The Analysis of The Impact of Digitalisation in South Africa
The Analysis of The Impact of Digitalisation in South Africa
DIGITAL
VALUE
FOR BUSINESS AND
SOCIETY IN SOUTH AFRICA
R5 TRILLION IN VALUE IS AT
STAKE OVER THE NEXT DECADE
FOREWORD
Digital transformation is redefining The value-at-stake framework was initially
industries, making new business models piloted in the UK, Denmark and the Indian
possible and providing businesses with state of Telangana, and presented at
unparalleled opportunities for value annual WEF meetings in Davos in 2016
creation. But unleashing that value and 2017. It has now been applied to
requires relentless effort. New research South Africa.
from Accenture offers South Africa an
For South Africa, the analysis — based
unprecedented opportunity to maximise
on the value-at-stake framework, expert
the benefits of digital.
interviews, local statistics, and other
Understanding how digital technologies inputs — delivers extraordinary insight
create value and how this value can into the value that digital technologies
be captured for government, industry can deliver per industry sector. It is a
and society is key —it can help lay highly granular level of insight never
the groundwork for national digital achieved before and the value at stake is
transformation strategies, guiding efforts immense.
and investments to effectively power
Our analysis reveals that South Africa
economic growth across sectors to the
can unlock over R5 trillion in value
benefit of all.
over the next decade—with value of
Accenture and the World Economic R1.4 trillion created in 2026 alone—by
Forum (WEF) developed a pioneering implementing 96 digital initiatives
value-at-stake framework as part of across nine industries and five
WEF’s multi-year Digital Transformation government services.
Initiative (DTI). The framework measures
We are confident that these findings
the impact of digital technology on
will help initiate broader dialogue on
government services, business and
the impact of digital technologies in
society, and peers 10 years into the future
South Africa and—importantly—inspire
to quantify the value these technologies
the collaborative action needed by
can create, effectively providing a map
stakeholders in South Africa to define
and a compass to help stakeholders align
effective digital policies and strategies,
and optimise their efforts to realise this
and guide investment in digital
value.
transformation to deliver the greatest
benefits for all.
1
THE RISING
IMPORTANCE
OF DIGITAL
TECHNOLOGIES AND
DIGITAL VALUE TO
SOCIETY
South Africa is a country facing multiple challenges, including high unemployment
and declining productivity. There is growing optimism, however, as the arrival of
the 4th Industrial Revolution coincides with a renewal of political will to address the
fundamental socio-economic and development issues facing the country with the
help of digital technologies. There is an incredible opportunity to do so.
2
In South Africa, digital technologies
can generate more than R5 trillion in
THE ACCENTURE AND WEF value for industry and society over
VALUE-AT-STAKE FRAMEWORK the next decade through the use of
digital technologies in key industry
sectors, including agriculture, public
Value at Stake and Digital Value to Society
infrastructure and administration,
The Accenture and the World Economic Forum financial services and manufacturing.
(WEF) value-at-stake framework assesses the
This insight comes from a South
impact of digital initiatives—from driverless cars
Africa-specific analysis conducted by
and predictive analytics to drones and remote
Accenture using the Accenture and
healthcare—on industries, consumers, society
World Economic Forum (WEF) value-at-
and the environment over the next decade (2017-
stake framework.
2026).
The framework measures the impact
In the assessment of industries, the framework
that digital technologies, such as
integrates all segments of an industry's value
analytics, blockchain, virtual reality, and
chain, capturing approximately 80 percent
artificial intelligence (AI), may have on
of revenues and profits. It considers the total
South Africa‘s industries and society
addressable market and the adoption or
(environment, consumers, labour and
penetration rates of new technologies over
government). What makes this study
time, and is based on research, industry reports,
unique is that it not only focusses on the
existing use cases and expert interviews.
financial value that is created but also
The framework also quantifies Digital Value measures the digital value to society
to Society (DVS) by aggregating the key (DVS).
performance indicators that measure the impact
Digital technology can positively
of digitalisation on health and safety, employment,
impact people’s lives by improving
the environment, labour and consumers.
education and health outcomes,
Together, value-at-stake and DVS provide an creating employment opportunities and
evidence-based framework to encourage providing better citizen services. DVS
collaboration between enterprises and policy- measures the aggregated impact of
makers to unlock the societal benefits of digital technologies on health, safety,
digitalisation. the environment, and other factors.
