Previously disadvantaged face more tech start-up challenges - expert

Cape Town - While tech start-ups generally face the same common challenges as other small businesses, previously disadvantaged members of the tech ecosystem face additional challenges, according to Kerry Petrie, general manager at Silicon Cape, an initiative by local entrepreneurs focused on branding and promoting tech in Cape Town.

Commonly cited challenges for start-ups are usually access to markets, funding and governmental red tape. Previously disadvantaged individuals trying to enter the tech SME sphere face additional challenges like skills deficits, structural inequalities and very limited social capital.

"Many service providers are seeing the need to work with this sector. From the largest legal and financial firms in the country to small, localised consultants, there is value in developing business clients from early relationships," explained Petrie.
Silicon Cape recently held a series of stakeholder dialogues and many participants highlighted the need to have independent, coordinating structures and organisations operating in Cape Town to grow a less siloed, more collaborative and inclusive ecosystem.

"It is important for supporting, enabling organisations like Silicon Cape to coordinate activities that promote mutually beneficial partnerships between stakeholders," said Petrie.

"The verticals in our ecosystem are fairly entrenched, so stakeholders sometimes miss potential in partnerships as there are too few opportunities to cross-pollinate."
There is, therefore, a need for supporting organisations and communication stakeholders to identify and amplify the stories that work as both learning tools and inspiration to entrepreneurs looking for guidance and support, added Petrie.

James Milne, head of Wesgro’s investment promotion team and Boitumelo Menyatswe, Silicon Cape's ecosystem manager, say a coordinated approach between government and the private sector is needed to improve conditions for start-ups.

Wesgro is the official tourism, trade and investment promotion agency for Cape Town and the Western Cape.

Government at all levels needs to focus on creating an enabling environment for start-up growth to ensure that prospective entrepreneurs are not discouraged from the onset by poor regulatory conditions or a lack of critical seed funding, said Wesgro.

"Given global dynamics in technology, if a suitable environment is not available to an entrepreneur, it is possible that the entrepreneur will simply choose to move their business - and the job potential linked to the business - elsewhere," they told Fin24.

Examples of governmental interventions detracting from an enabling environment include intellectual property (IP) exchange controls and to a lesser extent, the current copyright amendment bill.

Milne and Menyatswe emphasise that the private sector can also assist with the development of start-ups by supplying mentorship, supply chain linages and funding.

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