The digital platform economy has the potential to significantly impact the country’s future, with a research report projecting it could inject R91.4 billion into the economy by 2035. This growth would increase the sector’s contribution to GDP from 0.02% in 2022 to a substantial 1.38% by 2035.
The research was conducted by Naspers and the Mapungubwe Institute for Strategic Reflection (MISTRA) to explore the untapped potential of South Africa’s digital platform economy – a sector which includes online platforms that facilitate economic transactions.
The research found that collective action is essential to accelerate South Africa’s digital transformation journey. It highlighted the need for businesses and government to collaborate in overcoming growth challenges and creating a supportive environment for digital platforms to thrive.
The report also revealed that digital transformation in South Africa is lagging, even as the demand for digital skills is rapidly increasing. Another key finding is that infrastructure is critical for unlocking the potential of digital platforms and artificial intelligence.
Additionally, the research emphasised that regulations must evolve to keep pace with the emerging digital platform sector. Finally, it discovered that digital platforms will increasingly drive economic inclusion and enhance social protection.
Transformative growth potential
Addressing these findings and achieving consistent economic growth of 3% per year could enable a 20-fold expansion in the digital platform market by fostering the growth of existing platforms and encouraging the development of new ones. This would boost the sector’s GDP contribution from 0.02% in 2022 to 1.38% by 2035 and inject over R90 billion into South Africa’s economy by 2035.
Naspers and its South African entities—such as Takealot.com, Mr D, Superbalist, AutoTrader, Property24, and PayU—have made substantial contributions to the economy. They have generated over R13 billion in economic value, including R1.5 billion in household income (based on 2022 data).
Additionally, they have lowered wholesale and retail trade costs by 0.5% and reduced living expenses by 0.6% through more affordable consumer prices and enhanced convenience via platform-based businesses (based on 2022 data).
“This report comes at a pivotal moment for South Africa. There is a renewed sense of energy and commitment across various players in South Africa to get our country on the path of inclusive economic growth and shared prosperity. South Africa stands on the brink of a digital revolution. Though still in its early stages, the shift to digital mirrors global trends and offers a rare chance to unlock significant economic potential for our nation.As
one of the country’s largest investors, Naspers is committed to leading this transformation by driving innovation and inclusive growth in this vital sector,” said Phuthi Mahanyele-Dabengwa, CEO of Naspers South Africa.
“For this potential to be realised, collaboration is key. Public and private sectors must join forces to bridge the digital divide by expanding digital access, accelerating digital skills to underserved communities and ensuring regulations fuel innovation and create a level playing field. By doing so, we will ensure that no individual or community is left behind. If we get this right, it will be a game changer for inclusive growth and propelling South Africa into a prosperous digital future.”
The research report points out that around the world, successful economies are fast transforming into digital economies while the pace of digital transformation in South Africa is relatively slow.
Globally, there has been a significant shift towards digital dominance among the world’s top companies over the past decade. In contrast, South Africa’s leading companies have seen little change in composition during the same period, reflecting a more gradual pace of digital transformation, which is still in its early stages.
The report highlights key opportunities, including how South can drive digital transformation and attract new entrants in sectors like e-commerce and fintech, fostering innovation and greater inclusion.
Additionally, the report emphasises the critical need for increased venture capital investment to unlock the full potential of South Africa’s digital economy, especially in underfunded sectors like fintech and healthtech.
“At its core, the digital platform economy has the potential to drive inclusive and transformative growth,
unlocking opportunities for millions of South Africans eager to engage in this dynamic sector,” said Joel Netshitenzhe the Executive Director of MISTRA.
“There are vast opportunities before us and it is clear that a thriving digital platform economy could bring enormous value to South Africa. While the foundational elements are in place, significant barriers remain that hinder society from realising this potential. The encouraging central message of the report is that solutions are within reach, but they require urgent collaboration and bold actions from all stakeholders.”
Furthermore the report found that the demand for digital skills is growing rapidly. Therefore, building global competitiveness in the digital platform economy is possible if South Africa doubles its current level of STEM graduates.
STEM graduates make up only 18% of the total in South Africa, whereas in leading innovative countries like India, the United Arab Emirates, and South Korea, this figure exceeds 30%.
Recommendations
- South Africa needs to increase its current share of STEM graduates by developing interventions for digital education at basic education-level.
- South Africa requires a more coordinatedcapproach to fully harness and developcthe potential of digital skills across thecnation. Significant funders of digital skills trainingcprogrammes in South Africa like Naspers Labs,cMicrosoft Digital Skills Initiative SA and GooglecDigital Skills are vital for building a pipeline of digitalcskills and can play a role in this co-ordination.
- Enhance the alignment between public and private training programmes and nationally recognised critical skills and high-demand occupation lists to maximise opportunities. This will ensure that digital training programmes are directly tailored to meet the evolving needs of the economy, ultimately fostering a workforce that is not only skilled but also perfectly matched to the areas of greatest demand within the job market.
