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									                             South African Information Technology Industry
                                           SAITIS Project Office              Telephone: +27 (12) 322 4600
                                               Private Bag X84                      Fax: +27 (12) 320 0650
                                                  Pretoria 0001
                                                   South Africa                           www.saitis.co.za

To determine what elements for successful cluster development are missing, from the
ICT cluster projects in Gauteng and Cape Town, respectively, as a means to model the
methods and incentives to accelerate ICT cluster development.

The key players in business, industry, universities/colleges and government R&D will be
invited to come together around a specific project(s) to dialogue and identify the
interventions that will utilise the local market needs to build solutions. This dialogue will
facilitate the building of the consortiums that will provide solutions to problems that exist
in the SA market. These solutions will be exportable to other developing nations.

The appropriate institutional set-up, projects and sub-projects will also be investigated to
provide the mechanisms to strengthen the capabilities of Gauteng and Cape Town to
become centres (or clusters) of ICT growth, that can be replicated in other provinces.

Time Lines
1.  Establish cluster initiative office – February 28, 2001
2.  Consult key stakeholders – March 30, 2001
3.  Perform gap analysis – April 30, 2001
4.  Develop techno map for the two clusters – August 31, 2001
5.  Develop incentive / funding mechanisms – April 30, 2001
6.  Inventory prospective relevant public / private sector projects – June 29, 2001
7.  Identify options for management mechanisms – June 29, 2001
8.  Knowledge transfer assembly – August 31, 2001
9.  a. Initiate project development process – August 31, 2001
    b. Established management vehicle – August 31, 2001
    c. Refine project definitions – September 31, 2001
    d. Technical due diligence – December 31, 2001
10. a. Prepare a program for requests for project(s) proposal(s) solutions and establish
        an advisory panel for ajudication – December 31, 2001
    b. Technical due diligence – January 31, 2002
11. Evaluation and monitoring – January 31, 2002
12. Regular growing functions and events to bring people together – January 31, 2002
13. Apply for regulation free zones for clusters
14. Cluster research papers (5)

Accelerate ICT Cluster Development v1p0 013001                                               1
Canada Work Plan Session
   Identified institutional set-up. (Cluster office) i.e. mechanisms and models for the
    cluster office. e.g. OCRI
   Established cluster office.
   Approved regulation free zones for clusters.
   Refined projects on identified problems/opportunities facing SA.
   Developed incentive mechanisms.
   Knowledge transfer assembly.
   Demonstrationable networks of the key players working together effectively.
   Rise of new technologies, new skills and research capabilities.
   Development of new IP (patents, copyrights).
   Application and improvement in the eight characteristics of success.
   Strengthened core organisation (e.g.-Innovation Hub; CITI).
   Regular growing functions and events to bring people together.
   Increased ICT Sector jobs (direct, indirect and induced);
   Number of Research papers;
   Number of People trained in the selected technology domain within the cluster;
   New products/services demonstrated; and
   Increased membership in core organisation.

The costs for the project(s) will depend on the who, what and how of the selected
projects. However, the selected project(s) should be of sufficient scale so that significant
technological advancement will result.

A budget of R15 million per cluster is proposed (to be verified during the development of
the business cases referred to above). Since it will take time for results to appear (i.e.-
the S curve), the project should have a five-year life.

An appropriate sustainable model will be developed for SA.

The cluster initiative project office, will be the responsible for management of the
initiative. This office will recruit and introduce personal for further development in cluster
skills capacity for SA, with special regard to equity considerations. The development of
the necessary skills will be supported by experienced (international) Canadian expertise.
Including CIDA, PWC, OCRI, Venture Capitalists, amongst others.

   DOC
   DPSA
   DPE
   ‘Anchor tenants’(i.e.- one or two large firms)
   SMMEs
   Educational institutions

Accelerate ICT Cluster Development v1p0 013001                                               2
Canada Work Plan Session
   Research laboratories (government/university)
   Financial community
   Labour
   Civil Society
   Gender group
   Youth
   Real estate companies
   Venture capitalists
   Angel Investors
   Donor nations

Prime Responsibility
Cluster initiative office.

In respect of funding:
 DTI to take the lead role.

In respect of cluster development:
 In Gauteng, the Innovation Hub.
 In Cape Town, CITI.

