With great innovations and entrepreneurs having come out of the tip of Africa already; such as the world’s first heart transplant by Chris Barnard in 1967 to Mark Shuttleworth’s successes as founder of major tech businesses Thawte and the Ubuntu Project – South Africa clearly has huge potential to be a major player in the global innovation landscape!
But where is South Africa now? And what does our current entrepreneurial landscape look like? I believe it is important for you to understand what is happening on the ground of South Africa and have insight into the real issues and dynamics faced by the talent pool from which South Africa hopes to find and support its
next generation of great entrepreneurs (of which there are many!). South Africa is characterised by a huge disparity between those that have key skills/education and those that don’t..and sadly, the latter is largely due to factors out of their control! The key issues that the next generation entrepreneurs face are:
- The national statistics show that approximately 70% of maths and science students achieved less than 40% in 2010 matric examinations – indicating a flawed education system producing a clear lack of skills that are so critical to feeding talents into tertiary institutions to gain further education and deeper understanding of key principles and concepts.
- With a population of around 50million people, we have a shameful unemployment level of 24%!
- Key innovation and funding channels are inhibited by inefficient government bureaucracy, red tape associated with starting up and managing a business and restrictive labour regulations continue to be cited as areas of concern.
- ‘Fear of failure’ – unlike in the Silicon Valley and other thriving start-up ecosystems, South African’s have a harsh attitude towards failure and entrepreneurs are fast criticized if they do not succeed.
- Experts have commented that South Africa is characterised by monopolies and a lack of competition in key areas such as banks, steel, energy, telecommunications, and retail; and that the power of these large enterprises constrains competition from start-up companies unless the start-up businesses are in a position to supply support services required by these larger enterprises.
These key issues (Education and training, Culture, Government policies and Financial support) coupled with a low GDP per capita ($5694 in 2009) directly relates to the majority of our ‘would be entrepreneurs’ becoming ‘Necessity-based’ entrepreneurs – starting businesses to earn an income in order to survive, and in South Africa’s case, also support their unemployed families. What we need to do is help necessity and support ‘opportunity entrepreneurs’ who aim to start high-impact growth companies that are innovative and seek international markets. But for those fortunate enough to get over these barriers and begin their journey of driving their BIG idea to the market, South Africa is rocking! One can just look at our capital city in the Western Cape, Cape Town and its surrounding areas to see a buzzing hub of entrepreneurship and innovation taking place. Home to top universities in Africa; University of Cape Town (ranked #1 in Africa), University of Stellenbosch, Cape Peninsula University of Technology and the University of the Western Cape – the region clearly has the talent pool of young inquisitive minds working on research that could be turned into the next big start-up. Added to this, Cape Town has been shortlisted for the World Design Capital Bid 2014 and has taken third place on 2ThinkNow’s 2010 list for emerging innovative cities. Recognised as a city that is both globally competitive and has regional industry influence on innovation. So is there innovation happening and do we have an active start-up scene? Yes! Recent activity? There has been much debate about whether there is a viable foreign exit market for local start-ups. And there is recent activity to show that there is. PoweredbyVC had a successful exit with Csense to US based General Electric and their sale of Fundamo to Visa! Furthermore direct international investment activity can be seen by the recent funding by UK renowned angel investor Permjot Valia. He invested in local start-up MYOWS, which stands for “My Original Works”, a web site that enables freelancers and entrepreneurs to manage their copyrights. Not only do these success stories add confidence to the South African start-up and investor community, but it also shows that South African start-ups can indeed compete head on with global competitors! So there are definite signs of great entrepreneurial activity happening in South Africa, but who is driving this movement? Over the last several years key pockets of excellences have emerged and some truly amazing initiatives have sprung up, harbouring our entrepreneurial talents and facilitating the entrepreneurs’ journey from idea to market..and beyond. Here are three high-impact initiatives: TED Often revered as a truly powerful platform showcasing the greatest minds of society, locally organised TEDx events have grown tremendously here in South Africa over the past two years – with many of the speakers being the driving force behind South Africa’s change-making start-ups – you can view these great minds here: TEDxCapeTown, TEDxStellenbosch, TEDxJohannesburg,TEDxSoweto, TEDxCityBowl ! Silicon Cape The Silicon Cape Initiative is a private sector community movement that was launched at the end of 2009 and was founded by two South African high-tech entrepreneurs, Vinny Lingham and Justin Stanford. Both being entrepreneurs and angel investors in the ICT start-up sector in South Africa who observed that the Western Cape region showed key traits of an ecosystem in it’s infancy, that could be likened to that in Silicon Valley, California, USA. Why will Silicon Cape Cape work? Read this article. The Silicon Cape initiative already boasts 4 600+ members and is growing on a daily basis, there are ALWAYS events taking place, initiatives forming and connections being made. After all, it’s the people and tangible interactions that make these eco-systems work and the Silicon Cape clearly understands this! You can also find a great resource page for more information and key links into the Start-up scene on their site. Here. Google Umbono Project Google recently launched the Google Umbono Project – a project aimed at incubating African Tech entrepreneurs. It does so by providing joint angel funding from Google and a connected Angel group as well as office space at The Hub and memberships from Google developers. What start-ups should we be watching? Take note of these start-ups emanating from South Africa: Edgecampus, Personera, Sampleboard, Trustfabric, Motribe, Cognician, Evly, Wiwallet, Chesscube
- 34 other fast growing South African innovative companies here.
- Hear what our top entrepreneurs have to say: dogreatthings.co.za
So where is South Africa now? And what does our current entrepreneurial landscape look like? South Africa is a dynamic and vibrant country, full of potential and the possibility to do great! There are real issues that need to be addressed and there is a mountain to climb for those wanting to chase their entrepreneurial dreams and create innovative companies. If they succeed in starting their venture – overcoming these initial barriers – we have phenomenal change-makers, initiatives and communities that are committed to help them succeed!