International Data Corporation (IDC) today offered the first of its annual predictions for the coming year for the African information and communications technology (ICT) industry. IDC's predictions for 2014 were heavily influenced by the 3rd Platform, the industry's emerging platform for growth and innovation built on the technology pillars of mobile computing, cloud services, Big Data analytics, and social networking.
"Africa seeks relevant technology that brings direct answers to the continent's social, economic, and commercial issues," said Mark Walker, director of Insights and vertical industries at IDC Middle East, Africa, and Turkey. "Solving challenges through innovative approaches and leapfrogging technologies and business models will be key themes across Africa in 2014."
IDC's Africa predictions for 2014, presented by Walker at a press conference today, include the following:
1. Africa will remain a key ICT investment destination, but reality is set to bite in 2014 – Strong GDP growth plus high ICT spend and investment means Africa will remain an attractive technology region in 2014, but users are becoming more sophisticated and demanding so suppliers must become more focused in the year ahead if they are to remain relevant. Although some African countries are experiencing double-digit economic growth, the majority of local markets are small when compared with the mature markets of Europe and the U.S. Due to currency volatilities, labor issues, and reactions to global trends, short-term market outlooks are often turbulent. Over the short term, regional offices of multinational companies will increasingly face the challenging task of managing headquarter expectations solely based on the relevant experience gained in developed markets. Moreover, clients express a preference for providers with solid track records and continued local presence. Service providers will have to display solid long-term strategies and commitment to African markets in order to gain confidence and increased market share in 2014 and beyond.
2. Keyboard-ready IT skills will be in high demand but short supply; academia and commerce to meet minds in 2014 – In 2014, commercial enterprises, government entities, and academic institutions will work together to produce 'keyboard-ready' graduates and young professionals. According to a recent IDC survey, the majority of African CIOs (57%) believe that staffing issues (i.e., the recruitment, retention, development of IT staff) will be the number-one IT challenge for African businesses in the years ahead. African CIOs believe that IT staffing shortages will result in an increased dependency on IT service companies (60%), delays to projects (48%), and decreased adoption of new and innovative technologies (42%). Considering the ability to drive innovation internally in an efficient and timely manner has become a key factor of success for companies operating in the increasingly competitive African markets, IDC believes such organizations will increasingly include the need to directly address the IT skills challenge in their growth strategies. In order to fight the upcoming war on African IT talent, IDC expects companies to develop training programs aimed at adapting existing skills to meet business requirements.
3. Innovation will be the name of the game – African CIOs have been struggling with different challenges in 2013: staffing issues, limited IT budgets, the need to maintain IT security, and the requirements of governance, regulation, and compliance obligations. In spite of these constraints, however, African IT departments have been and will continue to be innovative in their approaches to newer technologies.
4. Governments' focus on developing sustainable ICT sectors will shift up a gear – 2014 will see governments across the region re-examine or initiate policies regarding ICT sector development as a driver for economic growth. The coming year will also see governments across the region heavily promote the creation and development of domestic high-tech sectors that will stimulate economic development, provide employment, and drive regional growth and investment.
5. 3rd Platform technologies will shape the hustle and bustle of the African ICT landscape –Business models based on mobility, Internet, and cloud technologies will grow quickly in 2014, but local constraints will cause this to be in fits and starts and within regional pockets. The key premise behind IDC's worldwide ICT predictions for 2014 is that the most important events of the year will continue to cluster around what IDC calls the '3rd Platform' for IT growth and innovation, built on mobile devices, cloud services, social technologies, and Big Data analytics. Mobile technologies in particular are seeing rapid adoption, with mobile enterprise applications a leading investment priority for organizations across the continent, particularly in South Africa.
6. With undersea bandwidth already taken care of, the focus will shift to the terrestrial network – ICT infrastructure development will accelerate across Africa in 2014 as collaboration between the private and public sectors improves, demand for access grows, and competition heats up. Alternative technologies, including satellite and radio, will come to the fore in a new guise, while the regulatory environment will focus on spectrum allocation.
7. African content creation will ignite the local digital media industry – IDC expects 2014 to be the year of awakening for the African digital media industry, as demand for locally produced content accelerates. The strong growth in mobile data usage and smartphone adoption, as well as advancements in communications infrastructure, will serve as the catalysts of this trend. The number of mobile connections in the three major Sub-Saharan countries (South Africa, Kenya, and Nigeria) is expected to grow 28.2% year on year in 2014 to reach 55.8 million. Smartphone spending in Sub-Saharan Africa is set to increase 5.9% over the same period, while feature-phone revenue will decrease 10.9%, according to IDC's latest research.
8. Governance and compliance obligations will drive the adoption of data analytics in the banking, oil and gas, telecommunications, and government verticals – Governments, banks, telcos, and energy-sector players will adopt data analytics in 2014 as they strive to improve efficiency, regulate effectively, comply internationally, and reduce corruption. Governance and compliance rank among the major challenges facing CIOs in Africa, with organizations in the region tackling an increasing number of regulations, particularly in sectors like banking (Basel, Know Your Customer (KYC), Anti-Money Laundering (AML)), telecommunications (The Regulation of Interception of Communications and Provision of Communication-Related Information Act (RICA)), and government (The Protection of Personal Information (POPI) Bill).
9. Demand for citizen-focused services will accelerate ICT investments by African governments – The year ahead will see governments take advantage of mobile, datacenter, and Internet-based platforms to speed up the delivery of services between departments and to citizens, while improving transparency and governance. Government entities will prioritize ICT spending on various electronic service-delivery initiatives that put the focus firmly on the citizen. This will likely involve the expansion of existing service channels such as physical service centers, call centers, and Web portals for self-service. Alongside these, IDC also expects to see a greater push toward the mobile enablement of government services. It is also expected that smartphones and tablets will become a complementary contact point between citizens and various government institutions.
10. Security concerns will grow as mobile devices, data usage, and access methods proliferate – Cybercrime will make its presence felt in 2014, forcing public and private institutions to collaborate in order to face the threat head on. 3rd Platform technologies are leading investment priorities, with mobile, advanced security solutions, and social media topping the list for 2014. The increasing threat of cyberattacks in the region will lead to further prioritization of investment in advanced security solutions, while data protection is also becoming more important across Africa, with new laws already passed in South Africa and Ghana, and deliberations underway in Kenya, Tanzania, Nigeria, Uganda, and Botswana.
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 49 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.
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