TECHNOLOGIES CAN
SOCIETY AND
ENVIRONMENT
LIVES CARBON LIFE
SAVED EMISSIONS EXPECTANCY
CONSUMER
GENERATE MORE
THAN R5 TRILLION IN
BENEFITS
TIME COST SAVING
SAVINGS ON CONSUMPTION
INDUSTRY
3
THE VALUE FOR SOUTH USE OF DIGITAL
AFRICA TECHNOLOGIES IN
GOVERNMENT SERVICES
Just over 51 percent of the total value CAN ADD JUST OVER R2
at stake is expected to be created for
society through digital transformation
TRILLION IN VALUE.
across nine industry sectors and five
government services. This includes ACROSS INDUSTRY
the creation of approximately four
million jobs, which could reduce
SECTORS, DIGITAL
unemployment over the next decade. TECHNOLOGIES CAN ADD
The other 49 percent of the value at MORE THAN R3 TRILLION.
stake accrues to industry as a result of
new products and services, as well as the The value at stake from digital
digitalisation of public services (i.e., the transformation across five government
increased efficiency and effectiveness of services is just over R2 trillion.
government services which results from Digitalisation of public infrastructure
higher adoption of digital initiatives by maintenance, public administration and
government entities). healthcare alone can add over R1.2 trillion
to society (environment, government
and citizens) over the next decade.
Digital transformation of South Africa’s
government services is likely to create
the highest value for society through its
impact on economic activity, productivity
and service delivery.
4
Digital transformation of nine industry sectors could deliver over R3.6 trillion, the
majority of which (R2.5 trillion) will accrue to industry. Transformation across the
financial services, agriculture and manufacturing sectors presents the highest potential.
Media 59 34 93
Each of these technologies brings new capabilities and adds enormous value but
it is the combined capabilities of these and other technologies that drive true
transformation.
5
COMBINATORIAL EFFECT THE COST OF
OF TECHNOLOGY ADVANCED
The capability of technologies working
TECHNOLOGIES IS
in tandem far exceeds the capabilities PLUMMETING.
of each deployed separately. These
underlying combinatorial effects are CHANGE AND
impacting businesses and wider society:
PROGRESS ARE
In the agricultural sector, for example, ACCELERATING.
the combined use of autonomous
vehicles, drones and sensors enables NEW APPLICATIONS
precision agriculture, improving use of
resources and increasing yields. This is ARE EMERGING AND
revolutionising this sector. THERE ARE ENDLESS
In the manufacturing sector, the OPPORTUNITIES TO
implementation of multiple advanced
technologies, such as IoT and AI,
COMBINE THEM IN
throughout the value chain will improve INNOVATIVE WAYS.
responsiveness to demand and enable
the introduction of many value-adding
services, effectively turning product
companies into service companies.
Public Cloud
Mainstream COMBINATORIAL
EFFECT OF
TECHNOLOGY
1994: 2008:
Amazon iPhone
1991:
Public 2006:
Internet AWS
1990: 2005:
System/390 Web 2.0
2010:
Self
Driving
Car
1977: PC 1999: Salesforce.com
1964: System/360
1972: SAP 1997: Big Data
Time
Server/Host 1969: ARPANET 1999: IoT, M2M 2007: IBM Deep Blue
Main frame Web 1.0. E-Commerce Big Data, Analytics, Visualisation Artificial Intelligence
Client Server and PCs Web 2.0, Cloud , Mobile IoT and Smart Machines Quantum Computing
6
CAN DIGITAL HELP
TRANSFORM SOCIETIES?
7
India – Spreading the JAM
8
“IT IS JUST NOT ENOUGH
TO UNDERSTAND IT. WE ALL
HAVE TO EMBRACE THE 4TH
INDUSTRIAL REVOLUTION –
WE HAVE TO WORK TOGETHER
TO JOINTLY EXPLOIT NEW
TECHNOLOGIES FOR THE
FUTURE. DESPITE DIFFERENT
OPINIONS, THE COMMON
INTEREST SHOULD BE FOR THE
SAKE OF THE COUNTRY, TO
CREATE STRONG, INCLUSIVE,
AND SUSTAINABLE GROWTH.”
PROF KLAUS SCHWAB,
Founder and executive chairman of the
World Economic Forum (WEF), CSIR
symposium, South Africa, 2018
9
THREE DIGITAL TECHNOLOGIES—IOT, AI AND
PLATFORMS—WILL HELP SOUTH AFRICA
REALISE 68 PERCENT OF THE TOTAL VALUE
AT STAKE.
TECHNOLOGIES WITH how citizens interact with governments.
As AI matures, it can propel economic
THE HIGHEST POTENTIAL growth and serve as a powerful remedy
for stagnant productivity and labour
Accenture's reserach indicates that the shortages. A recent Accenture and GIBS
R5 trillion in value that can be created study indicates that by embedding AI,
for the South African economy through South Africa can increase its annual
use of digital technologies will primarily economic growth rate by one percentage
be realised through the application of 96 point by 2035, potentially doubling
digital initiatives across nine industries the size of the country’s economy five
and five government sectors. These years earlier.5 However, AI will demand
initiatives will rely heavily on a few key new skills, the redefinition of jobs and
digital technologies. Internet of Things a recalibration of business culture and
(IoT) and connected devices have leadership.
the highest potential to deliver value.
