essential requirement for a body to consider itself independent. Without funding, nothing can be achieved, but the source of the funding can control the outcome of the body’s decisions. Ideally, it should be the users of telecommunications rather than the government that should provide this funding. Score 1 for the government, 0 for SATRA. Added to dubious independence is the ability for all its decisions to be amended, withdrawn or substituted by the Minister of Communications. Final score is 2-0 to the government, all penalties and fouls allowed.

Although SATRA was crippled by fundamental limitations in its structure from the beginning of its operations, it has managed a number of decisions in the morass of the South African telecommunications environment.

In its first year of operation, SATRA was first tested by international call-back operators, whom Telkom claimed illegally cost it 3% of its international business. SATRA banned these operators without warning on August 12 1997 and gave them two weeks to wind up operations. Gianfranco Cicogna, head of SACBA (South African Call Back Association), stated that “SATRA does not have powers to prosecute, it does not have the authority to ban and was acting outside its authority as a regulator.” He was proved right, as SATRA withdrew the ban shortly after. SATRA lawyers issued a statement that included comments such as “Our client has no prosecutorial powers…. Our client has never intended, nor does it intend, to impose penalties on anyone contravening the provisions of section 101 of Act 103 of 1996 without there being a conviction following criminal proceedings. Moreover, such imposition could not be by our client.”

The next wrangle in which SATRA attempted to sever the Gordian knot was a three-way battle between itself, Telkom and the Internet Service Providers Association. Telkom claimed that the Internet - technically, access to the IP protocol - fell within the provisions of its exclusivity agreement with SATRA and therefore it should have a monopoly on all Internet services. In October 1997, SATRA ruled that this was an invalid argument and Internet services could be commercially provided. Telkom then made several appeals to the High Court to set aside the order, resulting in the case dragging on for another 6 months.

Since then, SATRA has attempted to make a number of rulings and, most recently, two have received much attention.


Firstly, early in 2000, there was the highly controversial decision over the awarding of the third cellular licence in which SATRA named Cell C as the preferred bidder. The decision disregarded its own findings and an external report by BDO Spencer Steward, which recommended AfricaSpeaks and Nextcom’s business plans as being far more economically sound than Cell C’s. The latter projected a net operating loss for the next five years. All this amid an uproar over the resignation from the adjudication process of SATRA chairman Nape Maepa due to a conflict of interest.

AfricaSpeaks made a representation about the selection process that accused SATRA of failing to apply its mind to the content of the applications and stated that the entire evaluation process was flawed.

“In evaluating the applications SATRA did not fully take into account certain objectives of the Act and in some instances disregarded the law,” one part of the document reads.

This came only months after a report by the Portfolio Committee on Communications in November 1999, which highlighted an apparent rift in the ranks of SATRA. The report is the outcome of a fact-finding exercise into alleged irregularities within SATRA that found in its conclusions that “…the SATRA Council and its staff are riddled with tensions and suspicions, and these have the potential to undermine the stability of the telecommunications sector.”

Secondly, and most recently, SATRA released its interconnect and facility leasing guidelines which were gazetted as a measure to bring greater clarity to the telecommunications regulatory environment. This was in response to many criticisms of SATRA’s rulings and delays. SATRA had been slated for not creating proper regulations, specifically with regard to areas that are not covered by the Telecommunications Act of 1996. SATRA was widely regarded as ensuring a regulatory vacuum with regard to voice and data traffic, making the arena infinitely more complicated than necessary.

However, shortly after the release of these guidelines, they were entirely withdrawn by the Department of Communications in a single page communication to SATRA. The authority has yet to receive a response to its request for clarification of what it sees an as an “attempted withdrawal”, as Maepa contends that only SATRA can amend regulations once published.

Not only does this infighting decrease confidence in SATRA as an effective regulatory body, it also makes a mockery of its independence from the Department of Communications and its ability to enforce its rulings.

