Silicon Valley’s Success
September 12, 2018
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September 12, 2018

SA’s Silicon Valley

Is Cape Town a viable option for UK companies looking to outsource their IT and creative work?

With the booming global market for web solutions and design, Cape Town is marketing itself as the African Silicon Valley. The term ‘Silicon Cape’ comes from
an initiative founded in October 2009 by two South African entrepreneurs, Vinny Lingham and Justin Stanford. The project, currently with more than 5,000 members, aims to bring together companies and individuals working in the digital media and creative sectors in Cape Town, putting them under a memorable umbrella term and offering a consistent- ly attractive value proposition in a city with a highly sophisticated infrastructure.

The Silicon Cape brand is striving to create an or- ganic community where local and foreign investors are attracted to companies in Cape Town, with the UK market being a prime target for South African businesses due to the negligible time difference and language barrier, and favourable exchange rate.
Conceptually, Silicon Cape is a voluntary venture run by an astute committee of high tech entrepreneurs who live and work under its name, with the aim of the project to make Cape Town a creative focal point in Africa. The question is, what advantages are there for UK companies looking to outsource IT and web solutions work?

Mark Nagurski, Digital champion of the similar ‘Digital Derry’ initiative in Northern Ireland recently visited Cape Town as part of a trade mission alongside Tom Holmes and his Creativebrief company. He explained that although there is a huge distance between the two countries, “The cost base compares well with other cities, the quality of the work being produced is excellent and we share a lot of common factors including language, time zones and extensive links with the British market”.

Selecting a company to outsource IT and creative work involves several key factors. The financial aspect is obviously important but other advantages are equally desired. Companies in the Silicon Cape not only offer a high quality product at a very competitive price but they also open up further links to the Southern African and Pan-African market place.

A good example of this is Bluegrass Digital’s recent rollout for Dettol in Nigeria, in collaboration with Playhouse communications, a Nigerian- based agency. UK companies can look at using the expertise of Silicon Cape companies to tap into the growing African market, with a potential audience of around 185 million people. Essentially, South Africa becomes the gateway to Sub-Saharan Africa, an area with a predicted GDP increase of 5-6% in the next year.

Regarding the financial advantages of using a Cape Town company, it is apparent that using an SA company to outsource work can save clients up to 50% compared to UK prices, with a possibility of a larger discount should the European economic situation improve and the respective currencies strengthen.

the Innovation and Ideas

There are of course challenges involved in using South African based tech companies. Despite being in the same time zone as Europe, being 6,000 miles away requires detailed workflows, reporting, communication and high levels of client service. Blue-grass Digital has a London office to ensure seamless communication, sometimes a challenge for smaller tech companies without the infrastructure. With the advent of high speed Internet, videoconferencing and a growing number of tech tools for sharing and collaboration, long distance business can be conducted more readily. It is however, important that companies continue to train their staff to proactively avoid specifics lost in digital translation.

Since the 2010 World Cup in South Africa the global recognition of Cape Town as a digital centre has
improved and combined with companies looking for the best value for money in the current economic downturn, the Silicon Cape has the capacity to grow into Africa’s equivalent of the Silicon Valley. It seems that although, in the words of Mark Nagurski, “Every city and region worth its salt is jockeying to become the next big tech centre” Cape Town looks to have nailed the necessary services for companies in the UK and elsewhere to outsource the work they need doing at a reason- able price at the highest standard.

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