LAST month, Amazon, an online retailer, announced that it had opened a software development centre in Cape Town. Chris Pinkham, a South African who is returning home from Seattle to head the operation, says that Amazon chose South Africa because of its pool of high-calibre IT workers and good infrastructure. The new outfit will create programmes for users around the world. Will other foreign firms also move such operations—a strategy known as offshoring—to South Africa?

According to a recent study by McKinsey, a consultancy, South Africa is well placed to benefit from the trend of firms shifting business processes, such as customer care and payroll administration, to cheaper places. This, says McKinsey, could create 100,000 jobs in South Africa as well as attracting a modest but useful $90m-175m in foreign investment by 2008. …