A look at South Africa’s Tech Ecosystem

After having examined the technology ecosystem of Uganda and also that of Rwanda, it makes sense that we should look a little further down at one of the continent’s largest economic powers. 

 

Economic Factors 

There are a few things playing in the favor of South Africa. The first we have mentioned and that is the size of the economy. Even if the bulk of the economic power held by South Africa comes out of mining, this economic power does have a major effect in the performance of its digital economy. The massive inflows generated from these vibrant parts of the economy can be used to drive development and innovation in other sectors. Information Communication Technology has the advantage of being one of those cross cutting professions that touches almost all other sectors and can have a positive impact on them all. If you look at the four countries that attract the bulk of venture capital funding in Africa one uniting factor in all of them is economic size. Kenya, Nigeria, South Africa and Egypt are all major players in economic terms and this power generates interest in VC funding. 

Population

The second factor that is important in capturing and keeping interest is population size. If you have the number there is a great chance that you will attract the funding. The numbers are attractive firstly because they represent potential markets, and secondly because of the possibilities of generating pools of talent. 

Education

The factor of population and economic size are both important but rest on the significance of a good educational base. Numbers are great…educated numbers with relevant skills are better. If you look closely at South Africa in general and Cape Town and Johanesburg in particular (both cities feature prominently in the statistics) both are home to world class Universities and institutions University of Cape Town, Stellenbosch University. You will find this pattern repeated almost eveywhere that there is a thriving innovation ecosystem. Silicon Valley is an example with Stanford University and the University of Carlifornia. 

Geography

The other factor is Geography. Whether we like it or not certain geographies seem to be more attractive to creativity and innovation. Maybe there is infrastructure in place that favors the business environment maybe there are shipping routes and ports that favor export. Perhaps it is the altitude maybe it is the closeness to waterbodies. 

Above two South African cities are part of the top ten. 

Clusters

Clusters as defined by Michael Porter are geographic concentrations of interconnected companies and institutions in a particular field. Clusters encompass an array of linked industries and other entities important to competition. They include, for example, suppliers of specialized inputs such as components, machinery, and services, and providers of specialized infrastructure. Clusters also often extend downstream to channels and customers and laterally to manufacturers of complementary products and to companies in industries related by skills, technologies, or common inputs. Finally, many clusters include governmental and other institutions—such as universities, standards-setting agencies, think tanks, vocational training providers, and trade associations—that provide specialized training, education, information, research, and technical support.

In South Africa you could speak of the mining cluster and their own wine cluster. 

For more https://hbr.org/1998/11/clusters-and-the-new-economics-of-competition

South Africa’s Spaces

SmartXchange

We found two major hubs that were mentioned in a page that compared the top ten in Africa. https://www.africanvibes.com/the-top-10-african-tech-hubs/ from the site AfricanVibes. But the list of South African hubs is rather extensive. 

Smartxchange is a Durban technology hub established in 2012 to provide enterprise development support and services in the region. The African tech hub offers this support in the electronics, ICT, and media sectors. SmartXchange partners with corporates from these sectors as well as tertiary institutions and government to upskill youths and entrepreneurs in South Africa.

SMEPlus, Tag Your Delivery, AdNotes, and Mzansi Smart TV are some of the companies that have been supported by SmartXchange. The Durban tech hub provides an online incubation application form on its website. Interested youths and entrepreneurs can apply to become members.

Silicon Cape Initiative

The Silicon Cape Initiative is an ecosystem enabler for tech startups in South Africa. This innovation hub was launched in 2009 to offer an inclusive environment for tech-enabled startups. The African tech hub invites top entrepreneurs and technical talent to assist them in creating world-class startup companies.

Its ultimate goal is to promote the use of technology across different sectors in the Western Cape. Silicon Cape Initiative offers various benefits through its five membership plans. These benefits include tech tours, curated access to the tech ecosystem, access to resources, and more. Interested individuals can select their preferred membership plan online, register, and pay for their membership to join the community.

Silicon Cape is an NPO and an ecosystem enabler for tech-enabled startups in the broader Cape Region of South Africa. They work to connect stakeholders, curate ecosystem data, amplify the stories coming out of the ecosystem and advocate on behalf of stakeholders through their membership programme.

