Funding security, staffing, skills are main challenges for SA tech hubs

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The biggest challenges being faced by tech hubs in South Africa are around funding security, under-staffing and a lack of local specialised skills, according to new research.

The UK-South Africa Tech Hub, a UK government initiative delivered by the British High Commission, has conducted research into the challenges and needs of tech-focused entrepreneur support organisations, or hubs, across South Africa.

The research – full report here – consisted of a survey involving organisations from six provinces that are running physical, tech-focused entrepreneurship hubs in Durban, Port Elizabeth, Mahikeng, Pretoria, Kimberley and Polokwane; as well as satellite hubs in surrounding townships and peri-urban areas. Hubs in the well-researched cities of Cape Town and Johannesburg were excluded from the research. These hubs provide programmatic training, mentorship, business services and facilities for local entrepreneurs.

The survey revealed that the biggest challenges being faced across all hubs are around funding security – 45 per cent of hubs saw a drop in revenue in 2020; under-staffing – 55 per cent of respondents identified under-staffing as a key challenge; and lack of local specialised skills, with 36 per cent of respondents saying that incorrectly skilled staff was a key challenge. Recruiting women entrepreneurs for programmes remains a common challenge.

Despite the challenges, these hubs play a crucial role in developing local economies, and especially engaging local youth and women in entrepreneurial activities. The respondent hubs have collectively supported 2,000 South Africans entrepreneurs over their lifetime, mostly youth entrepreneurs and at least 50 per cent women at the idea- to early-stage. 

Yet, the South African hub community remains largely disconnected, with few opportunities to share and learn collectively. There is still a great need for further private and public financial and non-financial support for these crucial organisations. Seventy-three per cent of the hubs surveyed feel that there is not enough support for entrepreneurs in their area, and 55 per cent feel that there is not enough support for their hub from local ecosystem actors.

“We wanted to better understand what these hubs were doing, and how we can strengthen their activities with entrepreneurs. Through our Launch League Hubs initiative, we aim to connect and capacitate digitally-focused entrepreneur support organisations to allow them to build more inclusive and vibrant local ecosystems,” said Shirley Gilbey, director of the UK-South Africa Tech Hub.

“Although youth unemployment is unfathomably high, 82 per cent of South Africans now view entrepreneurship as a viable career choice. Our intention with these projects is to bolster existing efforts by hubs to support young South African entrepreneurs to launch a business and change their future.”

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Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent's most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.

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