Silicon Cape Initiative
Encyclopedia
The Cape Silicon Initiative or Silicon Cape is a regional IT
business networking
NGO and community in the Western Cape
, South Africa
.
and Justin Stanford. Both being entrepreneurs and angel investors in the information and communication technologies
start-up sector in South Africa, they observed the unique confluence of circumstances emerging in their home country and in particular in the province of the Western Cape. The name Silicon Cape is based on the technological hub Silicon Valley
in the United States
San Francisco Bay Area
. Whilst the Western Cape cannot be compared directly to Silicon Valley
, it does possess some core organic elements which in its infancy, could be likened to that of Silicon Valley
, California
, USA.
Silicon Cape as a concept was officially launched to the public on October 8, 2009. Attendance for the event was greater than anticipated demand and a new larger venue had to be sourced. At the event there were representatives from schools, universities, start-ups, big business, local and national government, NGOs, and the venture capital
industry. Over a third of the audience was expected to be young IT entrepreneurs. The launch was circulated through social media platforms Facebook
and Twitter
. Speakers included Dr. Johann Rupert
(chairman of luxury goods company Richemont
), Dr. Mamphela Ramphele
(chairperson of the Technology Innovation Agency) and Helen Zille
(premier of the Western Cape). At the launch, The Silicon Cape Foundation non-profit entity was formed by a 10-seat community, and a steering committee was appointed to carry forward the vision of the initiative.
of South Africa
. Its goal is to look to attract top technical talent and entrepreneurs to the Western Cape and to assist these parties in creating "world class" IP
start-up companies in an environment that competes with other similar hubs around the world. Its ultimate goal is to help foster a high-technology district in the Western Cape.
The concept of the Silicon Cape is not owned or controlled by any single entity. It is a living community and an organic, ever-developing concept of the participants, which endeavours to catalyse the local IP entrepreneurial community. Any person globally is able to take advantage of the Silicon Cape network through the social networking platform of Silicon Cape.
, the CEO of SEACOM who stated that the next “Google
” could and should be coming out of Africa.
), the Silicon Cape received a large amount of press release from South Africa’s leading online publications. The following statistics were reported by the 6 April 2010:
In March 2011, Google
announced the launch of Umbono (Zulu, for "vision"), a business incubator, and opened applications for venture capital of up to $50,000 as well as free internet and office space to existing and potential start-up companies. It announced that it would be collaborating with Silicon Cape and Bandwidth Barn, a regional business incubator. Google's South African country manager, cited Yola
, Mxit
and Twangoo as successful start-up companies which showed signs of development in the IT industry in the Western Cape.
Silicon Cape was an instrumental tool used for the establishment of a crowd funding
network, an angel investor network that was established by Silicon Cape participants.
to enable growth in start-up companies.
At the launch of Silicon Cape, Johann Rupert
stated, "we need a financial centre in the Western Cape and an IT centre that is tax neutral, where intellectual property is protected, and the Cape will flourish.". He emphasised the value of intellectual property given that the Western Cape does not have any raw resources which it can export. He further noted on the greater economy of South Africa, "we cannot survive if we rely on the export of raw materials. In the future, countries that are not net exporters of intellectual capital will not survive."
The imposition of exchange controls in South Africa, although eased in recent years, also obstructs growth in the IT sector of the region because local businesses are prohibited from trading in foreign currency and using e-commerce services such as PayPal
on their local sites. On March 18, 2011, it was ruled by the Supreme Court of Appeal
that "exchange control approval" is not required when transferring ownership of intellectual property to a non-resident. Although no amendment to the present regulations has been made.
Other challenges include a perceived lack of skills in South Africa, a lack of large anchor corporates that provide management training, a lack of professional services firms available and affordable for the start-up market and lack of capital structures through angel funding networks.
South Africa, and the Western Cape may struggle as a region in driving to the Silicon Cape Initiative due to “profitable patriotism”
Other regions of South Africa such as Gauteng
have felt isolated from the Silicon Cape Initiative which has focused on the Western Cape as a region.
Information technology
Information technology is the acquisition, processing, storage and dissemination of vocal, pictorial, textual and numerical information by a microelectronics-based combination of computing and telecommunications...
business networking
Business networking
Business networking is a socioeconomic activity by which groups of like-minded businesspeople recognize, create, or act upon business opportunities. A business network is a type of social network whose reason for existing is business activity...
NGO and community in the Western Cape
Western Cape
The Western Cape is a province in the south west of South Africa. The capital is Cape Town. Prior to 1994, the region that now forms the Western Cape was part of the much larger Cape Province...
, South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...
.
