The 8th Innovation Summit took place at the Cape Town Stadium on August 26 and 27 2015
The African continent is taking great strides to redefine itself as one of the world’s major economic players. Increasingly, there is more interest in the continent from economic powerhouses such as China and the US due to the huge economic prospects Africa offers.
There are two dynamics at work in driving this significant growth. Firstly, the worldwide demand for commodities and resources. Secondly, small, medium and micro-sized enterprises (SMMEs) are driving economies, contributing to country’s GDP and creating employment for hundreds of thousands of people. The most innovative and entrepreneurial people are those thinking beyond the bounds of convention.
However, there is a high failure rate among many start-up businesses, which is largely due to a lack of access to finance and other means of business support. Many entrepreneurs also fail to take their businesses to the next level due to a lack of resources, no business expertise and little experience. To address these and other problems, mentorship and sponsorship programmes and support services for entrepreneurs and start-ups are critical to bridge the gap between a business start-up and its continued growth.
The development of the SMME sector is absolutely critical for the economic development and transformation of the African continent. SMMEs are increasingly pushed to innovate under the pressure of the economic climate and the search for potential revenue streams, and consequently they’re likely to be at the forefront of innovation, unlike their more mature counterparts.
It is imperative to support entrepreneurial SMME businesses that, with the right business advisors, can mature and grow. For the past two years, PwC has been working with some leading entrepreneurs and individuals in Cape Town’s tech ecosystem. In 2013 the firm opened an office at the Bandwidth Barn.
In 2014 PwC launched its Vision to Reality Awards programme in collaboration with the City of Cape Town, Wesgro, UCT GSB, the CITi Bandwidth Barn initiative and World Design Cape Town. Designed to celebrate innovation and leading-edge technologies, the programme recognises and honours organisations whose outstanding achievements have made them some of South Africa’s most successful technology companies.
PwC has also collaborated with the SA Innovation Summit for the 2015 Vision to Reality Awards programme and uses the SA Innovation Summit PwC Pitching Den as the platform for the top 20 Vision to Reality finalists to pitch. The SA Innovation Summit provides a platform for the finalists to make commercial connections with funders, global investors, marketers, intellectual property lawyers and distribution channels. The summit brings together a unique mix of innovation enablers to create a conducive environment for our finalist pitchers.
After carefully assessing a record number of entries, 20 finalists were recently identified in the Vision to Reality Awards programme by an independent judging panel to advance to the final round of the competition. The top 20 finalists have been narrowed down from a list of more than 80 companies throughout Africa.
The overall winner of the 2015 Vision to Reality awards programme will attend and present at the global PwC Accelerator conference, where PwC’s Accelerator team showcases the flagship companies selected by PwC’s Accelerator worldwide to enhance their visibility and credibility, boost their professional reputation and introduce them to potential partners who can help them with their internationalisation strategy.
The PwC Accelerator Africa, a separate PwC service line and one of 25 global PwC Accelerators, assists emerging companies with their specific “building blocks” and growth needs in their quest to become national and global leaders. As their independent and trusted advisor, the PwC Accelerator is committed to assist in providing privileged access to the most relevant markets, the best international talents, and the most appropriate financing solutions.
By leveraging PwC’s (inter)national network and extensive competences, adapted to the emerging company chief executive’s way of working, the PwC Accelerator effectively accelerates the growth of emerging companies.
Recently, PwC together with Silicone Cape Initiative and Microsoft BizSpark launched an extensive campaign inviting emerging businesses and entrepreneurs to participate in its upcoming publication Emerging Companies Insights, aimed at better understanding South Africa’s entrepreneurial landscape. We received responses from 700 emerging companies. Participating companies ranged from early stage to approximately R100-million revenue per annum, and investors’ and other ecosystem stakeholders’ views were also obtained.
The publication focuses on several themes, some common, some new and some surprising. The negative talk about the current state of South Africa’s economic affairs also got attention due to some underpinning “doom and gloom” statistics: South Africa is perceived to be lagging behind other developing countries in certain statistics such as a low rate of established businesses, an unsupportive overall business environment and a high rate of business failures.
One of the questions the publication asks is: “How to turn the current negative sentiment around and put South Africa’s economy ‘back on track’ to a sustainable economic and employment growth path?” Part of the answer is simple, in theory: make entrepreneurship work, with the collaboration and support of other entrepreneurial ecosystem stakeholders. Entrepreneurship is all about transforming ideas into economic opportunities and requires holistic support from all ecosystem stakeholders to thrive.
Despite a lot having been said about equal rights for women in business, the South African statistics for technology-enabled companies are still disheartening: the number of female founders made up a minority of total founders. Global research points to better results for companies with a balanced representation of women board directors.
Fortune 500 companies with the highest representation of women board directors attained significantly higher financial performance, on average, than those with the lowest representation of women board directors. Arthur Goldstuck in the SMME survey found that, although a minority, small businesses owned by women have a better chance of being profitable than those owned by men. But South Africa still has a long way to go in increasing women’s visibility and impact in business overall.
The publication produced some other key findings. By digging deeper into some of the more commonly seen themes, a number of myths were debunked around funding, red tape and growth inhibitors. Emerging Companies Insights will be released at the SA Innovation Summit on August 28 2015.
Entrepreneurship is the answer to many of Africa’s challenges. Across the continent we need innovation, new ideas and creativity. Ultimately, the time is ripe for entrepreneurs and start-ups to change the way in which business is conducted across the African continent.
Danie Fölscher is PwC’s Partner in charge of the Western Cape