Cape Town’s greatest challenge is attracting and investing in talent as it aims to expand as Africa’s Tech capital.
The Greater Cape Town area was revealed as the most productive tech sector in Africa in a new report by Endeavor Insight entitled “Evaluation & Network Analysis of the Cape Town-Stellenbosch Tech Sector”. It was commissioned by the Cape Innovation and Technology Initiative (CiTi), Wesgro, and the Allan Gray Orbis Foundation, with the support of the Western Cape Government.
The report reveals that the Cape tech sector is significantly more productive than other African cities, with 450-550 entrepreneurial companies employing between 40,000 to 50,000 people – more than double Lagos and Nairobi combined. In the region a promising 3 per cent of local companies have reached scale (more than 100+ employees).
Cape Town’s tech hub strengths hinge on its entrepreneurial dynamism and a culture of innovation, vibrant local tech business community for start-up support, and the attraction of strong universities and major companies.
Chief concerns, however, included access to talent, followed by access to equity and finance, and access to customers.
With South Africa’s current unemployment at 27.2 per cent of the labour force (Q2 2018), the report noted Cape Town tech sector’s potential to accelerate meaningful job creation. A key recommendation was an increased focus on investment into talent development.
Ian Merrington, CEO of Africa’s oldest tech incubator, the Cape Innovation and Technology Initiative (CiTi), said: “As an integral catalyst for the ecosystem’s growth, we are hearing a similar challenge across African tech sectors – sourcing specialised talent for digital teams is seriously limiting business growth. The report was great validation that the CapaCiTi Tech Skills and Job-readiness programmes we drive are completely market relevant to assist entrepreneurs, corporates and governments to understand and better solve their talent constraints to growth.”
The report revealed that of the more than 500 entrepreneurial companies in the tech sector, 20 per cent are working in e-commerce and SaaS sectors, with 15 per cent working in fintech. Cape Town-based tech companies with a strong global presence include: internet giant Naspers; Clickatell; BrandsEye and GetSmarter.
Cape Town International Convention Centre also hosts the world’s largest Africa-focused technology, media and telecoms event, AfricaCom. The 20th edition, in 2017, attracted 13,000 delegates, including representatives from leading international brands such as Huawei, Microsoft and Ericsson. The event has been recognised as a means of not only furthering the sharing of knowledge, but also exposing African tech to trade and investment opportunities.
CEO of Wesgro, the Tourism, Trade & Investment Promotion Agency for Cape Town and the Western Cape, Tim Harris, added: “This report shows that the Cape is the tech capital of Africa – a place of innovation and the future. It also shows us that we can do even more to unlock its full potential and become one of the top tech destinations in the world. The tech sector will be a key driver of economic growth and job creation over the course of the next 10 years and we look forward to watching this ecosystem flourish. Already our investment promotion team has helped land over R1 billion in investment in the Cape tech sector over the last five years. We look forward to growing this investment total even further.”
Featured image: left to right: Jo-Ann Johnston (Deputy Director General: Western Cape Government Economic Development), Karen Gabriels (Allan Gray Orbis Foundation), Ian Merrington (CEO of CiTi), Maha AbdelAzim (Endeavor Insight), Tim Harris (CEO Wesgro), Michelle Matthews (Head of Innovation: CiTi), Rhett Morris (Director: Endeavor Insight)
(via Wesgro, CTICC)