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Cape Town Sets its Sights on an Entrepreneurship Ecosystem


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The City of Cape Town has a bold vision to create an environment that stimulates, supports and nurtures entrepreneurs, placing Cape Town on the global map as a centre for innovation and entrepreneurship.  The vision follows the model pioneered by the City Council of Barcelona in Spain, which has positioned Barcelona as a leading hub in Europe.

In a recent international study on early-stage entrepreneurial activity conducted by the University of Cape Town’s Graduate School of Business, Cape Town was ranked number one out of cities in 34 countries—and exceeded South Africa’s national average by 190%.

“These results are encouraging, and indicate that Cape Town is well-placed to take up the opportunity to become the leading innovation hub in Africa,” says Mansoor Mohamed, Executive Director for Economic, Social Development and Tourism at the City of Cape Town.

Mohamed says that natural beauty of the city contributes to inspiration, a crucial component to innovation and entrepreneurship.  “We also have a number of entities supporting entrepreneurs—from large corporates to business incubators like the Bandwidth Barn.

“Our vision is to bring all of these players together—either in a physical or virtual space—to enhance our ability to nurture entrepreneurs.  The idea is to create an ‘ecosystem’ where start-ups can find mentors and funding, venture capitalists can engage with great ideas, employment opportunities can be created, etc.

“If we do this successfully, Cape Town has the opportunity to position itself alongside Barcelona in Europe, and MIT and Berkley in the US.  The spin-off for the South African economy as a whole would be significant.”

Given the entrepreneurial talent being generated in Cape Town, achieving the City’s vision seems feasible.  In the recent Global Entrepreneurship Competition 2009 (GEC 09) in Barcelona, Cape-based entrepreneur The Broccoli Project scooped two awards ahead of 28 competing countries.

The Broccoli Project uses a similar model to the incentive and loyalty programmes targeting the rich, and rewards the poorest members of society for engaging in positive, life-enhancing behaviour.  Poor people who participate in free health screening programmes, actively seek work, or keep their children in school are rewarded with vouchers for basic necessities such as food, clothing or building materials.

Marc Anthony Zimmerman, head of Broccoli says that support has played a crucial role in its success.  “Being part of the My Mentor programme at the Bandwidth Barn and the support of venture capitalists like Cape Venture Partners have contributed significantly,” he says.

“Generally in South Africa, there is a huge chasm between people with great ideas and access to funding.  There is also an attitude that discourages local entrepreneurs.  In the US, you have to fail at least once before getting funding.  If you fail in SA, you get booed off the stage never to return.  This harsh environment makes it tough for entrepreneurs.”

Mohamed says that the City of Cape Town is determined to change this.  As one of the judges at GEC 09, Mohamed was impressed with the quality of ideas and business plans generated by very young entrepreneurs in sophisticated industries from countries like Russia, the US and India.  “We need to encourage our bright minds from an early age,” he says.

To take the City’s vision to the next level, Barcelona Activa, the local development agency of the City Council of Barcelona established in 1986, will be presenting to Cape Town’s political structures in the next few months.  “We can learn from Barcelona and potentially implement a turnkey solution that will enable us to leapfrog onto the global stage.”

Date Posted: 2009-08-06
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