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Elon Musk

Silicon Valley network could help boost South Africa

To boost small business and innovation in their own countries, emerging economies should make better use of entrepreneurs from their diaspora — particularly those located in Silicon Valley.

Hundreds of thousands of South Africans live overseas. Professor Jonathan Crush of Queens University in Canada and Cape Town University estimates the South African diaspora to number more than 600 000. Figures by the Migration Policy Institute for 2013 reveal that about 102 000 South Africans are in the US.

So involved are South Africans in the US technology industry that a large proportion of the Silicon Valley Business Journal’s Executive of the Year award winners have been South African, reported SA online magazine Business Tech last month. The head of Tesla Motors Elon Musk (pictured above), as well as the co-founder of Pi Corporation Paul Maritz and the co-founder SolarCity Lyndon Rive are all originally from South Africa.

Other prominent South Africans in Silicon Valley, according to a report by Mail & Guardian include Vinny Lingham, founder of Yola and Gyft; Willem van Biljon, co-founder of Nimbula; and Pieter de Villiers, founder and chief executive of Clickatell, the world’s largest online text messaging service.

Linking up

Diasporas can prove a powerful force. Nowhere is this more clear than with the success of Indian entrepreneurs in Silicon Valley. In 2011 one fifth of all immigrant founders in Californian engineering and technology firms were from India, according to entrepreneurship expert Vivek Wadhwa.

Sean Randolph, president of the Bay Area Council Economic Institute revealed in a 2009 study that Indian entrepreneurs from Silicon Valley are proving a key resource for both countries, “recycling to India much of the energy, creativity and experience that made the Valley a global technology icon”.

South Africa too can capitalise on links with diaspora entrepreneurs too. This is what The Sable Accelerator, a platform founded in 2012 by three South Africans living in Silicon Valley and London hopes to do.

Three three want to help grow South African firms by providing them with the connections, advice and investment they need to take their ideas global.

Some SA companies already linked to Sable include Clickatell, animation studio Triggerfish and wireless base station company Inala Technologies.

Help from government?

Diaspora entrepreneurs can bring new ideas and investment to their home countries and as such some countries are interested in luring them back home.

But support to diaspora entrepreneurs is controversial, notes a 2010 report by the Migration Policy Institute. Non-diaspora entrepreneurs may resent diaspora entrepreneurs who get incentives instead of them, while in countries where the state plays a key role, diaspora entrepreneurs may represent a threat.

As such to attract them back a stable, safe and growing homeland is the best way to encourage diaspora entrepreneurs to return home, argues the report’s authors.

Force of change

But diaspora entrepreneurs can still prove useful to their former countries, without necessarily enticing them to come back home. Entrepreneurs overseas can help give back to their home countries by funding and mentoring new start-ups. For example Lingham helped start Silicon Cape, a group that advocates for ways Cape Town can better support high-growth entrepreneurs.

Diaspora entrepreneurs are well-connected and well-resourced. After all when the Chilean government sought to set up Start-Up Chile in 2010, it was an entrepreneur then in the US – Nicolas Shea – that the Ministry of Economy called upon for help (read more in this article). In the same way South Africa should not neglect it’s Silicon Valley links. They may soon prove a power force of change.


This article originally appeared with the same title on Small Business Insight, a Burn Media publishing partner. It’s been updated accordingly. Stephen Timm writes on small business and is presently in Cape Town, South Africa. Click here to sign up to his monthly newsletter. Follow him on Twitter at @Smallbinsight and on Facebook. Image by JD Lasica via Flickr

Author Bio

Stephen Timm
Stephen Timm writes on small business in emerging economies through his regular blog Small Business Insight. Follow him on Twitter at @Smallbinsight and on Facebook. More