International companies are finding South Africa competitive for Global Business Services (GBS), Ebrahim Patel, the Minister of Trade, Industry and Competition, said in Cape Town yesterday
South Africa has positioned itself at the centre of the global consolidated enterprise end-to-end business services owing to its fully developed telecoms ecosystem, top-notch customer service and price competitiveness compared to Asian competitors.
Patel commented during the ongoing Business Process Enabling South Africa GBS Conference that a large European company was considering locating to South Africa this year.
"In September this year, I met with a large company in Europe that is considering locating to South Africa," Patel said.
This would add to other global auto and manufacturing companies that had digital hubs in South Africa. The government was providing incentives and financial support to the GBS industry in South Africa in a bid to boost jobs creation, said Patel.
South Africa was also strategically located for global companies seeking a location from which to provide regional and international business services. Some of these companies include Samsung, Tata and Siemens, according to one report.
However, there was a need to grow the industry and position it for the future, building on South Africa's competitiveness, players attending the Cape Town conference said yesterday.
Patel also highlighted the need to "work with industry to obtain a wider geographic" advantage by "moving beyond the four major metros" currently covered, to other areas.
The Eastern Cape was an example of where the successes from Cape Town could be implemented. Patel said there was "enough space in South Africa" to grow GBS sector in multiple locations.
"We have to be able to strengthen South Africa's reputation. We took extraordinary measures during Covid-19 to keep global business services running," he said.
One of the big advantages that South Africa is capitalizing on is the advantage of technology enabling work from home and remote work. Patel wants to see this unlocking more jobs for youths and women in South Africa.
"Two large manufacturing companies now have digital hubs in Eastern Cape. When there is a challenge at their plants in Brazil, they call on South Africa," added Patel.
The Trade, Industry and Competition department was budgeting as much as R569 million to support the GBS sector, he added.
Moreover, South Africa was advantageous in GBS in that it has a better price competitive perception when compared to other competitor regions.
Patel said South Africa had better and lower costs for GBS in terms of "total cost of operation with more resilient" infrastructure. Coss for GBS in South Africa were lower by up to 65%.
"We have a strong customer service culture and deep domestic market expertise. Our own banking and insurance have knowledge and capability that easily translates to providing back-end support," explained Patel.
South Africa was now "undertaking a review of the GBS program" with the next phase set to "focus on projects with longer periods of jobs" retention.
Companies setting base in South Africa for GBS will be covered by employment tax incentives, Special Economic Zone (SEZ) incentives, global business Services incentives and digital-specific support initiatives. Work readiness and tech skills development programmes as well as digital innovation precinct and academies have also been modelled for the sector.