ICT

Driving economic development

Cape Town has a sophisticated and well-established ICT and electronics sector, with many of its approximately 1,500 companies competing successfully in global markets. The ICT sector in the Western Cape is dominated by small companies providing ICT services including software development, web development and consulting. The smaller electronics sector is characterised by a handful of generalist companies with strong capabilities in professional electronics, while small to medium enterprises specialise in security systems and electricity pre-payment meters.

The sector is supported by excellent technical skills and world-class fixed and mobile communications infrastructure. Recent changes to the telecommunications regulatory environment are expected to result in substantially lower prices, eliminating a former obstacle to greater investment.

While we acknowledge that our labour rates are higher than those in Asia, the sector’s key competitive advantage lies in its niche areas of expertise. The most significant areas of opportunity are in the following areas:

• Specialist systems and software for the financial services and retail sectors (locally, for the rest of Africa and internationally)
• Application development for the GSM (Group System Mobile) and GPRS (General Packet Radio System)
• ICT Services Outsourcing
• Access Control systems and security equipment
• Silicone processing for fibre optics
• Integrated circuits
• Solar Cells

The Industry in Numbers:

• Economic output of the sector in the Western Cape is close to ZAR3bn, with approximately 30,000 people employed in the sector (about 2.9% of Cape Town employment)
• It is estimated that the market will grow by between 15 to 20% over the next five years (2010 to 2015)
• Foreign Direct Investment in the sector reached ZAR1.9bn in software and IT services, and ZAR123m in electronics between 2004 and 2010

Main Advantages of Investing in the Western Cape in ICT and Electronics

• With three world-class tertiary institutions, the Western Cape has South Africa’s highest percentage of workers with post-school qualifications and technical skills – a number of highly innovative and successful niche companies have emerged from these institutions
• Strong provincial and local government support for the sector, evidenced in a variety of incentives such as the Support Programme for Industrial Innovation (SPII)
• On a local level, the City of Cape Town has adopted a “Smart City” Strategy, aimed at empowering local government to address developmental needs through efficient and accountable ICT – the City has won numerous awards as a result, including the 2002/03 Africa ICT Achiever’s E-Government Award, Gates Foundation Access to Learning Award etc.

Incentives

The incentives offered include the Support Programme for Industrial Innovation (SPII), as well as some R&D incentives for technology design and research. There is also industrial financing and job creation skills funds that can be accessed through the Industrial Development Corporation (IDC) and Development Bank of Southern Africa (DBSA). For more information, please click here to be directed to our incentive brochure, or alternatively contact the portfolio manager listed below.

Contacts

For further information, please contact the Portfolio Manager below:

• Ebrahim Khan - Head: Investment Promotion, Email: ebrahim@wesgro.co.za

Tel: +27 (0)21 487 8600