Cape entrepreneurs lead the way in SA
September 4, 2008
By Tom Robbins
Cape Town - Despite the high-paced business life in the financial capital of Johannesburg, Capetonians are more entrepreneurial than their northern counterparts, according to research conducted by the Global Entrepreneurship Monitor (GEM).
In terms of early-stage entrepreneurial opportunity activity, the Mother City's rating was a "massive" 190 percent greater than the national average, GEM said yesterday.
Of the countries surveyed, this was the highest difference between a city's rating and its national average.
Mike Herrington, the director of the University of Cape Town Centre for Innovation and Entrepreneurship, said this meant more Capetonians of working age were taking advantage of business opportunities.
"This finding suggests that Cape Town has a much higher level of knowledge, innovation and opportunity than elsewhere in the country," he said.
By the same measure, Johannesburg's activity level was 60 percent higher than the national average.
The measure includes people who start a business due to an opportunity and those who do so as a last resort.
Despite leading the way in South Africa, Cape Town ranked only fourth of the 34 global cities surveyed, compared with Johannesburg's 22nd place, GEM said.
Both cities fell short when it came to using the latest technology in business ventures. Only 5 percent did so in Cape Town and 6 percent in Johannesburg.
This was markedly lower than the level in developed countries, where the proportion was 48 percent or more.
"This means it is less likely that local entrepreneurs are creating world class products or services that can compete internationally."
Both cities also performed badly when it came to product innovation, indicating more of a "copycat" mentality than a creative class of start-ups.
In addition, Cape Town was poor at creating jobs in start-ups. Only 15 percent expected to have 10 employees or more after five years in business.
Herrington said this was perhaps the most worrying statistic when Cape Town's high unemployment rate was taken into account.
Cape Town ranked higher than Johannesburg in terms of perceived confidence among entrepreneurs to start a business.
Bangkok led the way in early stage entrepreneurial activity of the cities surveyed, followed by Buenos Aires. Auckland, a favourite South African emigration destination, was third. Melbourne and Sydney were both in the top 10.
Some highly developed cities fared poorly. Tokyo was last, trailing Hong Kong, Milan and Paris.
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