Technology is South Africa’s biggest area of economic underperformance, according to a new report from Goldman Sachs.
The report, entitled ‘Two Decades of Freedom’, highlights South Africa’s achievements since the establishment of democracy in 1994 and the challenges the country still faces.
Though it said South Africa has made significant advancements in the last 20 years, it said unemployment and inequality were among serious challenges still hindering the country’s economic development.
“The biggest area of underperformance is technology,” the report said, noting South Africa ranked low in Goldman Sachs’ ‘Growth Environment Scores (GES)’, which are used to measure a country’s performance against certain criteria and compare countries with each other.
South Africa scored low in the areas of personal computers, internet users, internet servers, patent applications and research and development (R&D), with Goldman Sachs comparing the country’s performance with that of South Korea.
“When we benchmark South Africa against the best-in-class growth market peer, South Korea, we identified those areas in which SA lagged by more than 5,” the report said, though it did give South Africa the same score as South Korea when it comes to mobile subscriptions.
“South Africa significantly underperforms South Korea in the areas internet access, personal computers, and R&D (research and development).”
Goldman Sachs said giving more people access to personal computers and connectivity would boost the country’s economy.
“By making improvements in these areas with large potential impacts, South Africa could show significant progress,” it said. “Finding a way to fund and roll out computers and internet access to communities would be one way in which South Africa could address the issue.”
South Africa has more than 100 per cent mobile penetration, and has targeted 100 per cent broadband penetration as part of its Vision 2020 programme.