Mastercard Index: South African Digital Economy Declared the Most Developed in Africa
South Africa’s digital economy is the most developed in Africa, and one of the fastest growing in the world, according to the new Digital Evolution Index developed by MasterCard and The Fletcher School at Tufts University that tracks a country’s movement toward digital evolution, gauges progress and assesses challenges in 50 countries comprising the Index.
South Africa ranks 33rd out of the countries measured by the index in digital readiness, which is defined by the markets’ ability to support and encourage digital commerce and payments. In Africa, it ranks ahead of Egypt (48th), Kenya (49th), and Nigeria (50th). The country also emerged as the fourth fastest growing digital economy behind China, Malaysia and Thailand.
“South Africa’s speed of growth can be attributed to the rapidly increasing proportion of the population with internet access, an 86 percent adult mobile phone penetration rate, and a highly developed telecommunications network,” said Ted Iacobuzio, Vice President, Global Insights, MasterCard.
“However, what is significant is that all four of the African countries measured share a common trait of moving at a high rate of speed towards digital evolution, demonstrating huge growth potential for e-commerce.
The Index analyses four key underlying drivers and barriers that govern a country’s evolution into a digital economy: Demand (consumer demographics, income and internet access), Supply (technology and infrastructure), Institutional Environment (governmental policy), and Innovation (environment for creating startups and the overall competitive landscape).
Each country is given an overall digital readiness score between zero (low digital readiness) and 100 (digitally saturated), which is derived from an average score of these four interdependent drivers.
The index also provides an indication, by country, where the next billion Internet users will come from globally. According to McKinsey, Africa’s internet penetration stood at 16 percent (167 million people) in 2013, and is forecasted to reach 50 percent (600 million people) by 2025, indicating the online consumer market will quadruple over this time.
Iacobuzio continued: “There are currently 2.9 billion Internet users in the world, a feat that took over 20 years to achieve. The next billion users will enter the market much faster than this.
“A significant proportion of these will come from Africa, where the four countries studied - Egypt, Kenya, South Africa and Nigeria - all represent exceptional growth potential coupled with short-term opportunity.”
The study analysed each market’s evolution from 2008 to 2013 and grouped each country into one of four trajectory zones:
‘Stand Out’ countries have historically moved at a high rate of digital readiness and maintain high levels of digital transactions;
‘Break Out’ countries are typically developing countries that currently have low readiness scores, but are rapidly evolving;
‘Watch Out’ countries face various challenges, but have significant opportunities for investment; and
‘Stall Out’ countries, while possessing a history of strong growth, are highly evolved and offer little potential for change.
The Index positions South Africa as a ‘Break Out’ country with an overall score of 30 out of 100 in 2013.
Its score jumped from 24 to 34 between 2008 and 2012, a substantial increase compared to other countries. While infrastructure investments in South Africa will drive e-commerce to achieve a likely 30 percent growth rate in 2014, the Index indicates that demand for ecommerce currently lags the global average.
“South Africa may have a relatively average Index score overall, but its digital landscape is evolving rapidly. If this evolution continues at its current rate, South Africa has the potential to grow into a strong digital economy. It is a prime candidate for becoming a ‘Stand Out’ nation in the future,” Iacobuzio said.
The three other African countries ranked in the index are classified as “Watch Out” countries. Egypt scored 17.3, Kenya scored 16.9 and Nigeria scored 13.7 out of 100. These countries are just starting out on their journeys towards digital readiness, each facing different challenges.
Iacobuzio added: “Encouragingly, Egypt, Kenya and Nigeria fared well in their speed of digital growth. This points to their potential to develop into evolved digital economies that further encourage digital payments, and enable future e-commerce opportunities.”
Come back for part two of the fallout from Mastercard’s Index tomorrow, where we will take a look at the key insights from across the continent.
GfK and VMware: Innovating together on hybrid cloud
GfK has been the global leader in data and analytics for more than 85 years, supplying its clients with optimised decision inputs.
In its capacity as a strategic and technical partner, VMware has been walking GfK along its digital transformation path for over a decade.
“We are a demanding and singularly dynamic customer, which is why a close partnership with VMware is integral to the success of everyone involved,” said Joerg Hesselink, Global Head of Infrastructure, GfK IT Services.
Four years ago, the Nuremberg-based researcher expanded its on-premises infrastructure by introducing VMware vRealize Automation. In doing so, it laid a solid foundation, resulting in a self-service hybrid-cloud environment.
By expanding on the basis of VMware Cloud on AWS and VMware Cloud Foundation with vRealize Cloud Management, GfK has given itself a secure infrastructure and reliable operations by efficiently operating processes, policies, people and tools in both private and public cloud environments.
One important step for GfK involved migrating from multiple cloud providers to just a single one. The team chose VMware.
“VMware is the market leader for on-premises virtualisation and hybrid-cloud solutions, so it was only logical to tackle the next project for the future together,” says Hesselink.
Migration to the VMware-based environment was integrated into existing hardware simply and smoothly in April 2020. Going forward, GfK’s new hybrid cloud model will establish a harmonised core system complete with VMware Cloud on AWS, VMware Cloud Foundation with vRealize Cloud Management and a volume rising from an initial 500 VMs to a total of 4,000 VMs.
“We are modernising, protecting and scaling our applications with the world’s leading hybrid cloud solution: VMware Cloud on AWS, following VMware on Google Cloud Platform,” adds Hesselink.
The hybrid cloud-based infrastructure also empowers GfK to respond to new and future projects with astonishing agility: Resources can now be shifted quickly and easily from the private to the public cloud – without modifying the nature of interaction with the environment.
The gfknewron project is a good example – the company’s latest AI-powered product is based exclusively on public cloud technology. The consistency guaranteed by VMware Cloud on AWS eases the burden on both regular staff and the IT team. Better still, since the teams are already familiar with the VMware environment, the learning curve for upskilling is short.
One very important factor for the GfK was that VMware Cloud on AWS constituted an investment in future-proof technology that will stay relevant.
“The new cloud-based infrastructure comprising VMware Cloud on AWS and VMware Cloud Foundation forges a successful link between on-premises and cloud-based solutions,” says Hesselink. “That in turn enables GfK to efficiently develop its own modern applications and solutions.
“In market research, everything is data-driven. So, we need the best technological basis to efficiently process large volumes of data and consistently distill them into logical insights that genuinely benefit the client.
“We transform data and information into actionable knowledge that serves as a sustainable driver of business growth. VMware Cloud on AWS is an investment in a platform that helps us be well prepared for whatever the future may hold.”