Tim Harris, the CEO of Wesgro, believes that the tech sector is in a position of becoming front drivers of future economic growth in Western Cape. According to him since the services sector is already making up above 70% of the GDP of Western Cape, there is a huge opportunity for the province to place itself as a leading center for the innovation in Africa. Harris added that development of deeply rooted tech ecosystem that has global recognition is important to the process. This will after that bring capital, multinational entities, and talent to Western Cape.
Harris who was replaced by Wesgro’s head of investment promotion James Milne as a member of the board at Silicon said that there is huge maturity in the tech sector compared to five years ago. Many barriers that have been standing on the way of sector’s progress have been eliminated by Silicon Cape’s efforts and various lobbying groups. Harris said that Wesgro helped to get outward investment deals worth around R500 million during the last financial year. The deals included tech deal in the ICT and banking sectors worth R200 million in Ethiopia by a tech company based in Western Cape.
Wesgro together with key stakeholders in the local business scene have been working to come up with an enabling environment for Western Cape-based tech startups. The stakeholders include Cape Innovation and Technology Initiative and Silicon Cape, City of Cape Town, Western Cape Government, and other players within the private sector. The investment promotion unit of Wesgro works with various businesses ranging from startups to multinationals. It does that with the aim of attracting foreign and local fixed direct investment to Western Cape to create more jobs. It has worked with businesses like Prodigy Finance, Barclays Rise, MEST, La French Tech, and Amazon. Harris added that the main objective of the unit is to attract and promote fixed investment. For those who are interested in linking up with the Wesgro Investment Promotion Unit can get to them through [email protected]
Currently, Wesgro is coming up with a trade-in-services strategy. Wesgro’s international unit be taking tech startups to different international trade exhibitions to pitch their product and service as part of the strategy. Wesgro in partnership with the Department of Trade and Industry recently offered support to 14 startups in South Africa to pitch their tech and ICT innovation at Viva Technology in France. The event was hosted from 24th to 26th May 2018 that saw the participation of 14 startups. Western Cape had five companies out of the 14 to the event. The five were Ispani Group, Jonga, Domestly, Karisani, and Alvarita. The event aimed at tracking the growth of digital industries and linked startups to companies, tech leaders, and global investors. The 2017 event recorded the presence of over 68,000 visitors, 1,400 investors and 6,000 startups from 103 countries globally.
The fact that there has been a growth in startup activities in Gauteng is encouraging. This is because they are bringing stiff competition in the economy which is important for its growth. Growth in SA tech ecosystem leads to a stronger pipeline of skills that are brought by opportunities. Wesgro is working together with institutions and organizations to make Cape Town a leading tech destination. The team from Wesgro develops and runs collateral that pitches achievements in the local tech ecosystem to give the real picture of the main successes in the city. Commonly startups face various challenges like governmental red tape, funding and markets access. This is what is also affecting the tech sector in Cape Town.
Wesgro came up with some initiatives to help overcome such challenges. For instance, it allowed access to international markets for startups based in the city. This is through Wesgro’s Export Advancement Program (EAP). It has also helped to eliminate the red tape. For instance, in 2017 it launched the InvestSA One Stop Shop. This is an infrastructure center which is funded by the Department of Trade and Industry in partnership with various governmental bodies run by Wesgro. Moreover, Wesgro has worked on improving access to funding by working with lobby groups. This has helped in growing flow of investment through solving issues affecting the flow of finance, especially to startups. The issues include IP policy, visa and immigration issues and exchange control regulations. The platform has realized that companies are highly maximizing on decentralized structures. These are structures that aim at ensuring that vital components of their business are located in areas that allow them to succeed in specific goals. As far as this is concerned Cape Town is an important location on the continent for fintech and edtech startups. Harris said that cities, regions, and countries that are not focusing on given areas of excellence as well as giving an enabling environment for startups are still lagging behind.