At the same time, SATRA published another set of draft regulations which define Internet service provision, voice signals and virtual private networks, and these are apparently unaffected by the fall-out between the department and the regulator. The Internet Service Providers Association (ISPA) is concerned about several points, as it explained in a 20-page written submission it released in the first week of May:


“The ISPA is concerned at the attempt in the regulations to provide rigid definitions to services,” the document reads. “This potentially limits innovation and may result in excessive bureaucracy, as it is impossible to re-define every new service and product as they emerge, especially in light of the rapid pace of development in this industry.”

Rather than defining and licensing ISPs and VANS, ISPA believes, SATRA should define what a public switched telephone network is, and allow anything that falls outside that definition. “The definition of a PSTN should be informed by criteria that characterise ‘pure transmission' and everything that falls outside of that should be considered a VANS,” the association says.

In other words, says the VANS industry, define Telkom’s operating parameters and let the rest of the market roam free.

But ISPA does not expect the regulator to necessarily agree with such a recommendation, and asks for fairness in licensing if that route is followed. Among the issues it would like to see addressed are the differences between services allowed to Telkom and the cellular networks but denied to VANS, licence and application fees, and SATRA's proposal that Telkom be used as executioner if any VANS or ISP is found to have broken the rules.

All of these incidents have led up to the forthcoming merger of SATRA and the Independent Broadcasting Authority (IBA), which is in line with the White Paper on Telecommunications Policy of 1996, which stated that: "Telecommunications and broadcasting will in the medium term be regulated by a single authority".

There will be a new Communications Bill tabled in Parliament in the near future which seeks to address some of the most serious criticisms of both the IBA and SATRA. The new body, which will now be called the Independent Communications Authority of South Africa (Icasa), will have constitutionally entrenched independence. Express provisions will ensure that Icasa is subject only to the Constitution and the law and will be relatively free from political and commercial interference.

Sections in the Telecommunications Act which allow regulatory decisions to stand, even if improper interest is later established on the part of a councillor, have been amended, although more material amendments need to be made. If the Act is not further changed substantially, the Minister of Communications will still be able to control policy, which is a serious hindrance to Icasa’s independence and constitutionality.

SATRA has been ridiculed as an ineffective and largely powerless body that is subject to government, as well as the Minister of Communications. It has little or no credibility with regard to its independence or its decision making process. If South Africa is to succeed in a globally competitive telecommunications environment, it requires a highly credible, fast moving standards body that is able to make regulations, have the authority and means to enforce them and not be hampered by political or commercial interference.


Changes in world ranking

Network Wizards (http://www.nw.com), who run the biannual Domain Name System (DNS) Survey, released the numbers for their January 2000 survey during February 2000.

The DNS Survey essentially measures the number of domains worldwide with IP addresses, the technical four-number addresses formally assigned to Internet hosts - computers with permanent connections to the Internet. Until a few years ago, each IP address represented one host or computer connected permanently to the Internet. Today, one host often has several IP addresses assigned to it, especially when it hosts several web sites and domains. Consequently, the methodology of the survey was changed at the beginning of 1998, resulting in a significant shift in the trend line of growth in Internet hosts. In some countries, like Singapore, the number even appeared to go down, despite a growing industry.

For South Africa, the immediate consequence was an apparent dramatic slowdown in growth of Internet connectivity in January 1998. Ironically, while the statistics resulted in overreaction to the slowdown in South Africa, warnings of a "slow-down" became reality a year later. According to the January 1999 survey, South Africa finally fell out of the top 20 most connected countries in the world, ranking 21 in terms of number of Internet hosts. In July 1999 it fell to 25th, and maintained that position in January 2000. However, the July 1999 figure appears to be an anomaly, as it is highly unlikely that the host number could have dropped, and then rebounded dramatically during the next survey period.