Utilise the development of a techno map project on the two clusters will contribute
significantly to the general awareness raising of the ICT sector.
International (Canadian) cluster experts workshop with Government, academia, unions,
financial, management, researchers, labour, civil society, industry – presenting why and
how they were impacted by clusters, linked to a specific project(s) to ramp up people
quickly. This workshop will transfer knowledge to local people who have been identified
as participants in developing clusters. (Resulting in a mandated over sight body for
cluster development).
Approach University students to prepare cluster research papers.

Considerations by women as to their role in developing and contributing to cluster
development must be considered and applied via a representative women’s organisation
e.g. Technology for Women in Business (TWIB)

Related Initiatives
Other initiatives beside the Innovation Hub and CITI have begun to evolve in the
Northern Province and Kwa Zulu Natal. Communications and dialogue should be
maintained with these emerging clusters to manoeuvre broad ICT sectoral development
among a diverse range of problems facing SA.

Outputs / Outcomes
   Demonstration that the key players can work together effectively.
   Development of new technologies, new skills and research capabilities.
   Development of new IP (patents, copyrights).
   Successful application and improvement in the *eight characteristics of success.

Accelerate ICT Cluster Development v1p0 013001                                             3
Canada Work Plan Session
   Strengthened core organisation (e.g.-Innovation Hub; CITI).
   An increased number of firms in the ICT and ICT-enabled sectors.
   Reduced import of ICT products.
   Increased export of SA ICT products and services

*Eight characteristics of success:
        1. Recognition of potential.
        2. Regional strengths.
        3. Champions.
        4. Entrepreneurship.
        5. Financing.
        6. Information networks.
        7. Education and R&D institutions.
        8. Staying power.

Accelerate ICT Cluster Development v1p0 013001                         4
Canada Work Plan Session
                                               CLUSTER DEVELOPMENT PLAN

                                                CLUSTER DEVELOPMENT WORK PLAN
         WBS Activity                          Costs (days)            Source of Funds                Timeline/Milestone
                                            PO         Sub-contract   PO         Sub-contract
1. Establish cluster office.                                                                    February 28, 2001
2. Consult key stakeholders          20 days                                                    March 30, 2001
3. Develop a process to identify     10 days          2 days (Rick)             R50k            April 30, 2001
   and analyse gaps to address
   problems & opportunities
   facing South Africa
4. Develop techno map for the        2 days                                     R750k           August 31, 2001
   two clusters
5. Identify current incentive &      10 days                                                    April 30, 2001
   funding mechanisms and what
   is required.
6. Inventory prospective relevant    10 days                                                    June 29, 2001
   public/private sector projects
7. Identify options for              10 days          2 days                                    June 29, 2001
   management mechanisms.
   (Include existing
   organisations.)(e.g. OCRI
   approach )
8. Knowledge transfer assembly.      10 days          10 days                   R200k           August 31, 2001
   (develop terms of reference
   and produce report)

Cluster Development Plan Jan 30 2001 v3p0                                                                                  5
                                                CLUSTER DEVELOPMENT PLAN

9a. Initiate project development     15 days        1 day                          August 31, 2001
b. Establish management vehicle
                                     10 days        2 days                         August 31, 2001
c. Refine project definitions.
                                     10 days        1 days                         September 31, 2001
d. Technical due diligence
                                     5 days                                        December 31, 2001
9.    Prepare a program for          20 days                         R15 million   December 31, 2001
     requests for project(s)
     proposal(s) solutions and
     establish advisory panel for
     ajudication. (Proposals to
     utilise other govt. depts
10. a. Monitor project and           40 days                         R60k          December 31, 2001
    conduct evaluation
     b. Technical due dilligence
                                     5 days                                        January 31, 2002
11. Regular growing functions        5 days                          R250k         January 31, 2002
    and events to bring people
12. Apply for regulation free        5 Days
     zones for clusters
15.Develop Cluster Research          5 days                          R100k
papers ( up to 5 - through TIPS)
TOTAL                                187 DAYS       18 DAYS          R18 million

External Funding:
            2001/02                              R2,000,000
            2002/03to 2003/04                    R15,000,000

Cluster Development Plan Jan 30 2001 v3p0                                                               6
                                            CLUSTER DEVELOPMENT PLAN

               2004/05 to 2005/06            R15,000,000
               Total                         R32,000,000

Cluster Development Plan Jan 30 2001 v3p0                              7

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