Background and launch
The Silicon Cape Initiative is a private sector community movement that was originally founded by two South African high-tech entrepreneurs, Vinny LinghamVinny Lingham
Vinny Lingham is a South African Internet entrepreneur and the founder and CEO of Yola, Inc. , a San Francisco-based Web 2.0 start-up that provides free website building, publishing and hosting services. He is also the co-founder of SiliconCape.com, an NGO based in South Africa that aims to turn...
and Justin Stanford. Both being entrepreneurs and angel investors in the information and communication technologies
Information and communication technologies
Information and communications technology or information and communication technology, usually abbreviated as ICT, is often used as an extended synonym for information technology , but is usually a more general term that stresses the role of unified communications and the integration of...
start-up sector in South Africa, they observed the unique confluence of circumstances emerging in their home country and in particular in the province of the Western Cape. The name Silicon Cape is based on the technological hub Silicon Valley
Silicon Valley
Silicon Valley is a term which refers to the southern part of the San Francisco Bay Area in Northern California in the United States. The region is home to many of the world's largest technology corporations...
in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
San Francisco Bay Area
San Francisco Bay Area
The San Francisco Bay Area, commonly known as the Bay Area, is a populated region that surrounds the San Francisco and San Pablo estuaries in Northern California. The region encompasses metropolitan areas of San Francisco, Oakland, and San Jose, along with smaller urban and rural areas...
. Whilst the Western Cape cannot be compared directly to Silicon Valley
Silicon Valley
Silicon Valley is a term which refers to the southern part of the San Francisco Bay Area in Northern California in the United States. The region is home to many of the world's largest technology corporations...
, it does possess some core organic elements which in its infancy, could be likened to that of Silicon Valley
Silicon Valley
Silicon Valley is a term which refers to the southern part of the San Francisco Bay Area in Northern California in the United States. The region is home to many of the world's largest technology corporations...
, California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
, USA.
Silicon Cape as a concept was officially launched to the public on October 8, 2009. Attendance for the event was greater than anticipated demand and a new larger venue had to be sourced. At the event there were representatives from schools, universities, start-ups, big business, local and national government, NGOs, and the venture capital
Venture capital
Venture capital is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as...
industry. Over a third of the audience was expected to be young IT entrepreneurs. The launch was circulated through social media platforms Facebook
Facebook
Facebook is a social networking service and website launched in February 2004, operated and privately owned by Facebook, Inc. , Facebook has more than 800 million active users. Users must register before using the site, after which they may create a personal profile, add other users as...
and Twitter
Twitter
Twitter is an online social networking and microblogging service that enables its users to send and read text-based posts of up to 140 characters, informally known as "tweets".Twitter was created in March 2006 by Jack Dorsey and launched that July...
. Speakers included Dr. Johann Rupert
Johann Rupert
Johann Peter Rupert is the eldest son of the late South African business tycoon Anton Rupert and his wife Huberte Rupert. He is the chairman of the Swiss-based luxury-goods company Richemont as well as of the South Africa-based company Remgro...
(chairman of luxury goods company Richemont
Richemont
Compagnie Financière Richemont S.A. is a Swiss luxury goods holding company founded in 1988 by the South African businessman Johann Rupert. Richemont categorizes its businesses into four areas: jewellery, watch making, writing instruments and other, which encompasses clothing and firearms. The...
), Dr. Mamphela Ramphele
Mamphela Ramphele
Mamphela Aletta Ramphele is a South African academic, businesswoman and medical doctor and was an anti-apartheid activist. She is a current trustee on the board of the Rockefeller Foundation in New York.-Life and career:...
(chairperson of the Technology Innovation Agency) and Helen Zille
Helen Zille
Helen Zille is the Premier of the Western Cape, a member of the Western Cape Provincial Parliament, leader of South Africa's opposition Democratic Alliance political party, and a former Mayor of Cape Town.Zille is a former journalist and anti-apartheid activist, and famously exposed the truth...
(premier of the Western Cape). At the launch, The Silicon Cape Foundation non-profit entity was formed by a 10-seat community, and a steering committee was appointed to carry forward the vision of the initiative.
The Silicon Cape Initiative
The vision of the Silicon Cape is to be an organic ecosystem that functions in the Western CapeWestern Cape
The Western Cape is a province in the south west of South Africa. The capital is Cape Town. Prior to 1994, the region that now forms the Western Cape was part of the much larger Cape Province...
of South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...
. Its goal is to look to attract top technical talent and entrepreneurs to the Western Cape and to assist these parties in creating "world class" IP
Intellectual property
Intellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...
start-up companies in an environment that competes with other similar hubs around the world. Its ultimate goal is to help foster a high-technology district in the Western Cape.
The concept of the Silicon Cape is not owned or controlled by any single entity. It is a living community and an organic, ever-developing concept of the participants, which endeavours to catalyse the local IP entrepreneurial community. Any person globally is able to take advantage of the Silicon Cape network through the social networking platform of Silicon Cape.
I.T. Ideas and Entrepreneurs
Silicon Cape aims at assisting people with I.T. ideas and entrepreneurs to avoid the many pitfalls associated with I.T. start-ups in South Africa. Entrepreneurs in South Africa face many obstacles including access to finance, punishment for previous failure, lack of global experience, no liquidity events and others. The potential of entrepreneurs and I.T. visionaries for the African continent is starting to make an emergence and has been recognised, including by Brian HerlihySAT-3/WASC (cable system)
SAT-3/WASC or South Atlantic 3/West Africa Submarine Cable is a submarine communications cable linking Portugal and Spain to South Africa, with connections to several West African countries along the route. It forms part of the SAT-3/WASC/SAFE cable system, where the SAFE cable links South Africa...