The DNS surveys for the last five years (from when they began breaking down numbers by Top-Level Domain Name, which identified individual countries) show the following numbers of Internet hosts in South Africa and its world ranking (the methodology of the survey changed at the beginning of 1998):

Date of survey Number of Internet hosts

World ranking

January 1995 27040 17th

July 1995 40696 15th

January 1996 48277 18th

July 1996 83349 14th

January 1997 99284 16th

July 1997 117475 18th

New methodologyJanuary 1998 122025 17th

July 1998 140577 20th

January 1999 144445 21st

July 1999 140470 25th

January 2000 167635 25th


In the past four years, in other words, South Africa has steadily dropped back in the rankings from being an apparent world leader at number 14 to falling out of the top 20.

The reality is that that 14th ranking was itself an anomaly. It was a factor of more industrialised and richer nations having woken up later than South Africa to the opportunities offered by the Internet. This situation came about partly because of regulatory issues, and partly because of the lack of "early adopter" cultures elsewhere.

It was obvious that countries like Russia, Brazil and Korea would overtake South Africa, as has happened in recent times. This country will also be overtaken by the likes of Austria in the short term, since they have either more growth potential, and eventually also by heavily populated countries like Mexico and Argentina, who are still far behind.

Since Internet connectivity will eventually be a factor of population and infrastructure as much as of competitiveness, the real issue is not where one country ranks - although that does provide a useful, specific and clear indicator of its position on the Internet - but how fast it is growing. Unfortunately, the DNS Survey gives no indication of growth in number of Internet users, only of the Internet hosts it could directly measure.

Implications for South Africa and Africa

The good news for South Africa is that the decline has finally halted, with the January 2000 survey showing us steady in 25th place. The rest of Africa is not catching up, however. The second most connected country on this continent, Egypt, moved up from 77th to 68th position, overtaking the likes of Kuwait and Togo.

Size of population has little relation to ranking. Next after Egypt comes the sparsely populated Botswana, which leaped up from 90th to 77th, followed closely by Zimbabwe, up just one place from 79 to 78.

In the previous survey, Namibia came second of all African countries, but has dropped to fifth, and from overall number 74 to 79. Other tiny countries make up most of the rest of the African top ten, which comprises Morocco, Mauritius, Swaziland, Cote d'Ivoire and Kenya.

Kenya especially is a disappointment, as it was poised in 1996 to become a major Internet force on the continent, with some of the best Web developers and Internet service providers (ISPs) outside of South Africa. However, a failure by the government to deregulate telecommunications has seen it fall far behind, and become almost inconsequential as an online force. The same issue faces most other African countries, where governments tend to cry poverty, and claim that the Internet is irrelevant in the face of their developmental needs.

The reality is that the Internet has become a crucial tool for remaining competitive in a global market, and being competitive is critical if developmental objectives are to be realistic.


12.6 Appendix F: Employment Equity in the Sector (DoL report)

EMPLOYMENT EQUITY REPORT : JUNE 2000

ISETT – Information Systems, Electronics and TelecommunicationsProfile by Occupational Level (Total)

MALE FEMALE

Occupational Level African Coloured Indian White African Coloured Indian White Total

Top Management 28 10 13 373 13 7 4 65 513

Senior Management 62 35 55 984 20 11 9 243 1419

Professionally qualified and experienced specialists and mid-management

707 383 473 6376 227 113 103 2023 10405

Skilled technical and academically qualified workers, junior management, supervisors, foreman and superindentents

3517 2312 2180 16204 1142 743 484 6090 32672

Semi-skilled and discretionary decision making

11043 3802 1773 5769` 3808 2275 1075 7201 36746

Unskilled and defined decision making 4094 1101 123 170 757 358 139 222 6964

Non-permanent employées 709 247 146 838 596 215 66 613 3430

TOTAL 20160 7890 4763 30714 6563 3722 1880 16457 92149

MALE FEMALE

Occupational Level African Coloured Indian White African Coloured Indian White %Black

