13 October 2000

Top Story

Successful digital economies have "clusters" or "hot-spots" of related businesses. They feed off each other’s expertise and needs. Africa has almost none of these. South Africa’s Gauteng Provincial Government is bidding to become one by opening an Innovation Hub. Amie Hunter looks at how it plans to attract entrepreneurs.


Early in 2000, the Gauteng Provincial Government (GPG) announced an investment of R147 million over 3 years to establish an Innovation Hub as one of its key Spatial Development Initiative (SDI) projects. The development of this project supports the GPG's economic strategy of promoting Gauteng as the "smart province" in helping both Gauteng and South Africa to become globally more competitive.


"The Innovation Hub will act as a catalyst for the next wave of knowledge-intensive industry growth in the country, and is set to become the preferred address for high-tech start-up companies, as well as leading local and international players seeking to access a prime source of South African skills", according to Gauteng MEC, Mr Jabu Moleketi.


He added that the initiative, which is being developed in partnership with the CSIR/UP Alliance, would enhance the growth of technology-led businesses through "best practice transfer" from both local and international expertise.


Located at the epicentre of economic activity in South Africa, the Innovation Hub will be developed on the world-class research and education knowledge axis between the CSIR and the University of Pretoria (UP). A Memorandum of Understanding has been signed between GPG and the CSIR/UP Alliance and forms the basis for the management of the Hub's development and ongoing operation. In addition to the GPG-allocated funds for the project, the CSIR/UP Alliance has made land available and will support the project with specialised know-how on technology incubation and management.


The objectives of the Innovation Hub are to encourage high-growth, innovation-led and knowledge-based businesses and stimulate and support technological entrepreneurship in the region. The Hub will provide a place where cutting edge technologies can be developed, piloted and demonstrated, and an environment where international businesses can access a regional centre of knowledge creation for mutual benefit.


According to Dr Neville Comins, Innovation Hub project manager, the Hub provides opportunity for participation by a wide range of players. These include anchor tenants (as stakeholders), tenants who wish to act as mentors and lead investors in spin-offs from the Hub or use it as a testing ground for new products and services (Beta site and technology demonstrator), investors such as venture capitalists, infrastructure partners (including GPG and the CSIR/UP Alliance), emerging enterprises such as high-tech entrepreneurs and small start-up companies, and sponsors and funding agencies, such as international funding programmes like the European Union.


The Hub's business activities will consist of business incubation centres and the establishment of the physical and state-of-the-art IT and communications infrastructure; signing up tenants and anchor tenants, as well as start-up and small businesses, traditional enterprises and professional services; entrepreneurial skills development, the creation of special interfaces between education and industry, as well as knowledge brokering and collaboration; technology piloting and demonstration, providing research and development support, as well as mentoring from already established companies.


The concept of the Innovation Hub, of which the Business Incubator will be core, is based on best practice models from around the world. It signifies the birth of the South African high-tech cluster and is a pro-active initiative to stimulate business growth for the country. "It will also strive to attract and stimulate venture capital and foreign investment to the region", said Comins.


"In this way", he added, "the Innovation Hub will provide foreign companies with a gateway to high-tech resources and technology entrepreneurship in Africa, while interaction with international academic institutions will form an important component of Hub activities".


According to Comins, the Hub has adopted an inclusive approach to ensure that a solid basis is established for the detailed planning of the Hub, which will be located on a 30 ha site between the University of Pretoria and the CSIR on the eastern side of Pretoria. "The Innovation Hub should not be seen as a property development, but rather as a significant business stimulant and a new opportunity for research and education to link in with the new way of growing industries in the new economy," Comins said.


The Hub's state-of-the-art ICT infrastructure will attract not only small entrepreneurs and venture capital, but also international companies. "We will build on the good reputations that UP and CSIR have established as research institutions and creators of high-tech business over the years, and will provide an ideal location for commercialising entrepreneurial initiatives created at these organisations", he added, indicating that there is every reason to believe that by working together and creating partnerships and alliances, the Innovation Hub can emulate the success of the internationally well-established hubs, such as those in the US around Boston and other universities.


The development of the first phase, which involves the positioning of access routes and roads, and the provision of IT infrastructures, has already started. Construction of the urban environment and the first of the four buildings, which are being designed to promote a networking culture and be environmentally of low-impact, will commence early in 2001.


The Innovation Hub's high-tech Business Incubator, currently located in temporary premises at the HUB2B, provides hands-on management support and mentoring to high-tech entrepreneurs, helping to accelerate the growth and the success of their companies into financially viable, freestanding firms. "Certainly some of the more important advantages of our Incubator include its close proximity to other entrepreneurs from whom skills and experience can be gained, and a defined and marketable persona in the Innovation Hub, that will enhance the credibility and image of newly formed companies", according to Coen Bester, Innovation Hub Business Incubation manager. "We foresee that our Incubator "graduates" will help to create jobs, stimulate technology-based business development in the region, commercialize new technologies and strengthen the local and national economies", he added.


Over the last year, the Incubator has established relationships with key educational and research institutions in the region, and with leading international organisations like the USA-based National Business Incubation Association (NBIA), according to Bester. The Incubator is also well networked with incubators in the USA, Europe and Israel to facilitate the globalization of the technologies developed by the incubating companies.


The Incubator provides entrepreneurs with rental space and flexible leases, shared basic office services and equipment, technology support services, and assistance in obtaining the financing necessary for growth. The Hub's incubating activities will move to its permanent premises by mid 2002.


Well-developed abilities to learn and to put knowledge to work are the cornerstones of successful innovation, while skilled people, knowledge institutions, knowledge networks, and ICT infrastructures are the building blocks. The Innovation Hub’s Entrepreneur/ Innovator Development Programme will include a wide range of activities to stimulate and enhance the flow of high-tech entrepreneurs to the Innovation Hub.


Operating across all education levels - from primary to postgraduate ­ the Programme aims to interest and excite scholars and students in entrepreneurship and selecting high-tech careers. At the same time, parents and students will be made aware of career options and the benefits of entrepreneurship.


As part of this Programme, the Innovation Hub will develop a Collaborative Laboratory concept, by establishing facilities where students are involved in real-life, real-time projects, to help stimulate their entrepreneurial inclinations. The concept involves the outsourcing of projects by companies to properly equipped laboratories established on the Hub, where students are contracted to work under the leadership of a company manager on assignments on a part-time basis, whilst completing their studies. The first collaborative laboratory, the IT Coach Lab, will open its doors for business early next year.


A key element of the support environment of the Innovation Hub will be its network of participants, investors, supporters and stakeholders, creating both a physical and virtual "Hub Community". The Hub's Enterprise Support Programme is facilitating the creation of this unique environment by providing virtual "single entry point" access to support structures and services and a communications infrastructure that facilitates local and global interactions. The Net@Hub, a virtual and physical network that will act as a portal for the high-technology sector in South Africa, will also serve to create awareness of the Hub’s existence and purpose.


In support of the Innovation Hub’s objective of being the "Home to the High-Tech Entrepreneur", its Special Initiatives Programme is designed to contribute to black economic empowerment by attracting entrepreneurs from previously disadvantaged groups in South Africa. Through this Programme, these young entrepreneurs will be identified at a very early stage of their development and assisted to become participants in the Innovation Hub. Further support will include assistance in securing government business as a first step to business independence and matching them with established businesses for creating partnerships and growth.