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Cape Town turns attention to IT-intensive sectors

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 10 Feb 2020

Out of the top five high-growth economic sectors identified by the City of Cape Town, three are IT-intensive.

James Vos, Cape Town mayoral committee member for economic opportunities and asset management, says the industries poised for high-growth in the city include tourism and hospitality, business process outsourcing (BPO), marine manufacturing, technology and green tech.

The city has, in the past, made clear its ambitions to become an established technology hub for the African continent, identifying the green and tech sectors as key areas for investment and job creation.

A 2018 report determined the greater Cape Town area, including Stellenbosch, is the most productive technology sector in Africa.

According to Vos, the city provides funding to and collaborates with special business partners (SBPs), which are then tasked with addressing developmental challenges and actively seeking opportunities to grow the Cape Town economy by attracting investment.

In addition, R2.6 billion worth of investment was secured, 5 720 jobs were created and 2 048 people were trained by the city’s SBPs, says Vos.

“The economic landscape in Cape Town is more resilient than other cities in South Africa because we focus on and support the high-growth sectors, through working with and funding our SBPs.”

The city’s SBPs include the Craft and Design Institute, Cape Town Fashion Council, Cape Clothing and Textile Cluster, the Cape IT Initiative, Wesgro, Business Processing Enabling South Africa(BPeSA), Clotex, Cape Town Tourism and GreenCape.

Most of these partner organisations are linked to industry sectors, which present an impressive potential for growth, notes Vos. “The funding the city provides to the SBPs is tied to targets or outcomes in terms of attracting investment, expanding and retaining business, or training to provide skills pipelines for high-growth sectors.”

Catalytic investments

Last year, the city revealed BPO attracted investments of R4.7 billion over a period of five years.

Speaking at the time, Vos said the partnership with BPeSA over the years has allowed the city to secure new investment, with major companies choosing Cape Town as a base for their operations. In turn, this has created numerous jobs for residents.

Furthermore, the sector employs 59 000 people in the Western Cape, he said.

“We identified BPO as a catalytic sector for the city, and over the past five years, the sector has not disappointed us.

“We have experienced phenomenal growth and the partnership has generated investment to the value of R4.7 billion over the last five years.”

BPO is not the only industry in which the city in making inroads.

The Western Cape government recently revealed National Treasury has approved Kannaland Municipality’s R1.2 billion solar farm.

The Democratic Alliance-led Western Cape government, which also controls the city, has long been demanding that government allow it to procure renewable energy from IPPs.

It argues the country’s outdated electricity regime forces the province to be wholly dependent on Eskom for energy requirements.

In a statement, the provincial government says the project will be a public-private partnership between Kannaland Municipality and InnovSure, to provide an alternative source of green energy to the municipality.

Deidre Baartman, DA Western Cape committee spokesperson for finance, economic development and tourism, states: “This is a fantastic initiative as this investment will create job opportunities and the company will further invest R42 million per annum in the Kannaland Municipality for critical infrastructure projects and further assist the municipality with smart technology.”

Baartman indicated that during off-peak periods, the solar farm will also be able to draw energy from Eskom and release it during peak hours by means of storage capacity.

She concludes: “I will be monitoring this development closely to ensure the Western Cape attains energy independence from Eskom to grow our provincial economy and create much-needed jobs.”