Top Management 5.46% 1.95% 2.53% 72.71% 2.53% 1.38% 0.78% 12.67% 14.62%

Senior Management 4.37% 2.47% 3.88% 69.34% 1.41% 0.78% 0.63% 17.12% 13.53%

Professionally qualified and experienced specialists and mid-management

6.79% 3.68% 4.55% 61.28%5 2.18% 1.09% 0.99% 19.44% 19.28%


10.76% 7.08% 6.67% 49.60% 3.50% 2.27% 1.48% 18.64% 31.76%

Semi-skilled and discretionary decision making

30.05% 10.35% 4.83% 15.70% 10.36% 6.19% 2.93% 19.60% 64.70%

Unskilled and defined decision making 58.79% 16.81% 1.77% 2.44% 10.87% 5.14% 2.00% 3.19% 94.37%

Non-permanent employées 20.67% 7.20% 4.26% 24.43% 17.38% 6.27% 1.92% 17.87% 57.70%

TOTAL 21.88% 8.56% 5.17% 33.33% 7.12% 4.04% 2.04% 17.88% 48.81%


SUMMARY BY OCCUPATIONAL LEVEL

Occupational Level Black Female Disabled

Top Management 14.62% 17.35% 0.39%

Senior Management 13.53% 19.94% 0.42%

Professionally qualified and experienced specialists and mid-management 19.28% 23.70% 0.37%


31.78% 25.89% 0.39%

Semi-skilled and discretionary decision making 64.70% 39.08% 0.30%

Unskilled and defined decision making 94.37% 21.19% 0.33%

Non-permanent employées 57.70% 43.44% 0.02%

TOTAL 48.81% 31.08% 0.33%

Source: Department of Labour


12.7 Appendix G: Derivation of the number of persons that could be HIV/AIDS positive in the Sector

Three sets of data were used as the assumptions to arrive at the possible number of HIV/AIDS positive workers in the ISETT Sector.

1. The number of employees in the sector as extrapolated from the SARS Levy payment reports. This number (142 598) is used elsewhere in this SSP.

2. The June 2000 report on Employment Equity from the Department of Labour (see Appendix F). This report provides the largest sample yet available for the sector, i.e. 88 719 permanent employees, classified by occupational level and race and gender. The report shows the following percentages per Skill Level:

Highly Skilled: 13.9% = 19821 workers Skilled: 37.8% = 53902 workers Semi-Skilled/Unskilled: 49.3% = 70300 workers

3. The ING Barings report on HIV/AIDS. This report provides, inter alia, data on the number of HIV/AIDS positive occurrences per 100 workers for each of the categories Highly Skilled, Skilled and Semi-skilled/Unskilled workers. The occurrence per category is as follows:

Highly Skilled: 10.2 per 100 Skilled: 15.2 per 100 Semi-Skilled/Unskilled: 19.9 per 100

4. Calculating the data by dividing the total employees for each skill level in 2 above by 100 and multiplying the results by the ratios given in 3 above, the possible numbers of HIV/AIDS positive workers in the ISETT Sector is as follows:

Highly Skilled: 2021Skilled: 8193Semi-Skilled/Unskilled: 13989Total HIV/AIDS positive: 24203

5. Validity and Reliability of this data.

The sample size (Employment Equity) is large enough. Variations between sub-sectors may exist but are unknown from the data. Race and age factors will influence the data, but are unknown. Small company data is excluded and, due to the very large number of SMME's in the sector, could have significant effects.

NB: The following quote from the ING Barings HIV/AIDS report (page 30) is relevant:


"Whilst most of the infections and deaths will occur in unemployed and unskilled or only semi-skilled portion of the population, skilled and highly skilled groups are expected to be notably affected as well, with infection rates peaking well above 20% for the skilled and 10% for the highly skilled groups. The epidemic will thus exacerbate the existing skills shortage within the economy."


12.8 Appendix H: A Glossary of Acronyms

This acronym lists builds on previous work and has been updated to 4th February 2001. Additions, corrections and suggestions are always welcome and should be sent to <[email protected]> The list is maintained as a public service to the ITC community, and will be updated from time to time.

