Which city is SA’s entrepreneurial capital?

Posted on October 27th, 2014

Which city is SA's entrepreneurial capitalThe smart city movement, with its focus on infrastructure and connectivity aims to make cities more competitive. Competitive cities not only attract talent and visitors, but business and the all important capital.

While all South African cities have a while to go to become global competitive cities, the city of Cape Town does enjoy some competitive advantages, and is very quickly gaining a reputation as the country’s startup and entrepreneur capital.

The Economist Intelligence Unit (EIU) 2012 report, a index of global cities, found that  while Cape Town is South Africa’s second most competitive city after Johannesburg (66th), the city outranks Johannesburg and all other African cities in the Index on five out of eight categories which include: economic strength, physical capital, financial maturity, institutional character and human capital, global appeal, social and cultural character and environment and natural hazards.

Here are some of the reasons the city comes out ahead in the competitive stakes:

1. The Global Entrepreneurship Monitor found that the amount Capetonians would pursue business opportunities was 65% higher than the national average, more than in any other city in South Africa. Johannesburg, often referred to as the country’s economic hub, was only 24% above the national average.

2. It is estimated that 75% of Cape Town’s enterprises are driven by small businesses.

“In recent years, Cape Town has been positioning itself as the ICT and innovation hub”

3. Those aged between 18 and 64 were 190% more likely to pursue new business, while in Johannesburg, the same demographic group was only 60% more likely than the national average to pursue a new business.

4. In recent years, Cape Town has been positioning itself as the ICT and innovation hub of South Africa. Home to Silicon Cape Initiative, Bandwidth Barn and Umbono, it was ranked fourth in the emerging cities list of the annual 2thinknow Innovation Cities Index in 2014. Only edged out by Dubai, Abu Dhabi and Istanbul, it had the highest number of successful IT companies in Africa.

5. The Mother City is also this year’s World Design Capital. According to the initiative’s website, being a design capital gives the city the opportunity to showcase internationally the outcomes of its design initiatives and programmes, as well as the merits of its creative industries. Under the umbrella theme “Live Design. Transform Life”, designers are encouraged to focus on how their work can lead to social transformation.

6. According to the EIU study, Cape Town ranks just ahead of Beirut (Lebanon) and Porto Alegre (Brazil), but behind Busan (South Korea) based on economic strength, and slightly ahead of Istanbul , on overall competitiveness.

A version of this article first appeared on MediaClub South Africa [What makes South African cities competitive?]