By Suraya Hamdulay
What does 5G mean from a business leadership perspective and will society at large benefit in real and tangible ways? Can the rollout of 5G technology contribute to the deepening of the developmental state in South Africa? And what are the strategic partnerships that can enhance the possibility of a developmentally-driven technology expansion?
Suraya Hamdulay writes that business leaders are leaders in society as businesses are not separate to the societies in which they operate. It is important for business that its leaders are close to and aware of what is happening on the ground at all times. South Africa is plagued by the triple scourge of poverty, unemployment and inequality and these social ills have deepened due to COVID.
It is now a well-known fact that during COVID, ICT companies globally were the biggest winners and the most to benefit from global lockdowns and this put sharply under the spotlight the transformative power of technology. In my opinion there is no greater tool for development than technology- but technology as an enabler must be seen beyond “corporate social investment” but rather as the opportunity to find revenue generating levers for corporates in their quest to drive innovation and increase their bottom line. It is in embedding the social and environmental imperatives of the triple bottom line that businesses will see the biggest growth. But this requires a paradigm shift, where the thinking moves from a compliance mindset to an empowerment mindset. In the local context it requires BBBEE strategy that is inextricably linked to corporate growth strategy – because properly leveraged, the 7 pillars of transformation can fund business growth initiatives if it is not considered a compliance expense.
In respect of Enterprise and supplier development the roll out of 5G will call a greater need for diversification of supply chains and real empowerment of SMMEs to take advantage of the benefits of increased infrastructure investment and new revenue stream opportunities. ICT companies will have to look deliberately at the downstream opportunities for SMMEs. They will need to promote real empowerment and programmes that give SMMEs access to Finance, business support and development, skills transfer, and the creation of micro ecosystems that support innovation and the creation of new products and services supported by ESD funding. The only real way to ensure that the benefits of increased investment and spending in 5G accrue to the base of pyramid is to ensure that ICT companies look to ways to design ESD programs that support their own business growth strategies– in addition to supporting government’s objective of 30% spend on black and woman and youth businesses, it means designing proactive strategies that ensure meaningful preferential procurement and enterprise development. One major hurdle that keeps SMMEs out of supplier databases in the ICT sector is the sheer cost of governance compliance- especially health and safety requirements. Corporates must find new ways to approach the cost of SMME compliance and help them get over the hurdle and into meaningful, sustainable economic opportunities.
In respect of Skills development- ICT companies spend hundreds of millions of Rands annually on skills development however, few are able to realize this spend back into their business or the sector in a meaningful way (e.g. computer courses that don’t prepare youth for employability). The lost opportunity is in not designing future skills pipelines for the business first and then spending money on skills programs that address the immediate need of organizations. Although this is slowing gaining traction in some corporates, in many cases it is still not linked to corporate growth strategies – so whether it is Coding, Robotics, AI, or data analytics- corporates must know what their “skills of the future” pipeline looks like and fund the programs that support not only their growth strategy but sector growth strategies more widely. Current skills programmes include the set-up of computer labs, and donating laptops for youth, a tactic has not changed in the last 12 years. Corporates need to understand that giving access to 5G or even to the technology tools is meaningless without access to training, skills and access to downstream opportunities to youth to either become employable with these skills, or to become entrepreneurs.
In respect of Corporate Social Investment spend and the importance of partnerships, ICT companies are urged to focus on STEM and other programs that can be supported through partnerships. ICT companies are encouraged to partner other large ICT companies and their large enterprise customers to identify common areas of investment in order to increase and deepen the impact of social spending. One way of doing this is to segment the growth areas into industry verticals – eg. Education, healthcare and financial inclusion where investment and tracking of real social impact can unlock exponential development – for example access to finance and financial instruments for base of the pyramid customers that encourage banking and small lending instruments can support micro-enterprises in local communities. The use of mobile money and other banking instruments enabled by smart mobile technology makes for the perfect partnership between Telco’s, handset providers and banks.
Today telcos, banks and insurers are all playing in the same space and competing for a share of wallet- a handset provider for example could design a new partnership model that could create opportunities to increase smart phone/handset adoption and by implication encourage greater use of 5G technology. The opportunity to leapfrog technology especially in rural and underserved areas to stimulate local economic activity is great. For this to be successful though, it will require disruptive thinking and the design of new business models that are not only “outside of the box” but will require the creation of “new boxes”.
If we proceed from the premise that 5G presents an opportunity for the ICT sector to benefit immensely and add value to its shareholders, whilst also contributing to the growth of the economy and society at large, we need to carefully consider the partnerships in which we will engage in this rollout. It might be prudent to link the rollout of 5G and other advanced technology to the broader process of building the economies, resilience and innovation amongst members of the BRICS bloc.
Apart from the fact that China’s Huawei is a leader in 5G technology development and infrastructure rollout, the similarities in the development path between SA and China, as well as collaboration on other large infrastructure projects that rely on smart and fast communications technology present a case to explore how this partnership can be leveraged to place South Africa on the path to an inclusive and mutually-beneficial path to 5G integration.
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