One aspect of the technological age in which we live is the acronym - those collections of initials that represent a form of shorthand to those in the know - but bewildering alphabet soup to those not in the know. Once upon a time, by common (although unwritten) agreement, acronyms were normally limited to three letters, the Three Letter Acronym (or "TLA" to those in the know). However, these days we frequently come across four, five, six or even seven letter acronyms creeping into circulation (e.g. NADEOSA, WIPHOLD) as well as double acronyms (e.g. ISETT SETA). There are even acronyms with imbedded acronyms (e.g. SAVA, SANGONet). Some look tantalising familiar, but even the experts can stumble and hesitate when called upon to expand them. And of course, just to confuse matters even more, some acronyms have multiple meanings, and some are truly international whilst others are specifically local (e.g. IDC). Some acronyms spawn other acronyms (for example, the International Council for Scientific Unions (ICSU) has nearly 30 member organisations, all of which have their own acronym).

Christopher Guy FCSSA<[email protected]>

ABET Adult Basic Education and TrainingACR Africa Competitiveness ReportADSL Asymmetric Digital Subscriber LineAEC Atomic Energy CommissionAISI African Information Society InitiativeAFIS Automated Fingerprint Identification SystemAGM Annual General MeetingAGN Africa Growth NetworkAMB Activity Management BoardATM Automatic Teller Machine, Asynchronous Transfer ModeATF African Telecommunication ForumAOL America On-LineAPC Association for Progressive CommunicationsASP Application Service ProviderATF African Telecommunications ForumATM Asynchronous Transfer Mode; Automatic Teller Machine

B2B Business To BusinessB2C Business To ConsumerBBC British Broadcasting CorporationBEA Business Equipment Association (now ITA)BEATS Business Equipment Association Training Scheme


BEE Black Economic EmpowermentBEMAWU Broadcasting, Electronic Media and Allied Workers UnionBEST Basic Electronic Skills TrainingBICA Building the Information Community in Africa (Conference '99)BITF Black Information Technology ForumBLITEC Black Information Technology Empowerment ConsortiumBPP Broadcasting Policy ProcessBTV Business Television

C2B Customer to BusinessCAD Computer Aided DesignCAGR Compound Annual Growth RateCAM Computer Aided ManufacturingCBO Community Based OrganisationCBT Computer Based TrainingCC Closed CorporationCCMA Commission for Conciliation, Mediation and ArbitrationCD-ROM Compact Disc - Read Only MemoryCECS Community Education Computer SocietyCEPIS Council of European Professional Informatics SocietiesCDMA Code Division Multiple AccessCIDA Canadian International Development AgencyCICT Centre for Information and Communication TechnologiesCITI Cape Information Technology InitiativeCIUEM Informatics Centre at the University Eduardo MondlaneCNE Certified Novell EngineerCNN Cable News NetworkCODATA Committee on Data for Science & TechnologyCOGENE Scientific Committee on Genetic ExperimentationCOMESA Common Market for Eastern and Southern AfricaCOSATU Congress of South African Trade UnionsCOSPAR Committee on Space ResearchCOSTED Committee on Science & Technology in Developing CountriesCPI Consumer Price IndexCRL Commercial Radio Licensing (Department)CRM Customer Relationship ManagementCSA Computer Services AssociationCSD Council for Scientific DevelopmentCSIR Council for Scientific and Industrial ResearchCSSA Computer Society of South AfricaCTS Committee on Teaching of ScienceCUC Computer Users Council (now ITUC)CWU Communication Workers Union

DACST Department of Arts, Culture, Science and TechnologyDBSA Development Bank of South Africa


DDS Digital Data ServiceDECT Digital Enhanced Cordless Telecommunication (Systems)DNS Domain Name SystemDOC Department of CommunicationsDoE Department of EducationDoJ Department of Justice (U.S.)DOL Department Of LabourDSL Digital Subscriber LineDTI Department of Trade and IndustryDVD Digital Versatile Disc

