Business Management

Kathryn Cave (South Africa) Starting a Business: Jozi vs. The Mother City

There has always been a divide between Cape Town and Johannesburg. Some people prefer the fast bustle of Jo'burg, whilst others favour the lush gardens of Cape Town. But before now, each city had its place. Cape Town was known for its start-ups. Jo'burg was the financial hub and established gateway to South Africa.

Now, over the last couple of months, each city appears to have made a bid for the other's niche. In February, Johannesburg opened the doors on its first Tech Hub, JoziHub, which looked to foster entrepreneurship and innovation in the city. Last month, Cape Town's Economic Development Department published a brochure (in conjunction with PWC and Wesgro), which sought to attract foreign investment in the city. The message was clear: Jo'burg was firmly aiming initiatives at the local population; Cape Town was looking overseas for outside recognition.

The brochure produced for Cape Town is fully decked out with beautiful images of the city. And explains that since 2006 more than R1.5 billion has been invested in local software and IT. It includes a complete overview of why Cape Town is "unique, agile and diverse", offers profiles of all the more successful start-ups from the region, along with lists of all the opportunities and new initiatives. In an article from Michael Jordan CEO of FNB on why Cape Town is the next Silicon Valley more emphasis than is strictly relevant is placed on the architecture and wide variety of coffee shops. In short this is a concerted effort to sell South Africa's second city to a global audience which may not be fully aware of its charms.

Johannesburg doesn't need to put that kind of input. JoziHub, established by the PraekeIt Foundation, simply announces itself as the first tech incubator dedicated to fostering innovation in the city. Its self-professed aim is to grow entrepreneurialism by connecting businesses and developers with resources. The idea is to give the locals (often disenfranchised youths) within the city a similar boost the one Nairobi received through iHub. In a bid to get the initiative off the ground JoziHubs will be free for entrepreneurs to join and make use of (hotdesks, shared facilities and access to mentors) for the first three months. The website itself is basic and provides information on a series of planned events along with a list sponsors.

These are two very different initiatives aimed at two very different audiences, but what both do go to show is the huge potential within South Africa for technology. And the bid South Africa is making on the world stage. The Cape Town brochure included all kinds of stats on development in the country, most of which are fairly familiar, but the most interesting ones came from the World Bank. These showed that out of 185 countries, South Africa ranked number one at ‘gaining credit', number 10 at ‘protecting investors', number 39 at ‘ease of doing business' and number 53 at ‘starting a business'. Fascinatingly South African entrepreneurs can expect to go through five steps to start their venture over an average of 19 days...

It does all sound fairly straight forward. But the question remains: where will all these entrepreneurs be heading... will it be Jozi or the Mother City?


By Kathryn Cave Editor at IDG Connect


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