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LINK Public Policy Series

Crafting the South African Digital Economy and Society: Multi-Dimensional Roles of the Future-Oriented State

Lucienne Abrahams, Tania Ajam, Ayad Al-Ani and Trudi Hartzenberg

February 2022

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1. Introduction and aims
2. Analytical framework: Interpreting the roles of the state in digital transformation
3. Analytical framework continued: The digital partner state
4. The evolution of digital policy in South Africa: Weaknesses in the capacity of the state
5. Selected case analyses on the future-oriented role of the state in South Africa
6. The state: Missing capabilities
7. A change management approach for the state

The policy paper focuses on four themes, namely, (i) the relative importance of the role of the state in the digital economy; (ii) the multi-dimensional role of the state (as regulator, innovator, distributor, and enabler); (iii) using particular roles to tackle specific aspects of the digital divide in South Africa; and (iv) advancing the capacity of the state to foster the digital economy. The state is not monolithic; it is a many-faceted entity, and it is driven by many varied influences on its behaviour. It can remain in stasis, or it can orient itself to the future, with the aim of transforming the economy and society. Transforming the economy and society requires the state to progressively transform itself in collaboration with its partners and communities. Consensus-building, not command-and-control, will need to be the order of the day, and the state will require change management to become a technocratic-collaborative, benefits-driven state. In order for the state to progress towards an inclusive digital economy and society, governance in the transforming state must address many challenges, including new forms of capture by sectional interests. Rising to these challenges requires a commitment by the state to actively engage, learn, collaborate, plan, partner, innovate, and include. These new behavioural characteristics require both state and non-state actors, market and non-market actors, to change the present mindset, in order to create the digital partner state. The economy will increasingly become digitally enabled, irrespective of contributions from the state, so the state can either participate, effectively, or simply be marginalised.