ECASA Electronic Commerce Association of South Africa ECDL European Computer Driving LicenseECDLF European Computer Driving License FoundationECOWAS Economic Community of Western African StatesECSA Engineering Council of South AfricaECU European Currency UnitEIF Electronic Industries FederationELSA Evaluation and Learning System of AcaciaEMC Electromagnetic CompatibilityEMEA Europe, Middle East and AfricaEMI Electromagnetic InterferenceEMLC Eastern Metropolitan Local CouncilEMT Emerging Media TechnologiesERP Enterprise Resource PlanningESKOM Electricity Supply CommissionETB Education Training BoardETIA Electronic and Telecommunications AssociationETQA Education and Training Quality Assurance (body)EU European UnionEXCO Executive Council

FDE Further Diploma in EducationFDM Frequency Division MultiplexingFM Frequency Modulation FPD Frequency Planning DepartmentFRD Foundation for Research and Development (now NRF)FTE Full-Time Equivalent

GA General AssemblyGATS Global Agreements of Trade in ServicesGDP Gross Domestic ProductGEAR Growth Employment And Redistribution (strategy)GEO Geosynchronous Earth Orbit (satellite)GIT Government Information TechnologyGIS Global Information System; Geographical Information System


GMPCS Global Mobile Personal Communication by SatelliteGNP Gross National ProductGPS Global Positioning SystemGSM Group Systeme Mobile (Global System for Mobile communications)GUI Graphical User Interface (typically Microsoft Windows)

HANIS Home Affairs National Identification SystemHBU Historically Black University HCPIL Hague Conference on Private International Law HDI Human Development IndexHDP Historically Disadvantaged Person(s)HEI Higher Education InstitutionHIS Hospital Information System(s)HLHR High Level Human ResourcesHRD Human Research DevelopmentHRF Human Resources FundHSRC Human Sciences Research CouncilHTML Hyper Text Markup Laguage

IAU International Astronomical UnionIBA Independent Broadcasting AuthorityIBRO International Brain Research OrganisationIBN International Biosciences NetworkICA International Cartographic AssociationICANN Internet Corporation for Assigned Names and NumbersICASA Independent Communication Authority of South AfricaICC International Chamber of CommerceICDL International Computer Driving LicenseICDLF International Computer Driving License Foundation (of SA)ICSU International Council for Scientific UnionsICT(s) Information and Communications Technology (Technologies)IDC Industrial Development Corporation (S.A.)

International Data Corporation (U.S)IDL Interactive Distance LearningIDRC International Development Research Centre (Canada)IFIP International Federation for Information ProcessingIGBP International Geosphere-Biosphere ProgrammeIGU International Geographic UnionIIA Internet Initiative for AfricaIIP International Internet ProjectIISA Information Industries South AfricaIJS Integrated Justice SystemIMD Institute for Management and DevelopmentIMF International Monetary FundIMIST Information Management, Information Systems and TechnologyIMU International Mathematical Union


INQUA International Union for Quaternary ResearchIP Internet ProtocolIS Information SystemsISAD (The) Information Society And Development (Conference)ISDN Integrated Services Digital NetworkISETT Information Systems, Electronics and Telecommunications TechnologiesISP Internet Service ProviderISPA Internet Service Providers AssociationIST Information Systems and TechnologyIT Information TechnologyITA Information Technology AssociationITB Industry Training BoardITITB Information Technology Industry Training BoardITNQF Information Technology National Qualifications ForumITU International Telecommunication UnionITUC Information Technology Users CouncilIUBMB International Union of Biochemistry and Molecular BiologyIUBS International Union of Biological SciencesIUCr International Union of CrystallographyIUFoST International Union of Food Science and TechnologyIUFRO International Union of Forestry Research OrganisationsIUGG International Union of Geodesy and GeophysicsIUGS International Union of Geological SciencesIUMS International Union of Microbiological SocietiesIUNS International Union of Nutritional SciencesIUPAC International Union of Pure and Applied ChemistryIUPAP International Union of Pure and Applied PhysicsIUPHAR International Union of PharmacologyIUPS International Union of Physiological Sciences IUPsyS International Union of Psychological SciencesIUTAM International Union of Theoretical and Applied Mechanics

