International companies such as Amazon and Panasonic are increasingly choosing to headquarter in South Africa as part of their global expansion. With more foreign businesses moving every year, skilled workers have become one of the country’s most sought-after commodities.
Canadian startup CostCertified, which recently opened a local office in Cape Town, said that Cape Town is now one of the fastest growing regions in the world in terms of foreign investment. Citing data from fDi Intelligence, the group noted that the city has become a popular destination for international technology companies, with more than 40,000 people employed in the sector.
In addition to its infrastructure and cost savings, this highlights the country’s most attractive resource for international business – its people.
South Africa offers a high level untapped talent pool for international business. From unemployed graduates and people without any formal qualifications, but with all the relevant social skills and potential, it is easy to build a strong and successful local team,” said Mike Bignold, founder and CEO of CostCertified.
The company, which provides software for housing cost estimating, purchased offices and began the on-site hiring process weeks before anyone from the CostCertified team arrived in South Africa. The entire process, from finding a location to conducting a Zoom interview, was virtual, creating a range of opportunities and challenges.
“We found that some of our candidates were wary of the speed with which they received offers. CostCertified is a dynamic company, and as soon as we decide someone is a good fit, we expedite the hiring process to get to work as soon as possible. For South Africans who are accustomed to four-week recruitment processes at huge firms, this may come as a surprise or seem dubious – but they come to their senses eventually,” he said.
“Our strategy is not just to focus on experience or education, but to get to know our employees better in order to maximize their strengths and value. This gives them the opportunity to significantly accelerate their careers,” Binjold says.
In particular, South Africans are in demand to develop sales and work with clients. Native English speakers in their first and second languages often have neutral accents, making it easier to communicate with clients around the world.
Large multinational corporations such as Amazon and Panasonic have found and exploited this opportunity since 2004, but every year more companies emerge and now companies have to work harder to stand out and attract talent.
“Creating an environment where employees genuinely want to spend their time is an easy and effective way to attract talent, increase productivity, and get positive word of mouth feedback. It’s not about bean bags and ping-pong tables – it’s about making each employee feel like they’re doing purposeful work, learning new skills, and sharing the company’s values,” Bignold said.
Silicon Valley South Africa
A 2021 report from fDi Intelligence, the data division of the Financial Times group, shows that Cape Town is one of the fastest growing regions in the world for foreign direct investment.
The ranking also ranked South Africa first in Africa for economic potential, start-up status and business friendliness.
In addition to receiving the most foreign direct investment (FDI) projects in the software and IT services sector, South Africa also has the second highest number of start-ups after Nigeria.
Cape Town came second to Cairo in FDI strategy after showing impressive initiative in building the necessary infrastructure for a thriving tech ecosystem.
“Outside of Cape Town, the Western Cape boasts a robust technology ecosystem,” said Wesgro, the Western Cape’s official tourism, trade and investment promotion agency.
“The Cape Town-Stellenbosch corridor includes 450 technology firms employing more than 40,000 people, making the ecosystem larger than Nairobi and Lagos combined.”
Other key aspects that make Cape Town “Africa’s Tech Capital” include:
- Tech startups: At the end of 2020, there were 550 technology companies in Cape Town and over 40,000 people employed in the technology sector.
- Investments: In 2020, disclosed investments of $88 million (R1.2 billion) were made in tech start-ups in Cape Town in 46 deals, the highest number of investments made in South Africa.
- Venture firmsA: The Western Cape is home to the largest number of venture capital firms, making it easier for startups to access funding.
- Coworking spaces: The Western Cape has over 30 co-working spaces, the highest in Africa, and 715 free Wi-Fi hotspots in Cape Town alone.
- Developer Talent: Cape Town is home to 38% of all property developers in South Africa, the highest concentration of property developers in the country.
- Coffee culture: Cape Town boasts a deep and varied coffee culture in hundreds of stylish cafes.
- Africa Educational Technology Center: Cape Town has a large number of digital skills training academies and is a preferred location for EdTech companies that create content for organizations and educational institutions around the world.
- Home to four world-class universities: The University of Cape Town has maintained its place as the best university in Africa and Stellenbosch University was ranked 3rd best university in the 2021 Times Higher Education (THE) World University Rankings. Students from all over the world come to study in Cape Town and many are drawn to the growing tech ecosystem.
- Ease of Doing Business: According to the latest World Bank research report, Doing Business in South Africa, Cape Town ranked first among the country’s metropolitan municipalities when it comes to ease of doing business.