The latest Accenture and the Gordon Institute of Business Science (GIBS) whitepaper released on 1 November 2017, has revealed that although South Africa’s digital economy makes it a standout among its emerging market peers, the country’s digital adoption has not yet translated into industrial growth.
According to the report, South Africa ranks ahead of India, Brazil, and Russia on digital competitiveness based on its strengths in areas such as technology skills, research and development expenditure, access to capital, regulatory frameworks, innovation ecosystems and ICT exports.
The country now needs to embrace digital technologies to reinvent how its industrial sector operates and re-ignite economic growth.
The report surveyed senior executives from leading South African companies in manufacturing and production sectors, who formed part of the larger global survey group of 1,000 decision makers spanning over 20 countries.
“Our study shows that decision makers are hungry for digital adoption,” says Yusof Seedat, Accenture Research Director.
“This potent mix of digital maturity and executive desire isn’t delivering expected results in terms of economic growth.”
“What is most troubling is the performance of South Africa’s manufacturing sector, where growth has been flat for a decade and negative for three consecutive quarters, falling an average of 3.3% beginning the third quarter of 2016, and expanded marginally (by 1.5%) in Q2 of 2017. This stagnation has both economic and policy implications, given the role of manufacturing in the government’s plans for economic transformation and job creation,” says Seedat.
South African companies also tend to mimic digital strategies of large industrial nations which prevents them from contextualising digital strategies to their own industrial reality and as a result, often fail to customise their offerings to meet rapidly changing customer expectations.
Moving forward, the report shows that for South African companies to generate the improvements that will enable them to leapfrog to digital leadership, companies must reinvent their operating models completely and rethink production and value chains.
“Companies must reimagine and rebuild their businesses as smart, connected, living and learning entities to digitally reinvent their industry.” highlights Seedat.