JEDP Joint Economic Development PlanJET Joint Education TrustJIT Just In Time (Manufacturing or Training)JSE Johannesburg Stock Exchange

KWU Kentron Workers Union

LAN Local Area NetworkLEED Local Economic and Employment Development (Programme)LEOS Low Earth Orbit SatelliteLFM Logical Framework MatrixLINK Learning Information Networking and Knowledge (Centre at Wits

University)M-Net Media Network


MAI Multi-lateral Agreement on InvestmentMAN Metropolitan Area NetworkMAP Millenium African ProgrammeMARS Multiple Access Radio SystemMCTI Motorola Cellular Training InstituteMCSE Microsoft Certified Software EngineerMDNS Managed Data Network ServicesMEA Middle East and AfricaMMLC Midrand Metropolitan Local Council MOUS Microsoft Office User SpecialistMPCC Multi-Purpose Community CentreMSC Multimedia Super Corridor (Malaysia); Master of Science

NACI National Advisory Council on InnovationNADEOSA National Association of Distance Education Organisations of SANAIL New Africa Investments LtdNBT Network Based TrainingNCRF National Community Radio ForumNEF National Empowerment FundNGBT Negotiating Groups in Basic TelecommunicationsNGO Non-Governmental OrganisationNITF National Information Technology ForumNQF National Qualifications FrameworkNRF National Research Foundation (successor to FRD and CSD)NSA National Skills AuthorityNSB National Sorghum Breweries; National Standards BodyNSDS National Skills Development StrategyNSF National Science FoundationNSL National State LotteryNSI National System of InnovationNSTET National Science & Education TrustNSTF National Science and Technology ForumNTB National Training Board (superseded by NSA)NTF National Telecommunications ForumNTIS National Transport Identification SystemNTUG National Telecommunications Users GroupNUM National Union of MineworkersNUMSA National Union of Metalworkers of South AfricaNYDSC National Year (2000) Decision Support Centre

OAU Organisation of African UnityOECD Organisation for Economic Co-operation and DevelopmentOLTDE Open Learning Through Distance Education

P&DM Public and Development ManagementPAMR Public Access Mobile RadioPBS Public Broadcast Service


PC Portfolio Committee, Politically Correct, Personal ComputerPCS Personal Communication SystemPDA Personal Digital AssistantPDI Previously Disadvantaged IndividualPIT Public Information TerminalPOP Point Of PresencePOS Point Of SalePOTS Plain Old Telephone ServicePPI Production (Producer) Price IndexPRC Presidential Review CommissionPSDN Public Switched Data NetworkPSTN Public Switched Telecommunications NetworkPSTS Public Switched Telecommunications ServicesPTN Public Telecommunication NetworkPTO Public Telephone OperatorPTT Posts, Telephone and Telegraph (company)

QoS Quality of Service

R Rand (South African unit of currency)RAM Random Access Memory

Review and Modernisation (process) (DoE)RASCOM Regional African Satellite Communications OrganisationRAU Rand Afrikaans UniversityRF Radio FrequencyRINAP Research and Information Network for AfricaRDP Reconstruction and Development ProgrammeRMB Rand Merchant BankROC(I) Return On Capital (Invested)RPL Recognition of Prior Learning

SAA South African AirwaysSAAAC South African Acacia Advisory CommitteeSAB South African BreweriesSABC South African Broadcasting CorporationSABS South African Bureau of StandardsSABTA South African Black Taxi AssociationSACA South African Certification Authority

South African Communications AssociationSACBA South African Call Back AssociationSACLA South African Computer Lecturers AssociationSADC Southern African Development CommunitySADTU South African Democratic Teachers UnionSAFEST South African Foundation for Education, Science and TechnologySAICS South African Institute of Computer Scientists (now SAICSIT)


