Townships are the new economy, and offer real opportunities for impact investors, according to Melilizwe Gqobo, co-founder of Hubspace.
Hubspace is a startup co-working hub based in the Khayelitsha township in South Africa’s Western Cape, and provides budding entrepreneurs with business and soft skills training in addition to the office space.
According to Gqobo, the numbers of people and transactions taking place in townships mean that they have a key role to play in the economy, and should be regarded as substantial formal markets.
“Townships are the new economy, believe it or not,” Gqobo said.
“We need to do away with the fact that township entrepreneurs are not regarded as serious. We need to do away with the fact that townships are not regarded as formal markets,” he said, pointing to the fact that 35 per cent of the Western Cape’s GDP is contributed by Khayelitsha.
Gqobo says township entrepreneurs regard their work as their means of living, and as such – given the right facilities – can create businesses of real value.
“These guys are pretty much excluded from the economy, so they had to build their own economy,” he said.
Providing the necessary facilities and support is where Hubspace comes in, Gqobo said, noting that the team environment of the co-working space has a particularly beneficial effect.
“The reason we have a shared office space is it [entrepreneurial success]is all about teamwork,” he said.
According to Gqobo, townships should increasingly be viewed as investment opportunities, but warned that investors need a patient approach as achieving impact can take a matter of years.
“We need to bring in a culture of impact investing and patient capital.”