Gauteng - the smart province

This is the first of a two-part Special Report on South Africa's Gauteng Province by Tom Nevin.

Gauteng, South Africa's smallest, most populous, richest, most heavily industrialised province stands at a crossroads as it contemplates the way forward in the new millennium. Perhaps it has already made up its mind, if the sobriquet of 'The Smart Province' that it has given itself can be read as a clue.

On the one hand, Gauteng sees a rapid conversion of its economy to the information technology (IT) industry and the creation of a South African silicon valley between its principal cities of Johannesburg and Pretoria as catapulting the province into the information age. On the other, its conglomeration of heavy industry provides jobs for the ever-swelling labour pool already under pressure from a 30% unemployment rate.

The problem? How to reconcile the apparently irreconcilable.

An accident of nature

The geographical situation of the province may provide the somewhat painful, resolution. Johannesburg is one of the few principal cities in the world that is not served by water-borne transport: it has no sea or river. It was an accident of nature that the gold that created the city in the first place was hidden in the hills 6,000 feet above sea level and 400km from the nearest port.

The gold attracted miners and their families, the mines attracted the industry to support efforts to wrest the precious metal from the earth and road and rail links were built to connect the fledgling City of Gold with the sea. The goldfields grew at a dizzy pace and created one of the biggest industrial complexes in the southern hemisphere, turning out all manner of manufactured goods - a long way from the sea. Until a decade or so ago, none of this mattered.

Today, the industrial world has been turned on its head and Gauteng must now try and find its feet.

Provincial leaders, both public and private, know that Gauteng has very little option but to join the digital revolution and become an IT world leader. That is already happening in a small but significant way and local high-tech companies are surprising the cyber world with innovative and highly competitive software solutions.

What is also happening is that the big manufacturing companies are taking a closer look at their production and transport costs and coming to the inevitable conclusion that if they are to offer their goods in the global marketplace at attractive prices, they'll have to sharpen their pencils. Just as the world is opening up for South Africa, so South Africa is being opened up for the world. That puts domestic markets under pressure in terms of competitive prices and quality.

The Great Trek in reverse

Just as the mountain would not come to Mohammed, the sea will not come to Gauteng, and so Gauteng industry must go to the sea if it is to cut one of its biggest costs - transport - and make its manufactured goods price competitive world-wide.

The Great Trek in reverse has already started and more and more industry is making the move to the coast. Cities such as Durban and Richards Bay in KwaZulu-Natal, Port Elizabeth and East London in the Eastern Province and Cape Town and Saldanha Bay in the Western Cape all beckon with prime portside industrial land, modern and efficient infrastructure, plentiful water and other natural resources, enviable communications and abundant labour.

Neighbouring countries such as Namibia and Mozambique are also aware of Gauteng's dilemma and are making relocation offers that South African port cities will have to go a long way to beat. The carrots they dangle include a more flexible, affordable and disciplined labour force, tax holidays, coastal industrial land at rock-bottom prices and concessionary entry for their exports into the markets of Europe and the United States. Namibia's main port of Walvis Bay is generally accepted as Africa's most efficient and secure harbour facility.

So, on the face of it, Gauteng appears to have little choice but to go with the evolutionary economic flow and throw its hat into the IT circle. As its industry moves to the coast, its labour force may have to drift seaward as well. IT tends to reduce the number of working people needed, and if this is Gauteng's chosen path, migration of a sizeable portion of its labour force is a price it will have to pay.

As Gauteng ponders the various signposts to its economic future, it can also reflect upon the fact that either by luck or design it is almost ideally located and structured for the digital revolution. Johannesburg International Airport (JIA) stands in the eastern industrial belt, many of the factories and warehouses there can quite easily be converted for IT use. High technology plants can have quick and ready access to the airport for imports and exports, especially of the 'just in time' variety. There's serviced land aplenty and top-end housing complexes exist or are on the drawing board.

The province has already identified its silicon corridor and the provincial government has allocated R1.2bn for its development.

What the provincial leadership would dearly like to see is high-tech and heavy industry existing side by side, if only to allay the fears of labour of yet more jobs being lost. Most understand that's an impractical dream and that the province must now decide on how long the inevitable can be delayed.

With or without the IT nudge the province has been given, Johannesburg in particular is already quite a long way down the information superhighway, swept along by the digital new wave. In Africa, it is the most technically enabled city and daily the Web grips it more tightly. The Johannesburg Stock Exchange has completed its conversion from open outcry to paperless trading through its JET and Strate electronic trading systems. It has sampled life on the technological edge; it must now decide on the measures it will adopt not only to use cyber devices, but also to be a world-class designer, engineer and manufacturer of them.

For the most part, digital exports don't need ships and trains. They're flown to their buyers wherever in the world they may be, or they get there under their own cyber-steam. It's that simple fact that seems to assure Gauteng's future as an IT manufacturing force to be reckoned with.

Groundbreaking SA software technology

For example, a South African software solutions company could become a significant exporter of mobile communications technology when the latest generation of its products is launched in South Africa next month (June) and on the European market later this year. Ambridge Technologies is putting the finishing touches to its groundbreaking range of ContinuAM modulated billing and other information management technology and anti-fraud solutions for cellphone network and service providers.

The new technology is largely a result of the acquisition of a local software solutions company, formerly known as Computer Integrated Consultants (CIC) by the Ambridge Group which is headquartered in Switzerland. The South African company subsequently changed its name to Ambridge Technologies (Pty) Ltd.

"ContinuAM is the concise and efficient management of subscriber information that has changed the way network and service providers bill, relate to their customers and safeguard against fraud," says Ambridge Technologies MD, Steve Shaw. "Most importantly, it is highly cost effective."

CEO of the international parent group, Geoff Edwards, says the group's prime focus is to go international with the software technology that's being developed in South Africa, "and once we've established a firm base in South Africa we will then start exporting the South African software product into Europe".

The race for technological supremacy is accelerating at a bewildering speed for South Africans in general and Gauteng in particular. Commerce and industry in all their diversity have not been slow in grasping the IT nettle.

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