Page 63 - IRMSA Risk Report 2023

South Africa’s Global Digital Competitiveness investigations have revealed the biggest drivers for
ranking increased by two positions to 58th in 2022, these outages were:
this according to the IMD World Competitiveness
Centre. The biggest gains were in training and • Unreliable energy supply – The country’s
education, with significant drops in technology energy crisis, which is the result of dilapidated
capital investment from the previous year. The infrastructure and poor planning, has led
digital-competitiveness ranking indicates a country’s to rolling blackouts becoming a common
Failure to resolve the energy Accelerate the execution of the national strategy to restructure the national power ability to adopt digital technologies as a key driver occurrence in the country. Energy shortages
crisis that is resulting in utility and introduce new players in energy generation, while transitioning the country for economic transformation. The lack of capital resulted in outages of critical infrastructure,
persistent service outages and to renewable energy sources. Private enterprises are to seek opportunities to become investment in technology infrastructure is indicative service unavailability and general degradation
degradation in the quality of less reliant on state-provided energy. of the proliferating digital-service outages that South of services. Service providers not only incurred
digital services. Africa experienced in 2022. This has been affecting millions in revenue losses, but sourcing alternative
financial, communication and e-government energy such as generators and batteries led
services, resulting in millions of rands in losses for the to millions of increased operational costs too.
Lack of investment in digital Leverage strong private-public partnerships to promote local digital infrastructure
infrastructure required to investment. economy. Failure of infrastructure was identified as
support digital services Provide regulation, incentives and favourable policies for private-sector participation, the 4th top country risk for South Africa by the World • Cyber-security breaches – Technology
and lower costs of access to enable competitive and universally accessible digital services. Economic Forum in 2022, indicative of the pivotal networks continue to become more complex
(communications networks, role of digital infrastructure as a key economic driver. and distributed, with increasing numbers of
data centres, security centres). 3rd parties, as well as an increased number of
E-Commerce in South Africa is expected to grow by users working from home, thereby increasing
150% to reach R225 billion by the year 2025. This vulnerabilities for technology users. This has
Restrictive or inadequate Review, amend or create national policies to support digital transformation. This would will be driven by consumer trends accelerated by the increased the threat landscape for cyber security
policies that do not promote include ensuring that fair intellectual-property laws and data-protection regulation is COVID-19 pandemic, which saw many users shift to teams to manage. Ransomware attacks have
investment, competition and in place. A step further would be to introduce compelling subsidies and grants in the digital as well as digital adoption, fuelled by internet also increased. They are now being offered
local innovations. technology sector, as an effective way to increase innovation and productivity. penetration and decreasing connectivity costs. The as a service. This has made attacks easier to
national government also aims to digitise government access, more targeted and requiring little skills
services through its e-strategy. This will begin with to perpetuate. Additionally, the geopolitical
Inadequate response to cyber- the building of a strong broadband backbone for all wars have become new motives for state-
crimes and crimes to critical its sites, supporting a number of initiatives such as type actors, organised actors and politically
infrastructure. For example: free Wi-Fi, online booking systems, digital licences, motivated persons committing attacks. Bitcoin
online scams, ransomware Clear and visible action taken by the regulators for cyber and technology-related etc. As businesses become increasingly digital, the has made it harder to trace the illicit flow of
extortion, the theft of power crimes. threat to the national economy from digital outages proceeds from these malicious activities. All
cables and the theft of cell A dedicated policing effort, to secure digital infrastructure. is becoming increasingly pronounced. of the aforementioned has resulted in cyber
phone tower batteries. Increased multi-sector and international collaboration to better respond to threats (for insurance being more difficult to secure from
The negative economic example: intelligence centres). This past year, we evidenced monumental insurers and more expensive than before. This
environment and rising cost digital outages that South Africa experienced has resulted in increased costs of doing business.
of living has given rise to illicit with devastating consequences for citizens and
economic activity. businesses. Banks suffered outages that left users • Technological agility – The rate of technological
unable to access digital channels and ATMs for days, change, particularly over the past 36 months,
while the national government suffered outages that has outpaced the ability of organisations to keep
Failure to develop local Strengthen partnership between academia and industry to identify and develop skills left citizens unable to access civic services such as up. User demands have exponentially increased.
specialist digital skills that are required, with a focus on science, technology, research and entrepreneurship. IDs, passports, and licenses. A leading credit bureau Businesses have sought to develop new services.
required to support business Strategic partnership with international industries to enable knowledge transfer and had services and personal information compromised In response, technology vendors have developed
objectives (for example: secondary innovations. State-sponsored digital awareness and education initiatives for by hackers, with ransom demands following. These new technologies and disruptive technologies
security, data analytics, ordinary citizens. outages were over and above international services have entered the markets. IT & cyber teams
programming skills, etc.) outages that affected the biggest instant-messaging are struggling to acquire new technology and
platforms, Cloud services, and content-delivery develop skills, as well as implement and adapt
networks used by millions of people. Post-mortem to these new needs.

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