Creating jobs isn’t just expensive, it’s getting more expensive. Cloud computing may offer one way of reducing the cost, meaning money allocated to job creation could go further and reduce unemployment faster in the process.

This is the view of economist Mike Schüssler, founder of Economists.co.za, who was speaking at a cloud computing roundtable discussion hosted by the Free Market Foundation in Johannesburg last week.

“The cost of creating the average job has increased to R270 000 in real terms,” says Schüssler. “That means we need R22bn to create 80 000 jobs.”

Schüssler has co-authored a report called “The economic impact of cloud computing in SA” with Jasson Urbach, an economist at the Free Market Foundation. The report reckons that for every 80 000 jobs created, cloud computing could add at least 1 000 to that total without incurring additional costs.

He says one of the big advantages cloud computing affords businesses is how it helps achieve “economies of scale, or the right scales”. He says companies can spend less on infrastructure and can pay for precisely the services they need rather than “over catering”.

Increased broadband access and the resultant access to cloud-based services will also make SA more attractive as a business process outsourcing destination, creating call-centre jobs in the process.

The report says there is a clear correlation between Internet penetration and GDP growth. This was demonstrated in a study by South Korea’s Myongji University in 2003, and in a more recent study by the University of Munich in 2009.

The report says SA doesn’t only suffer from poor broadband penetration but also from a lack of access to computers, with only 32,7% of the population having used a computer in the past 12 months. The report suggests smartphones rather than PCs will drive Internet access for local users.

Interestingly, according to the latest Amps figures, South Africans accessed the Internet more from home than from anywhere else, with the primary reason being search, followed by e-mail, social media and research.

According to research company BMI-TechKnowledge, the SA hardware, software and services markets all grew between 2009 and 2010.

Brad Smith, Microsoft’s general counsel and senior vice president for legal and corporate affairs, who also spoke at the Free Market Foundation event, says having the right regulatory and legal frameworks in place is essential to promoting Internet access and making cloud computing a viable proposition.

“The most important thing a government can do is help to spread broadband technology,” he says. “Your own server room means guaranteed in-house connectivity, but for the cloud to work you need to see a more rapid spread of broadband and need to support it with the right kind of privacy protection, security protection and intellectual property protection.”

Schüssler says SA doesn’t yet have enough people online to feel fully the benefits of cloud computing, but that “those savings will come in time. SA hasn’t missed the boat, but it isn’t on it yet either.”

He says there is hope for SA, particularly as it has proven such a “good early adopter of technology”. He says SA enjoys almost 100% mobile phone penetration and although the country isn’t improving Internet access as quickly as other African countries like Algeria there has nevertheless been a marked improvement in the past decade. — Craig Wilson, TechCentral