According to the latest inaugural African Tech Ecosystems of the Future, 2021/22 report by fDi, a division of the Financial Times, South Africa has ranked highly in numerous categories recognising business friendliness, tech innovation, and an established digital startup ecosystem.
South Africa has ranked highly in the latest African Tech Ecosystems of the Future report
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The City of Cape Town Mayco Member for Economies Opportunities, James Vos points out that that the ranking comes as no surprise as Cape Town has experienced exponential growth in the tech startup ecosystem.
“Against the world stage of start-ups, tech development and investment, Africa’s nuanced and turbulent history has created conditions for a slower growth in these areas but fDI’s latest report, powered by Briter Bridges, reveals a positive emerging landscape.
When it comes to ambition, innovation, and creativity in the tech entrepreneurship space, African countries are displaying lively realities tied to enormous potential. Indeed, Cape Town is home to a number of successful start-ups such as Aerobotics, SweepSouth, and Yoco. Recently, Cape Town was named as the third-most ambitious city in the world according to a report by London-based card payment provider, Dojo, and their Global Ambition Index.”
African Tech Ecosystems of the Future 2021/22 report by fDi
According to reports issued by the City of Cape Town, the fFI’s qualifying criteria for participating locations included the following;
- The location must be home to more than 50 startups
- It must have achieved an investment total for 2019 and 2020 which amounts to over $500 000
- Has over nine tech hubs
In the report, qualifying cities/locations were scrutinized over five categories, namely; Economic Potential, Business Friendliness, Human Capital and Lifestyle, Cost-Effectiveness, and Connectivity.
Once in-depth research was done and covered all five of the above-mentioned categories, locations scored up to a maximum of 25 points. This was then weighted by importance against the FDI decision-making process to determine subcategory rankings and general rankings for selected locations.
The report findings
The report ranked South Africa as first in the overall fDi ranking inclusive of Economic Potential, Business Friendliness, and Startup Status.
In the connectivity category, South Africa was ranked second after Nigeria and in the FDI Strategy category, the country ranked second.
Vos provides insight into the attributing factors behind the reports ranking of South Africa and Cape Town.
“Currently, South Africa’s tech ecosystem is thriving. Cape Town is home to Africa’s oldest tech and start-up incubator, the Cape Innovation and Technology Initiative (CiTi), which has been instrumental in supporting over 3,000 entrepreneurs for over two decades. Cape Town offers a highly developed venture capital network, and in 2020 recorded $88-million (R1.2-billion) of investment into the tech sector spanning 46 deals.”
According to reports by the COCT, over 500 operating tech firms were recorded in Cape Town at the end of last year, surmounting to a total of 40 00 employees within these firms.
‘”In the development industry alone, Cape Town accounts for 38% of talent and hosts the highest concentration of developers in the country. As the home to top academic tertiary institutions, Cape Town is well-positioned to attract the right talent to our growing digi-, health- and edu-tech and spheres. Importantly, the City of Cape Town and its Strategic Business Partners (SPB), have created the necessary infrastructure needed for the digital and tech sectors to grow and thrive – including the facilitation needed for the ease of doing business in the city,” adds Vos.
The City of Cape Town has displayed a high level of commitment to supporting the growth of the tech ecosystem as it has worked alongside Strategic Business Partners and the Department of Enterprise and Investment to facilitate R11.27-billion worth of investments during the last six months of 2020.
Featured image: Tim Johnson via Unsplash