Artificial intelligence (AI), supported by Platform ecosystems can create a
new skills and a recalibration of business foundation for value creation by enabling
culture, and platforms can also drive new business models and strategies
substantial value creation. which will profoundly change the way
companies engage with customers.
Of these technologies, the value Platforms can grow exponentially as a
potential of IoT is likely to be the result of network effects which allow for
highest over the next decade due to the benefits of platforms to be magnified.
the combined effect of the increasing Recent Accenture research indicates that
affordability of smart devices and the there is still substantial room for South
widespread adoption of these tools by Africa to capitalise on the opportunity
individuals and companies. IoT creates presented by the platform economy.6
value for companies through cost savings
and efficiency improvements, and helps Big data and analytics will underpin
consumers achieve higher productivity digital transformation. Collecting data,
levels. However, for IoT to be successful, making sense of it and using advanced
South Africa must invest in the right analytics to make better decisions
infrastructure, enhancing skills and and optimise operations are just the
capabilities, and ensuring the security beginning. Big data and analytics will
aspects of IoT use cases. drive Industry X.0, the integration of
multiple waves of digital technology into
AI, combined with uniquely human industrial processes to deliver connected
capabilities, will deliver more than just and smart products and drive industrial
efficiency—it will add value and drive consumerism—which will completely
business growth. Accenture calls this reinvent industries. The change has
combination of machine and human already begun.
ingenuity ‘applied intelligence’. It will
revolutionise how work is done, how
customers interact with businesses and
10
SO, WHERE CAN THESE
TECHNOLOGIES BE
APPLIED TO DELIVER
VALUE?
11
COMBINING VALUE
TO INDUSTRY WITH
VALUE TO SOCIETY
Our analysis has focused on a specific set services. When viewed together with the
of South African industries and a narrow value created for industry, an interesting
set of indicators (jobs, carbon emissions, picture begins to emerge: market forces
lives saved and consumer benefits). and social forces work together to drive
These indicators serve as a proxy to those initiatives that show high value
begin quantifying the value to society potential for industry as well as high
from digital transformation, but they also contribution to societal value. These
lay the foundations for a new platform for initiatives require little intervention by
public-private sector dialogue. government or regulators to realise
their potential. However, initiatives that
Our study reveals that over 51 percent
deliver high value to society but relatively
or R2.9 trillion of value could be created
little value to industry may need to be
for society through digitalisation within
catalysed by carefully crafted incentives
key industry sectors and government
or approaches.
CASE IN POINT
12
FOR SOUTH AFRICA,
R5 TRILLION IN VALUE
CAN BE GENERATED BY
IMPLEMENTING KEY
DIGITAL INITIATIVES.
MARKET FORCES AND
SOCIAL FORCES WILL
WORK TOGETHER TO
DRIVE THOSE INITIATIVES
THAT SHOW HIGH
VALUE POTENTIAL FOR
INDUSTRY AS WELL AS
FOR SOCIETY.
13
It is clear that the value to society will a positive outcome for South African
not always be realised automatically; society at large.
considerable work may be required to
By working together to drive digital
maximise the potential of some digital
transformation now, both government
technologies.
and business leaders can better
This will require collaboration between prepare to participate in the next era of
multiple stakeholders. In some instances, digitalisation. To drive value for society
public-private partnerships may prove and industry, business and government
useful. In others, specific incentives leaders need to consider key questions
or policy changes by government can about the value of digitalisation.
help align multiple partners to produce
USINESS LEADERS
B
Could digital
initiatives also provide
leverage for a useful
partnership or help us
achieve incentives
Are we able to that would add value How might we
effectively measure to, or help grow our incubate and nurture
and track the impact business? digital initiatives that
of our digital initiatives could deliver high
on the socio-economic levels of value to
fabric of South Africa? society and to our
business in the future?
14
RECOM
MENDATIONS
To realise the value at stake from digital technologies and make digital transformation
a success in South Africa, policy makers, industry bodies and business need to
work together. Across all sectors, six common success factors have emerged: there
is a need to address physical and digital infrastructure, digital skills and training,
transparency, regulation and policy, public private partnerships and capital spending.
15
• Ubiquitous and unified access to physical
connectivity (ports, roads, airports, etc.) and
1 PHYSICAL
mobile connectivity (e.g., 4G, 5G) is imperative.
& DIGITAL • Develop interoperable systems that enable
INFRASTRUCTURE seamless interaction for all participants,
eliminating process inefficiencies.
17
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solutions in strategy, consulting, digital, technology
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DotCom/Documents/Local/ru-ru/PDF/Accenture-Digital-Transformation.pdf
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