Can Cape Town rival Johannesburg as a business hub? Johannesburg has long been South Africa's main home for business, but Cape Town is trying hard to usurp this position.

Author:Jackson, Tom
Position:Focus
 
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Simbarashe Mabasha and Simukayi Mukuna, co-founders of South African video on demand (VoD) startup Wabona, have run their business from both Johannesburg and Cape Town. And although they are in no doubt of the merits of Johannesburg as a centre of business, there is a belief that Cape Town has something major to offer, particularly to smaller businesses.

The most powerful corporate centre in Africa, Johannesburg generates 16% of South Africa's GDP, employs 12% of its workforce, and houses 74% of corporate headquarters. Between six and eight hours by road away from five other African countries, and less than four by air, it has the benefit of location, and attracts some of the largest infrastructure projects on the continent.

"Johannesburg is one of Africa's economic hubs with a large multicultural work force and market. There is better access to both human and capital resources. Johannesburg is geographically well positioned for access to southern African economies and Africa as a whole. The pace of business is better in Johannesburg," says Mabasha.

Mukuna agrees on Johannesburg's merits in these respects.

"Johannesburg's biggest advantage has got to be the number of large companies that are based in the city. This leads to a large amount of talented people moving to the city," he says.

"The high concentration of talented people in the Gauteng area means you have a large addressable market for a number of goods and services as well as being able to get things done quickly."

But Cape Town has its benefits too. For Mabasha, the size of the city and its well-integrated public transport system make it much easier to get around.

There is a developing tech scene, while, he adds, "the key benefits are access to service-led industries, talent from the University of Cape Town and the University of the Western Cape, and access to some of the hottest tech minds in South Africa."

The government has also assisted in this respect.

"Cape Town provides better infrastructure and investment support for certain industries in particular tourism and technology," says Mabasha. "Johannesburg struggles to provide support for SMEs [small and medium enterprises] as a whole as compared to Cape Town."

Mukuna adds that the lifestyle benefits offered by Cape Town are making it an attractive destination for businesses.

"Cape Town is largely a lifestyle-driven city and you find that established people live in the city [alongside] those who want to raise a family with...

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