Special Economic Zones (SEZs) have always been regarded as essential engines for socio-economic development.
This is the word from Magama Makgamatho, chief knowledge and digital officer for the Coega Development Corporation, speaking in a panel discussion at the 20th Annual ICT Summit in East London this week.
In the past, the role of SEZs focused primarily on attracting Foreign Direct Investment (FDI) and facilitating the manufacture or production of commodities, she says. But the world has fundamentally shifted; we are now firmly in the digital era and the age of the Fourth Industrial Revolution (4IR), and this new context makes our SEZs more crucial than ever before.
To truly execute South Africa’s digital transformation strategy and unlock its socio-economic potential, our SEZs must evolve their focus. Information is now the world’s most valuable commodity. We have not and will never abandon the goal of attracting FDI, but we must be strategic about what we are attracting.
The new anchor for development is firmly rooted in digital infrastructure, digital services, and the entire knowledge economy. SEZs must be consciously re-directed to leverage this shift, becoming the geographical and policy hubs that not only house data centres and fibre cables, but also cultivate the innovative ecosystem that uses them.
In this usage and uptake, the power of partnerships must also be acknowledged. SEZs are government tools and catalysts for socio-economic development, but they are not intended to act alone.
To realise the ambitious goals of the digital era, partnership is the key capability and must be embraced, according to Makgamatho. The old model of government funding needs to be replaced by dynamic collaborative action.
The silo mentality is a development killer; but partnership with other public entities and the private sector can be the remedy.
If a specific digital enabler, like a high-capacity fibre cable, is needed for an area like the Eastern Cape, state entities must move beyond their individual mandates and work together to deliver the infrastructure collectively.
Makgamatho adds that private sector expertise is vital for agile planning and execution. SEZs must forge partnerships with private entities that bring not just capital, but operational efficiency, while adhering to strict governance and accountability for results.
We must ensure the SEZ mechanism is used to enable and commercialise technological innovation. By walking jointly with innovators, we can ensure their prototypes and creative ideas are successfully moved out of the lab and into the market, driving real economic value.
A glaring challenge in the digital transformation is skills development, she adds. Studies show that South Africa has a pool of trained talent, such as AI engineers in the Eastern Cape, who are working elsewhere because the local ecosystem has not successfully managed to retain them.
SEZs must tackle this head-on by creating an environment that not only attracts our skilled engineers and developers but also allows them to address our own unique national problems and build our own economy.