Development of the Digital Economy as a driver for Economic Transformation/Upgrading and Structural Reform

Type Conference Paper - 2016 Annual for Think Tanks of Emerging Economies Economic transformation and deepening structural reforms
Title Development of the Digital Economy as a driver for Economic Transformation/Upgrading and Structural Reform
Author(s)
Publication (Day/Month/Year) 2016
URL http://www.bricsresearch.org.za/dynamic/uploads/documents/KrishChetty-DevelopmentDigitalEconomyDrive​rEconomicTransformation.pdf
Abstract
Information and communication technologies (ICT) offer innovative new solutions that could
empower the poor. Although, these advances have emerged in South Africa over the past decade,
various challenges remain that prevent these technologies from being used fully. Poverty and inequality
in the country continues to deny digital inclusion to the masses of the South African population, hence
participating in the productive aspects of the knowledge economy remains elusive to many as much of
the population remains in a survivalist mode.
Unemployment is a major factor in South Africa which traps the population in a state of poverty.
Unemployment is fueled by the country’s poor performing education sector which is plagued by a large
number of school system dropouts. Less than half of all school learners complete grade 12 and less than
10% complete some form of higher education. Thus the formal skills base in the country is very low,
and the majority of the population find that they are unemployable. The economy is divided unequally
as the fewer and more affluent portions of the population continue to move into the higher productive
jobs whilst the poorer majority, the unemployed and semi-skilled remain either unemployed or feed the
low paying jobs within the economy. This cycle repeats across generations and thus the majority seldom
move out of the poverty trap.

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