SA’s Internet economy contributes 2% to SA’s gross domestic product and this figure is rising by about 0,1 percentage points each year, meaning it may reach 2,5% by 2016. The total value of SA’s Internet economy in 2011 was R59bn.
This is according to a report titled “Internet Matters: The Silent Engine of the SA Economy”, which was commissioned by Google SA and produced by consulting firm World Wide Worx.
The report examined Internet access and presence, e-commerce, online advertising, private expenditure on data infrastructure and government’s spending on broadband infrastructure and found combined expenditure amounted to R59bn last year.
R24,9bn of this came from network data revenue for the mobile operators as well as Telkom and Neotel. Internet service providers accounted for R4,3bn of the total figure. Combined, these two figures account for half of SA’s Internet economy. A further R16,8bn was spent on infrastructure investment during 2011.
Online retail expenditure in SA in 2011 was R2,6bn, with online air tickets racking up R9bn. According to the report, e-commerce in SA is growing at a rate of 30%/year. This is expected to grow further as an increasing number of retailers begin to offer their wares and services online.
Arthur Goldstuck, MD of World Wide Worx, says simply having a website can make an enormous difference to small and medium-sized enterprises (SMEs). Of the 650 000 registered SMEs in the country, 63% have websites.
“One in five SMEs say they could not exist without a website,” says Goldstuck. He says SMEs account for roughly 7,8m jobs. He adds that this does not include large corporate entities that rely on the ability to be online to conduct their business.
Goldstuck says the falling cost and increasing penetration of smartphones is getting more people online and this is also set to drive the Internet economy.
According to the report, mobile networks report 63m active accounts, or 126% population penetration. Goldstuck says his research suggests “true individual penetration” is around 80% and means 40m consumers are using mobile phones in SA.
Though the Internet economy is growing, Goldstruck says it takes new Internet users about five years to become active participants. Also, the growth of it is healthy in relation to overall GDP but there is the potential to grow the sector more swiftly by removing “regulatory logjams”, which should in turn increase employment, he says.
The report includes more than two dozen specific recommendations for government and policy makers, the communications industry, SMEs and entrepreneurs, and even for ordinary individuals.
Proposals include treating licensing with greater urgency, lowering the cost of devices and accessories through taxes and duties, removing obstacles like gaining rights of way for new infrastructure, and providing more incentives for research and development, SMEs and entrepreneurs while also reducing red tape. — (c) 2012 NewsCentral Media
