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technologies as a large number of South Africans have cellphones and this is a good platform to deliver services to. Goldstuck of World Wide Worx (Jackson, 2007) believes that SMEs that are using emerging technology like VoIP stand to benefit and grow their markets.

Converged networks, where voice and data are merged into one infrastructure, are already available, with Skype being one of the most popular such applications in use. Businesses are starting to use these tools to communicate with clients and with each other. However, Hatfield (Jackson, 2007) is concerned about the slow take-up of these technologies, pointing out that 90% of businesses still use the old telephone system. Concerns might be due to lack of knowledge, lack of skills to support OSS solutions, and/or risk control.

One of the biggest problems in South Africa is the high cost of connectivity and lack of infrastructure. According to Herselman (2003), South Africa has been developed in an uneven manner: the urban areas have the latest modern technologies while the rural areas are underdeveloped with little of the infrastructure, such as electricity and telephone lines, that is needed to thrive in the knowledge economy. As mentioned above, the South African Government is aware of the need to participate in the global knowledge economy. It has thus mandated Telkom (the local telephone company which is partly owned by government) through ICASA (Independent Communications Authority of South Africa) to meet its target of making South Africa a connected country while reducing the cost of communication.

However, this problem is not the only one. South Africa, like many developing countries, faces a number of challenges in becoming an active participant in the knowledge economy. Some of these challenges are highlighted in the section below on stumbling blocks.

MIT 840

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