, the CEO of SEACOM who stated that the next “Google
Google
Google Inc. is an American multinational public corporation invested in Internet search, cloud computing, and advertising technologies. Google hosts and develops a number of Internet-based services and products, and generates profit primarily from advertising through its AdWords program...
” could and should be coming out of Africa.
Success
The Silicon Cape Initiative was very well received by the local community. Although there was no marketing budget or spend (the initiative was driven by word of mouthWord of mouth
Word of mouth, or viva voce, is the passing of information from person to person by oral communication. Storytelling is the oldest form of word-of-mouth communication where one person tells others of something, whether a real event or something made up. Oral tradition is cultural material and...
), the Silicon Cape received a large amount of press release from South Africa’s leading online publications. The following statistics were reported by the 6 April 2010:
- 560 conversations discussing Silicon Cape
- Brand momentum: 43.077 mentions a day
- Most discussion was on Twitter (91%)
- 97.297% of conversation positive
- 557 175 opportunities to be seen (OTS)
In March 2011, Google
Google
Google Inc. is an American multinational public corporation invested in Internet search, cloud computing, and advertising technologies. Google hosts and develops a number of Internet-based services and products, and generates profit primarily from advertising through its AdWords program...
announced the launch of Umbono (Zulu, for "vision"), a business incubator, and opened applications for venture capital of up to $50,000 as well as free internet and office space to existing and potential start-up companies. It announced that it would be collaborating with Silicon Cape and Bandwidth Barn, a regional business incubator. Google's South African country manager, cited Yola
Yola (webhost)
Yola is a website builder and website hosting company headquartered in San Francisco. People without programming skills and a limited knowledge of HTML and graphic design can make web sites using Yola. Its drag and drop system allows users to incorporate widgets without knowing HTML. Yola also...
, Mxit
MXit
MXit is a free instant messaging application developed by MXit Lifestyle Ltd. in South Africa that runs on multiple mobile and computing platforms...
and Twangoo as successful start-up companies which showed signs of development in the IT industry in the Western Cape.
Silicon Cape was an instrumental tool used for the establishment of a crowd funding
Crowd funding
Crowd funding describes the collective cooperation, attention and trust by people who network and pool their money and other resources together, usually via the Internet, to support efforts initiated by other people or organizations...
network, an angel investor network that was established by Silicon Cape participants.
Criticisms and challenges
Advocates of Silicon Cape have argued that in order to attract investors to the Western Cape, local and national government should create a tax free zoneFree trade zone
A free trade zone or export processing zone , also called foreign-trade zone, formerly free port is an area within which goods may be landed, handled, manufactured or reconfigured, and reexported without the intervention of the customs authorities...
to enable growth in start-up companies.
At the launch of Silicon Cape, Johann Rupert
Johann Rupert
Johann Peter Rupert is the eldest son of the late South African business tycoon Anton Rupert and his wife Huberte Rupert. He is the chairman of the Swiss-based luxury-goods company Richemont as well as of the South Africa-based company Remgro...
stated, "we need a financial centre in the Western Cape and an IT centre that is tax neutral, where intellectual property is protected, and the Cape will flourish.". He emphasised the value of intellectual property given that the Western Cape does not have any raw resources which it can export. He further noted on the greater economy of South Africa, "we cannot survive if we rely on the export of raw materials. In the future, countries that are not net exporters of intellectual capital will not survive."
The imposition of exchange controls in South Africa, although eased in recent years, also obstructs growth in the IT sector of the region because local businesses are prohibited from trading in foreign currency and using e-commerce services such as PayPal
PayPal
PayPal is an American-based global e-commerce business allowing payments and money transfers to be made through the Internet. Online money transfers serve as electronic alternatives to paying with traditional paper methods, such as checks and money orders....
on their local sites. On March 18, 2011, it was ruled by the Supreme Court of Appeal
Supreme Court of Appeal of South Africa
The Supreme Court of Appeal is an appellate court in South Africa; it is the highest appeal court except in constitutional matters, which are ultimately decided by the Constitutional Court...
that "exchange control approval" is not required when transferring ownership of intellectual property to a non-resident. Although no amendment to the present regulations has been made.
Other challenges include a perceived lack of skills in South Africa, a lack of large anchor corporates that provide management training, a lack of professional services firms available and affordable for the start-up market and lack of capital structures through angel funding networks.
South Africa, and the Western Cape may struggle as a region in driving to the Silicon Cape Initiative due to “profitable patriotism”
Other regions of South Africa such as Gauteng
Gauteng
Gauteng is one of the nine provinces of South Africa. It was formed from part of the old Transvaal Province after South Africa's first all-race elections on 27 April 1994...
have felt isolated from the Silicon Cape Initiative which has focused on the Western Cape as a region.