Further reading 

We found a very authoritative writing titled 

THE STATE OF DIGITAL “TECH” HUBS IN SOUTH AFRICA

 

AUTHORS: YOLISA KEDAMA (MM) AND LUCI ABRAHAMS (PhD), LINK CENTRE, WITS UNIVERSITY’S TSHIMOLOGONG DIGITAL INNOVATION PRECINCT.

The authors list

1 MLAB SOUTHERN AFRICA

GAUTENG INNOVATION HUBS/CENTRES

 

2 ALPHACODE CLUB

3 JOZIHUB

 

4 THE INNOVATION HUB

 

5 THOUGHTWORKS

6 TSHIMOLOGONG DIGITAL INNOVATION PRECINCT

WESTERN CAPE INNOVATION HUBS/CENTRES

 7 BANDWIDTH BARN WOODSTOCK AND KHAYELITSHA: CAPE INNOVATION AND TECHNOLOGY INITIATIVE (CITI)

 8 CAPE TOWN GARAGE/88MPH

9 LAUNCHLAB

10 RLABS

11 WORKSHOP 17

KWAZULU NATAL INNOVATION CENTRES/HUBS

12 INVOTECH

EASTERN CAPE INNOVATION CENTRES/HUBS

14 EASTERN CAPE INFORMATION TECHNOLOGY INITIATIVE

Words of warning 

What we found after examining the texts about the work of certain initiatives around innovation was the unwillingness of government to navigate through waters that it, for the moment had no knowledge of. This is true with regards to blockchain technology and cryptocurrencies but also with the bigger innovation landscape. We found that there was little or no support for Intellectual Property in many African settings. Although the connection with companies and educational institutions was a plus (companies and educational intitutions tend to have the infrastrcuture in place to deal with complex IP questions). Although this leaves the entrepreneur in the cold. The solution is for more engagement between the startups, and representatives from government (new technologies and regulation especially with Fintechs) as well as more input from practitioners of intelletual property law (to skill founders with the knowledge they require to be competitive and protected with their innovations).

The value of startups

One of the most important oart of the equation is the startup itself. Without these fledgling companies, the ecosystem would die. The value of the hub and innovation center lies in how many successful startups it has helped nurture. The ability to nurture then defines the hub because then acceleration and incubation services can be added to the mix of services that are offered for the small businesses. 

 

Giant in the making-Rwanda’s Tech Ecosystem Explained

First a little bit of a background. For the last few months i have been planning a trip to Rwanda. Read more about how to plan a trip to Rwanda. This after a friend of mine, Allan Jude Jingo (a Civil Engineer by profession with 20 years of experience) invited me. To ensure a more focused approach and journey what i was planning to do was see if i could create a map of sorts of the technology innovation landscape in the country. When i read online, what i found was information about how Rwanda was well placed to become the hub of development and innovation in Africa. Most of the articles that i read pointed to the importance of what Rwanda called Vision 2020. This is a document that was written to chart the way for technology development in Rwanda. Towards this line of development Rwanda partnered with 

Andela (a leading solutions provider) to train developers in the country. 

In addition to the role of strategic planning in the development of the nation’s technology and innovation ecosystem, i also found important partnerships with groups such as Mara and Volkswagen. The former has a phone assembly and manufacturing center in the country-the first of its kind while the latter has a vehicle assembly plant located in the Special Economic Zone. It is not uncommon to see users of both of these companies services and products. 

For example my host has a Mara Phone as well as a power bank. Additionally, there is a taxi service that local use in the City which uses VW’s as the primary transport vehicles. 

Now your conversation about technology and innovation in Africa is incomplete unless you tackle the big four and their relationship with the development of tech in Africa. By Big Four we are talking about Kenya, South Africa, Egypt and Nigeria. 

These are the four countries that are currently leading the continent in the amount of money that they have attracted to their countries from the hands of venture capitalists.  So part of my article is concerned about how to get Rwanda to that level where they feature on the continental investement map, as well as to compare Uganda and Rwanda in in order to see what Rwanda can learn from Uganda and by extension from the big four. 

