Input to the Gauteng Government Strategy Workshop -Thursday 28th January 2016

Input to the Gauteng Government Strategy Workshop -Thursday 28th January 2016

Good afternoon everyone

It is indeed a great honour for me to address this very important gathering.

The title of this paper is titled ‘The Internet Economy- where are we and where are we going”

The Internet is becoming the driver of today’s economic growth. The Internet mainly drives Stock trading, currency markets, electronic commerce and trade, economic and political news. The Internet is a global platform and it should be treated as such. All future micro and macro trade and commerce will happen on the Internet. As a country we need to build the Internet as a platform. This platform must be ubiquitous and available all the time.

This week on Tuesday, 26 January The Portfolio Committee on Communications convened industry stakeholders to address the issue of Over The Top (OTT). On Wednesday this week the same committee convened another hearing focusing on issues related to broadband, which I am told, unfortunately did not happen.  Both these issues confront our society today. As we all know modern knowledge based economy cannot exist without broadband, nor can smart cities, e-commerce or e-government be built without broadband. In fact we are very late to be discussing these policies now, these should have been implemented a long time ago. The question that we need to address is how do we catch-up?

Other middle-income countries and other countries in SADC, COMESA and ECOWAS are ahead of us in this regard. The lack of these policies is causing slowdown in investment.

Given our present economic state as a country, The state does not have resources or money to build this modern knowledge economy infrastructure.  Broadband is being built and will continue to be rolled out mainly by private capital and not state capital. What investors are looking for is a clear policy, legislative and enabling environment.  Our economic outlook is not inspiring. While this is a wave across emerging markets, there are however, domestic issues that require addressing. The country’s balance sheet has been stretched beyond its elasticity and strength. It is because of this reality that, local government authorities cannot become telecommunications or Internet companies. This game is complex and it requires private sector investments. The notion that the state will invest in Internet is causing problems in the market, because the state would want to write laws and policies that protect those investments at the expense of private capital.

The state should create an enabling environment rather than to want to be an operator, investor and player in this game. This environment changes very fast. The way to sustain knowledge and skill in one’s business is to provide equity incentive and other creative models if you want to attract and retain the best people. The state should support research and development and incubation and acceleration business programs. The tech start-up eco-systems will definitely need government support. The nature of this support must be well defined.

The state should provide incentives for private capital to go to remote and rural areas. How far can state capital go as the industry is building Internet of things, industrial Internet and all these fast changing technologies? There is a need to discuss the issue of state versus private capital in the digital economy. What should be the role of each sector? Similarly what is the role of the state in connected cars, smart cities and these new tech based developments? If the state is going to compete with private sector there is bound to be conflict. There are more than three court cases today where local government are in conflict with private sector in building optic fiber networks. This is not an ideological statement but facts based on our country’s income statement and balance sheet. One message I can give here is that, you cannot run an internet company without international, regional and local peering and neither can you run it without Datacenter, cloud computing, virtualization and collaborating with OTT players.

I would like to thank the Chairperson of the committee for such a foresight. The issue of OTT is currently being debated in all parts of the world. Similarly with Net Neutrality and other topical issues of today.

In this meeting I thought I must share with you these issues that I would categorise in what I would call current affairs in the Internet and technology sector or eco system. I will merely flag these issues. The objective is not to look or suggest answers but share with the audience the complexity of today with regards to the Internet and or ICTs.

I will start with the conclusion.

I understand there are a lot of institutions that have been established in this field in the last 20 years or so. However, none of them conduct Internet and Internet governance research. My conclusion is that we need a joint public private sector group or virtual multi-disciplinary organization that will participate in these global discussions or dialogue. This multi stakeholder group will assist with Internet research looking at the intersection of law, economics and commerce and trade, technology, geopolitics and social issues.

Information has been there even before the first industrial revolution. The printing press started this process. The utilization of paper from trees as means to transfer information changed most sectors of the economy including religion. What is different today is the speed at which information is transferred [almost instantaneously]. Similarly the ability to process huge volumes of data is changing the way business and governance is conducted. The use of processor technology such as below 10 nanometre CMOS chip sets, molecular electronics, quantum tunnelling, and the potential of Graphene and recently discovered materials will change not only the economy but life as we know it today.

Software platforms, cloud computing and other related technologies are making it easy for even the developing or emerging markets to enter this domain not ten years later after the developed countries. The critical path though is to choose where you can make the most impact and where you can derive the most benefit for your country or society. These choices are not easy to make.

