Start-up Role in the Digital South African Economy

Start-up Role in the Digital South African Economy

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Video on The Role of Start-Ups in the Digital Economy

South Africa is viewed as a “Break Out Country”

Which means – we have a the potential to develop a strong digital economy.

Digital Evolution Index

In advanced economies, the efforts of innovative entrepreneurs have driven astounding growth in Internet usage and impact over the past 20 years.

Digital entrepreneurship in developing markets has received far

less attention but has major implications for economic growth and social progress.

The role of the digital economy in South Africa is to:

Create an ecosystem that allows individuals, enterprises, and governments to play a bigger role in development and growth, through job creation

Increases in Internet use and infrastructure improvements

Create new business models, from successful adaptations of popular web applications from developed countries to e-commerce and public-policy platforms, entrepreneurs have brought new services, expanded products.

Case Studies

An innovative Digital Publishing tool, cost-effective digital publishing solution that is easy to use and accessible to publishers globally. It allows publishers to take their ready-for-print file and distribute this via mobile applications.

Publishers, corporates, academic institutions, video producers and anyone who is looking to distribute their content.

Self-Funded

Future: Pay as you go reading is next because it allows users to only pay for what chapter they are reading. We also want to increase more collaborative reading especially in the academic space as well as social reading and recommendations.

An in-store device that interacts with people’s cellphones when they walk into the store.A technology that allows stores to have relevant conversations with their in-store customers.

Publishers, corporates, academic institutions, video producers and anyone who is looking to distribute their content.

Self-Funded

Future: Pay as you go reading is next because it allows users to only pay for what chapter they are reading. We also want to increase more collaborative reading especially in the academic space as well as social reading and recommendations.

In Kenya - the technology nonprofit Ushahidi has developed a

device called the BRCK, described as a “backup generator for the Internet.”

It aims to address the challenges of making connectivity more reliable—even when the power is out. The project’s aim is to keep users connected with minimal effort by moving seamlessly between wired ethernet, Wi-Fi, and mobile-data zones and switching to a robust built-in battery automatically whenever the power grid goes down

In India - online ticket-sales sites such as Redbus.in

offer customers the option of cash payment upon physical delivery of online purchases as an alternative to

using credit cards in a system perceived to be insecure.

We see similar innovation around logistical bottlenecks. For example, one of India’s largest online retail players,

Flipkart.com, has developed its own logistics

operations to save on courier commission charges and reduce delivery time in smaller cities.

In Mozambique, meanwhile, a start-up called moWoza uses

text messaging and a smartphone app to connect informal traders with available taxi drivers who can deliver parcels from wholesalers, creating a faster, mobile-based supply chain.

The company aims to make cross-border trade more formal and efficient, positioning itself as a major m-commerce player that can provide tracking and delivery services

BottlenecksPolicy:There is nothing in government policy that makes tech start-up’s easy. We have no tech-development zones where bandwidth is free to take some of the load off tech start-up’s. We have no aggressive policies that allow us to capitalize on global trends.

Bottlenecks Skills: Tech companies are built by people, not machines. By definition, these people are skilled in the sciences, the very weakest of all our school syllabuses. This means we are not seeing people secure tertiary education in the sciences and engineering faculties at nearly the levels that we require to build a vibrant tech sector. The scarcity in skills sees many early stage businesses not being able to afford the skills that they need to get going.

BottlenecksLow customer confidence in payment security:This is because some customers are unable to believe that they are giving their money to the right business etc. Customers are concerned about purchasing from the internet as they have to give out vital and most importantly heir personal details that can lead to other problems such as theft.

BottlenecksSupply chain challenges: The nature and characteristics of channels also depends on the level of economic development. Research has suggested that channels in developed countries are likely to have larger wholesalers, larger retailers, and fewer levels in the channel when compared to channels in less developed countries (Olson & Granzin, 1992).

Distribution channels South Africa can be characterized by unorganized retailing and wholesaling; smaller, independent retailers and wholesalers; more levels in the distribution chain; and poor implementation of laws and regulations.

Solutions

Public Policy changes in the areas of education, infrastructure, entrepreneurship, trade, immigration, and research.

Regulator necessary for consumer protection, many instances of irregular activities occur online, and difficult to trace.

Solutions

Developing necessary skills; accelerating start-ups, and

ensuring South African Developers are positioned to capitalise on Africa’s app economy opportunities would be best achieved through a concerted, collaborative effort by enterprises, incubators and accelerators, government, academia and developers themselves.

Tshimologong ICT business incubation precinct now being developed in Johannesburg, where stakeholders such as the Department of Trade and Industry, the University of the Witwatersrand, and major ICT companies are collaborating to

Boost ICT innovation in Gauteng.

IBM alone will invest R700-million on an ICT research lab as part of this project.

Designing user experience is an art, and the demand for

people skilled at building intuitive, user-friendly interfaces.

In addition, successfully taking new applications to market will

require business acumen so there will be a growing

demand for business and management skills in the developer ecosystem

Solutions

Delivery Network, to increase distribution and product delivery, partnering with various independent drivers. The

ability to locate a driver nearby will Reduce Direct Costs, in comparison with private companies and more reliable than public postal delivery services.

In addition, providing Innovative Payment Options which will encourage consumer confidence levels.