Minister Winde Outlines Western Cape Government's Support for ICT Industry
On Wednesday, 9 October, after meeting with several ICT businesses, I can confidently declare that the province has become a breeding ground for a talented crop of tech entrepreneurs and is well on track to become an innovation hub. ICT is one of our priority sectors and employs 30 000 people in this province and contributes R3 billion to our annual GDP.
The Bandwidth Barn has played an active role in supporting ICT entrepreneurship in the Western Cape economy.
Between 2006 and 2010, the Bandwidth Barn tenants and more than 50 successful graduates added more than R800 million per year to the region’s economy and supported almost 2 500 direct and indirect jobs.
There are currently 55 tenants. In 2012/13, various support programmes offered by the Barn provided skills development opportunities for 96 businesses.
According to a study done by the Bandwidth Barn last year, only 48% of ICT start-ups survive for more than three years.
In comparison, 90% of the initial group of SMMEs in the Barn survive beyond this period.
The Barn concept works because entrepreneurs have access to shared services, including professional meeting spaces and conferencing facilities, among others. This decreases their input costs. Input costs are an inhibiting factor for the majority of small enterprises.
There is peer group support, advice from mentors and faster internet at a lower price.
We need to increase the number of businesses that survive beyond the crucial three-year mark to become established enterprises that make a higher contribution to our economy and employ more people.
To assist in reaching this objective over R50 million will be allocated to developing the ICT industry over the next three years.
These funds will be made up of contributions from the Western Cape Government, City of Cape Town, the DBSA Jobs Fund, private sector and the Department of Trade and Industry.
The funds are going towards the development of ICT skills through CapeCITI’s CapaCITI 1000 programme and ICT enterprise development through the Bandwidth Barn.
The CapaCITI 1000 programme sees UCT, CPUT and UWC all providing training opportunities in ICT skills. Some examples are business analysts, IT Infrastructure management and various programming and software development interventions.
This intervention is expected to create over 300 new jobs in the ICT industry over the next three years.
Aside from the Department of Economic Development and Tourism, City of Cape Town and DBSA Jobs Fund, the programme has received money from the INSETA and W&R SETA and numerous private sector contributions through corporate sponsors and participating businesses.
This initiative is a great example of “Better Together” and how, through partnerships, we have been able to make a real difference.
In addition, the Department of Economic Development and Tourism is collaborating with UCT on the development of a post-graduate diploma in software development.
Through this joint programme, we are creating a course that will produce industry relevant ICT skills which will drive job creation and growth in the sector.
While other software development courses exist, the intention of this programme is to run for a shorter period as a post grad diploma rather than a full degree programme.
As we work on these projects to decrease the skills gap in the ICT sector, we also need to create an enabling environment for entrepreneurs. This is why Red Tape Reduction remains one of our most important priorities.
Infrastructure development is another critical component for this industry.
To this end, broadband is an important platform for local information technology services industries, which create youth employment, and promote social inclusion.
The National Broadband policy, approved by cabinet in 2010, states that broadband is a resource for economic growth and jobs – our number one strategic objective in this province.
The World Bank estimates that every 10% increase in high-speed Internet connections in developing countries results in a 1.3% increase in economic growth.
If we aim to create an internationally competitive knowledge economy, improve productivity and enjoy access to new markets, we need to invest far more in fast and affordable broadband infrastructure.
This is why we formulated the Western Cape Broadband Strategic Framework in 2011.
It is my hope that through these initiatives we can create an environment where our entrepreneurs have the necessary skills, support and infrastructure to bring their ideas to life.