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More public sector support required?

11 July 2007 News

The public sector is not 'walking the talk'when it comes to empowerment by not supporting local developers and manufacturers of high-technology equipment.

That is the view of Inus Dreckmeyr, MD of Proudly South African electronic research and development house Netshield SA, who says the tender protocol followed by most government departments and parastatals does not support government's stated objectives of promoting business development, empowerment and economic growth.

According to Dreckmeyr, there is enormous potential for the expansion of the local high-tech design and manufacturing sector in South Africa: "However, government and parastatal procurement practices do not dovetail with this. They focus on BEE in the narrowest sense of the term instead of using the opportunity to stimulate the local high-tech industry. Similarly, the ironically named Industrial Participation (IP) programme, which attaches an investment obligation on contracts with imported content valued at more than US$10 million, does little to stimulate local high-tech IP (intellectual property) development or manufacture," he says.

Dreckmeyr points out that while a few public sector tender documents do include some focus on local manufacture and/or local content, there is seldom any credit given specifically for local design and development. "Local developers of high-tech equipment receive little, if any, recognition for or benefit from offering a local solution or product that meets the tender specification, yet that is where industry development - including manufacture and job creation - start," he says and points out that even local manufacture is seldom weighted at more than a miserly 2% of the tender evaluation criteria, while BEE receives a weighting of 10%.

Yet local developers and manufacturers have to compete head-on with multinational giants and companies that enjoy high levels of government support in their home countries. "In many instances, it is official support for small, local developers and manufacturers in countries in the East and elsewhere that has resulted in countries like Korea, India and even Brazil starting to become global technology leaders. In South Africa, however, our OEM sector is stagnating when it could contribute towards employment creation and skills development," he adds.

Dreckmeyr emphasises that local developers and manufacturers, like Netshield, do not expect public sector procurement protocol to give unjustified preference to local products. "We do not want government and parastatals to opt for inferior products simply because they are local. However, there should be much more acknowledgement and reward for tender submissions which feature locally developed or manufactured products that provide comparable features and quality as their imported counterparts," he concludes.





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