Policy and lawmakers should try putting a figure on the pulse of entrepreneurs who are driving these developments. There is a big debate about the role of Unicorns in shaping the future of our world. Umber, Xiaomi, Airbnb, Palantir, Snap Chat, Didi Kuaidi, Flip Kart, Space X, Pintrest, and Drop Box. These start-ups have changed not only the tech industry but also the global economy.

Some and not others recognize the role of tech-entrepreneurs in shaping the world economy. In my view if you want to play a role in the future this is the community you should bring closer to your strategy board.

What is to be done?

I would like to repeat what I said in parliament earlier this week. Firstly we need to understand the Internet eco system. How does the Internet work, who are the players on the Internet, and how best to integrate your economy to the Internet. One of the most topical widely recognised issue today in the Internet governance model is the multi stakeholder model. Unless we support this model we will find it difficult to attract the types of unicorns mentioned above. We will also find it difficult to attract foreign direct investments (FDI) in the tech sector. If the Gauteng economic strategy is silent on this, we will chase away OTT and tech entrepreneurs.

In order to attract investors in software, Datacenters, cloud computing and other important areas that are driving the modern knowledge economy, we need clear Internet policies that are friendly to these investors. The Gauteng government should meet with the national government to iron out these Internet related policy and governance issues.

Today it is faster to move your data from a country. In fact it is faster than currency movements and trading. People will keep their data anywhere in the world, where they think it is safer and cannot be impacted by policies and regulations.

Let me give you an example, those who do not have G-mail, Hotmail, never used Google or twitter or What’s up must show their hands. How can you control this data, it is all in the cloud. You cannot regulate it or control it.

The Internet is the Internet. It belongs to all of us. There is stakeholder above another. Companies on the Internet operate in a borderless universe. No one can create borders on the Internet. Many have tried before and they never succeeded.

We need to create an enabling environment for Internet companies to thrive, prosper and become global players and join the unicorns.

We need to develop policies and enabling environment for entrepreneurs to start using drones and UAVs. These will help in transportation, logistics, safety and many more applications. Transporting medicine, blood samples from remote areas and or rural areas can easily be put on drones or UAVs. Urban traffic congestion can be reduced through the use of drones. The Gauteng public and private sector community must jointly approach Civil Aviation Authority and ICASA to accelerate the policy and regulatory process.

The Internet should be affordable to all users both in urban and rural areas. One way to make Internet affordable is through wide deployment of Wifi. Municipalities and public institutions are key to this strategy. All cars will have Wi-Fi. Let me share with you one of the most important aspects that need unblocking through local government by laws. Street light poles are very important to driverless cars. The poles are used to deploy sensors and Wi-Fi access points. The Internet of things (IoT) will need the state and private sector to agree. Like in the early days of domain name where we experienced squatting. There were people who bought domain names in order to resell them to the actual owners. This was stopped. There are people today who approach municipalities and they buy rights to street poles and other important infrastructure. These people who have no intentions to invest but to solicit money from Wi-Fi infrastructure investors. This is causing challenges because Wi-Fi infrastructure players are now dealing with middleman and not municipalities or state institutions. This is happening because of lack of policy.

For Internet of thing to be deployed both public and private sector property owners must allow right of way. This is a principle that has been used in communications for the last 100 years. Internet of Things is the underlying infrastructure for smart cities. Without Internet of things there will never be a smart city. In order for the Internet community to build sensor networks and Wi-Fi access points we need a joint team between DTPS, COPTA< The Provincial government and Cities and or Metros together with Wi-Fi and IoT community. Building smart cities start with clear policies, regulations, by laws and other instruments that will make it easy for entrepreneurs to conduct business in this space. I recommend that a smart city task team be established to address all the above blockages. The earlier we do this the better.

Let me summaries Chairperson

Data is becoming the foundation of modern economy. Every sector of the economy will be driven by the Internet. The role of the City-State, Provincial government, and National government, Private sector, Civil Society is key in driving policy reform.

This new environment will need not only laws and policies emanating from DTPS or Communications but by laws at local government level.

The online content issues will also need to be addressed through a multi stakeholder model. This is global best practice.

List topical issues confronting society today are

  • The right to be forgotten
  • Digital jurisdiction
  • Digital identity
  • Social engineering
  • Remote viewing and many more

As we address infrastructure issues we must not forget that these are also very important issues.


One comment

  1. Great speech Andile. Like the part about getting policy right in Gauteng in order to stimulate Entrepreneurs. Keep up the work!.

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