SAICSIT South African Institute of Computer Scientists & Information Technologists

SAIDE South African Institute for Distance LearningSAIEE South African Institute of Electrical EngineersSAITIS South African Information Technology Industry StrategySALGA South African Local Government AssociationSALSTAF Salaried Staff AssociationSANCB South African National Council for the BlindSANGOCO South African NGO CoalitionSANGONet South African NGO NetworkSAPO South African Post OfficeSAPOA South African Property Owners’ AssociationSAQA South African Qualifications AuthoritySARB South African Reserve BankSARHWU South African Railways and Harbours Workers UnionSARS South African Revenue ServiceSASBO South African Society of Bank Officials ("The Finance Union")SASCON South African Science Communication NetworkSATAWU South African Transport & Allied Workers UnionSATCC South African Transport and Communications CommissionSATRA South African Telecommunication Regulatory AuthoritySAVA South African VANS AssociationSCAR Scientific Committee on Antarctic ResearchSCOPE Scientific Committee on Problems of the EnvironmentSCOSTEP Scientific Committee on Solar-Terrestrial PhysicsSCOR Scientific Committee on Oceanic Research SDF Skills Development FacilitatorSDH Synchronous Digital Hierarchy SDI Spatial Development InitiativeSDS Sector Development StrategySENCOM Sentech Communication ServicesSEP Strategic Equity PartnerSET Secure Electronic Transaction,

Science, Engineering and TechnologySingle Electron Transistor

SETA Sector Education and Training AuthoritySETI Science, Engineering and Technology InstitutionSGB Standards Generating BodySI Systems Integration; Système InternationalSIC Standard Industrial Classification (code)SIG Special Interest GroupSITA State Information Technology AgencySMME's Small, Medium and Micro EnterprisesSMTP Simple Mail Transfer ProtocolSNO Second Network OperatorSPII Support Programme for Industrial Innovation


SPV Special Purpose VehicleSSAG Society of South African GeographersSSL Secure Software LayerSSP Sector Skills PlanSWOT Strengths, Weaknesses, Opportunities, Threats

TAD Telematics for African Development (Consortium)TBT Technology Based TrainingTCP/IP Transmission Communication Protocol/Internet ProtocolTDM Time Division MultiplexingTDMA Time Division Multiple AccessTECLA Technikon Computer Lecturers AssociationTELISA Technical Enhanced Learning Institutes in Southern AfricaTETA Telecommunications Education and Training AssociationTHRIP Technology and Human Resources for Industry ProgrammeTIPTOP Technology Innovation Promotion through the Transfer Of PeopleTLA Three Letter AcronymTMA Telephone Manufacturers AssociationTQMS Total Quality Management SystemTRASA Telecommunications Regulators Association for Southern AfricaTRIPS Trade-Related aspects of Intellectual Property RightsTSA Technikon South AfricaTSDF Telecommunication Skills Development ForumTWR Technikon Witwatersrand

UCT University of Cape TownUEM University of Eduardo Mondlane (Mozambique)UK United KingdomUNCTAD United Nations Conference on Trade And DevelopmentUNDP United Nations Development ProgrammeUNECA United Nations Economic Commission for AfricaUNESCO United Nations Education, Scientific and Cultural OrganisationUNISA University of South AfricaURSI Union Radio Scientifique InternationaleUS Unit StandardUSA Universal Service Agency; United States of AmericaUSAID United States Agency for International DevelopmentUSF Universal Service Fund

VAN Value Added NetworkVANS Value Added Network ServicesVAR Value Added ResellerVOIP Voice Over Internet ProtocolVPN Virtual Private NetworkVSAT Very Small Aperture Terminal


WAN Wide Area NetworkWAP Wireless Application ProtocolWEF World Economic ForumWIPHOLD Women Investment Portfolio Holdings LtdWITSA World Information Technology & Services AllianceWSP Workplace Skills PlanWTO World Trade Organisation

Y2K Year 2000 (The Millennium Problem)


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