From Uganda’s perspective, we covered the various types of spaces that have dominated the landscape in an article that was featured in the Intersection Magazine. But for the benefit of those who did not have the priviledge of reading the piece, we identified Hive Colab and Outbox Hub as some of the early pioneers and how they split their services from hosting of technology enthusiasts (co-working spaces) to the provision of advisory services in financial, legal and business development (incubation) as well as the existance of the input of major players in the national picture such as civil society organizations, private business and more (in innovation competitions). These in our view were some of the most important ideas behind the development of a sustainable ecosystem. 

The idea was simple, provide a space where start-ups can meet and work and learn from each other. Invest heavily in those businesses by providing business development fora in various fields especially those deemed to be important in the health of business. And then finally, create healthy competitive environments with rewards where these small businesses can pitch and meet those in the industry. We mentioned business and CSO’s because these are some of the most important players that determine what types of solutions will emerge and what the needs are in the various fileds that they represent.

Other hubs and co-working spaces have since emerged and are active in Uganda such as Design Hub Kampala located in Industrial Area, Makerere Innovation and Incubation Center, TechBuzz Hub, The Tech Hub, Finding XY and The Work Studio. Even if we mentioned only a few, it is important to have a template that helps us identify what it takes to have an attractive and vibrant ecosystem. 

Now when i did my research on the Internet, another major player came to the fore. This is Norrsken. Norrsken is a Swedish company that has set up the largest Innovation and Business Incubation space in Africa. The place currently has over 200 young people that are using its very well designed facilities and expects to have over a 1000 when fully operational. Norrsken is a Swedish term meaning North Star and that was the sense that i got when i visited the facility. The Northern Star is a companion star for travellers and is the best way to find your way home if you are lost. This is in a nutshell what i believe Norrsken will do for the Ecosystem in Rwanda in particular and Africa (the world) in general. 

What i found when i visted by a site that is fully functional but also still under construction. The team from Norrsken took over a site that formerly host to a popular Rwandese French School and has done a good job keeping many of the structures intact. There are some additional areas of interest such as the attractive pergola and the drive to be sustainable where they have invested in Solar Panels to cover a vast section of the roof to provide power for during the day. In additon, there is a very smart use of both clay and wood to keep that spaces super cool. There is an eating area…one of many on the site designed to keep Rwanda’s finest minds relaxed and in the mood to create. My host at Norrsken, Che G. Rupari, also spoke about some of the great partnerships that are taking pace at the space in FinTech, HealthTech and more on the campus and how for the price of about $80 one can get basic access to the facility for a month. This is a great steal considering the access one would get to all sorts of services as well as the opportunity to partner with other developers. 

So what does Norrksen offer? Well there is a vast co-working space and experience unmatched anywhere in Africa. As well as the opportunity to learn with the leading expert and innovators in fields such as health, finance, management and governance. Top of the line internet speeds for facilites that sre of a global standard with capabilties for voice and video over IP. The possibility of funding for small business ideas directly or indirectly through mentorship and training and much much more.

In addition to Norrksen, i found two other prominent places with important technology footprints in the country. The Office RW and Impact Hub. When we visited the offices of Impact Hub, we also found a sign reading ‘The Office RW’!

Impact Hub prides itself in the ability to bring together disparate groups of people for example Artists and Developers (Technology Entrepreneurs). The building that houses the facilities is large and what stands out the most once you are there is the massive artistic footprint that they have on the neighbothood. Once there we found an event that was being run by Rwanda Build Program. This is a software startup accelerator and social enterprise in Kigali, Rwanda. Its objectives are, To help Rwandan tech startups build a culture of software development that produces a finished product, To Support Entrepreneurism and Software Development in Rwanda, To Support Rwanda teams in reaching the agenda and goals of the Ministry of ICT and other government agencies, To Build and support the 'MurugoCloud' platform, an ecosystem of software services that works together and supports Rwandan developers and their projects. 

I think that one of the most important objectives is the that which links the work of the software teams with the objectives of the government in line with the Ministry of ICT. Towards the question regarding the Ecosystem and the bigger picture, i asked myself afew questions that i will leave for you to ponder. Why are the big four capturing the bulk of the resources and funding as compared to the rest of Africa. Second what role does a business incubation center play in the overrall technology and innovation ecosystem? The same question goes for all the intimate part of the infranstructure that exist and that can be linked to the ecosystem.