Western Cape Business 2017 edition

OVERVIEW Information and

OVERVIEW Information and communications technology Cape Town is attracting ICT investment. Providing better and broader access to broadband is a key priority for the Western Cape. The provincial government has identified the issue as an economic enabler that will act as a catalyst for growth across several economic sectors. There are 2 000 ICT firms in the Western Cape and they have 17 000 employees. Private companies Link Africa and Fibrehoods are rolling out highspeed connections via fibre-optic cables to residential addresses. As part of the contract, Fibrehoods must supply the city with a line for the use of public institutions. A group of entrepreneurs, investors and developers has created the non-profit Silicon Cape Initiative which aims to support the burgeoning sector. Just one of its groups, the Startup Group, has 425 members and it offers advice and support. The Cape Innovation and Technology Initiative (CiTi) is another support system for the ICT sector. The Bandwidth Barn (shared office space in Woodstock) is one of three initiatives run by CiTi. The others are VeloCiTi (enterprise and entrepreneur development) and CapaCiti (tech skills and job placement). The University of Cape Town claims a 90% placement rate for CapaCiti and more than 400 graduates. CiTi collaborates with two departments of the Western Cape provincial government, Oracle and On The Ball College to present the Java Schools Programme, which promotes programming. Barclays Bank has invested in a fintech incubator in Cape Town, Rise. The building has an auditorium, meeting and conference rooms but the main idea is to create a community of thinkers and developers. Banks are keen to stay ahead of the game and there are six other Rise incubator locations around the world, including New York and Mumbai. It was a banking application (app) that won the IT Challenge presented by Standard Bank in 2015. Three students from the University of the Western Cape created a voice-activated online banking app, ONLINE RESOURCES Cape Innovation and Technology Initiative: www.citi.org.za Independent Communications Authority: www.icasa.org.za Silicon Cape: www.siliconcape.com State Information Technology Agency: www.sita.co.za SECTOR INSIGHT Silicon Cape is a catalyst for tech in the Western Cape . which they called EasyBank. The challenge was to use and adopt the Amazon Echo app. French Tech Labs was launched as a fintech incubator at Century City in November 2016. The same company earlier established Methys Labs. The new incubator will offer mentoring support for innovators, connections to possible investors and a programme where selected candidates will travel to France for work opportunities. There is no business sector less in need of a geographic home than ICT but a section of Cape Town is developing into a Silicon Valley: Marconi Beam/ Century City. DVT’s app-testing facility is immediately south of that location (just off the N1 at Northgate Island) so perhaps this is the home of Western Cape ICT. Wembley Square and nearby buildings in Gardens might be another candidate, where Amazon Development Centre is a core tenant. WESTERN CAPE BUSINESS 2017 120

Business process outsourcing Offshoring – foreign BPO contracts – is growing fast. OVERVIEW The South Africa business process outsourcing sector has consistently won international awards for the work it does for international companies and 2016 was no exception. The Global Sourcing Association (previously National Outsourcing Association) capped South Africa as the “Offshoring Destination of the Year” for 2016 in London in November. BPO involves any internal business function that a company chooses to outsource to a specialist in that field, for example accounting or call centres (also known as customer service centres). One interesting example relates to loading an aeroplane’s freight load – in Frankfurt! The loader does this in the Western Cape via remote cameras and weighing machines. After work the loader can visit the beach. Offshoring refers to BPO that is done across international borders. Cape Town is a leader in the field. A City of Cape Town report gave the BPO contribution to provincial GDP in 2014 as approximately R9-billion. The national Minister of Trade and Industry, Rob Davies, says that the local BPO sector has had compounded growth since 2012 of 25% year-on-year. There are approximately 30 000 jobs nationally with the top market being the UK. Within the Western Cape sector, 63% of companies are involved in inbound customer service work; back office accounts for 13.8% and debt collection at 9.1%. UK shop Asda and online retailer Amazon have large customer service centres in Cape Town. The fact that greater Cape Town is home to three well-regarded universities, a university of technology and two technical colleges is a major advantage in attracting companies with sophisticated operations, such as BPO. A director of a British business intelligence ONLINE RESOURCES Business Process enabling South Africa (BPeSA): www.bpesa.co.za National Department of Trade and Industry: www.dti.gov.za Wesgro: www.wesgro.co.za SECTOR INSIGHT Incentives are on offer to BPO investors. • South Africa’s BPO sector won a 2016 global award. company that has operations in Cape Town, S-RM, says the that Cape Town’s position as a “knowledge nexus” was a major factor in deciding to open an office in the city. Other factors in favour of Cape Town are the relatively neutral accents, good infrastructure (financial and telecommunications) and the time zone being the same or close to Europe’s. The Department of Trade and Industry (dti) offers some incentives to BPO investors. A base incentive is calculated on projected offshore jobs to be created and is awarded on actual offshore jobs created. The incentive has a two-tier structure for non-complex and complex jobs and is paid over a five-year period. A bonus incentive becomes payable at the end of the five-year period. 121 WESTERN CAPE BUSINESS 2017