The Cape IT Initiative (CITI), an IT cluster development, and its Bandwidth Barn are prime examples of how a government-inspired project has been embraced by the private sector to develop the Western Cape`s ICT sector.
This is according to research consultancy Infonomics, which has released a report, "Lessons in Cluster Development, The Cape information Technology Initiative 1998 - 2000", which traces the start of CITI through its formative phases to the present day.
Infonomics director Glen Thompson says the Bandwidth Barn, which is preparing to move into larger premises to accommodate increasing demand by small start-up IT companies, is a good example of the physical manifestation of the cluster concept as small companies are able to network, support each other and share resources.
"The measure of success is that almost all the companies that started at the Bandwidth Barn in the beginning are still around today," Thompson says.
Cluster development, as a business philosophy, has been around since the end of World War II. However, with the advent of globalisation, it has become even more important as a strategy to develop competitiveness on world markets. Some define a cluster as "a geographic concentration of interdependent firms in related industries".
Success factors
Key factors for success include the energy by which key individuals drive the establishment of the projects and the importance of communication. Underpinning the concept is the fact that business networks are based on people who in turn need a home - supplied by the Bandwidth Barn.
Infonomics points to the success of CITI having a flagship project, in terms of the Bandwidth Barn, to sustain the enthusiasm and energy of the original idea. However, ad hoc funding strategies have diverted some attention away from the core project and CITI has had to pursue a membership-funding model that often sits uneasily with the core purpose of a facilitator.
The report praises the transparency that CITI has exhibited and says this has contributed to good corporate governance and developing trust with the various stakeholders. However, criticism was delivered at the confusion between marketing and research functions with no early study done to determine the size and dynamics of the cluster.
While CITI`s main goal is to help bring prosperity to the Western Cape through IT initiatives, it has linked up with other similar projects on a national scale including The Innovation Hub in Gauteng.
A CITI statement says it is intent on working with collaborators and "great ICT industry minds from all corners of the globe in an effort to raise the international profile of SA as a first-class tourist destination and attractive business location".
UUNet SA reaffirms commitment
The release of the report coincides with UUNet`s announcement that it will continue to support the Bandwidth Barn as it prepares to move into the new Cape Town offices.
"Developing entrepreneurship in the skills-intensive ICT sector is a strategic imperative for both the public and private sector if SA is to achieve sustainable economic growth in an increasingly competitive world economy," says Dave Meintjies, UUNet SA CEO.
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