V&A Waterfront is proud of its success as incubator for startups
• Revenue generated by small and medium enterprises rises from R78m to R329m in 11 years
The small business sector has long been regarded as the answer to SA’s chronic unemployment crisis, yet a raft of policy initiatives, funding programmes and support structures have failed to produce the level of thriving entrepreneurial activity required to generate employment at scale.
There are many theories about the causes of the underperformance of the small business sector in SA and the measures that may be required to address them. Sometimes, it is simpler to look for examples of success and replicate them.
When it comes to support for small business and start-up companies, Cape Town’s V&A Waterfront has been a remarkable success by any measure, not least in terms of the exponential growth in revenue from small, medium and micro-sized enterprises (SMMEs). According to an independent economic impact study undertaken by researchers at Stratecon, revenue rose from R78m in 2007 to R329m by 2018.
The study found that growth in this sector has translated into strong employment growth. A recent economic impact study found there were more than 2,800 people gainfully employed in enterprise development, including more than 1,500 working off-site.
The Waterfront has always seen its role as being an incubator for businesses to start up, commercialise their products and mature, providing the footfall and unmatched access to a combination of local and international visitors that enable small retail businesses to flourish. Markets from food to craft and design have been a powerful platform for this growth.
The creation of supportive ecosystems that include training and development support through partnerships with organisations such as the Graduate School of Business, Craft Design Institute and Southern Guild, as well as the Waterfront’s own small business support team, has been a key ingredient for success.
Crucially, these ecosystems cluster complementary enterprises together, creating organic opportunities for productive relationships and chance collisions that spark creativity. Within these ecosystems, structured access to markets provides a route to business growth, giving microbusinesses the opportunity to graduate from operating a stand in a market to opening a retail store of their own or supplying larger corporate tenants.
The international interest in Africa and Cape Town has opened doors to partnerships with other cities and institutions around the world, feeding global best practice into the Waterfront’s strategic thinking, including on enterprise development, and placing it at the leading edge of developing trends.
After the 2010 Fifa World Cup, for example, the Waterfront quickly saw the opportunity to leverage the high-speed broadband then available to develop a hi-tech innovation hub offering free Wi-Fi and co-working spaces to tech startups at Workshop 17. This gave birth to a dedicated physical space to invent, prototype and test emerging products, create new business models and services, and start businesses aligned to African market opportunities.
In a short period it has turned into a vibrant co-working hub for people to work, meet and accelerate ideas for positive social and economic impact. A total 110 start-ups and other firms are now operating there.
Design is another point of focus, capitalising on the wealth of talent and creativity revealed by the Design Indaba and Cape Town’s status as the 2014 Design Capital. These events prompted a reimagining of the existing craft and curio offering and the launch of the Watershed as a platform for local talent and design excellence.
The vision of Wolff Architects to create a covered open-street market bathed in natural light from a 100m skylight married the building’s design aesthetic with its function as a breeding ground for creative endeavour.
The opening in 2018 of the Zeitz Museum of Contemporary Art Africa as a platform for African contemporary art was a natural extension of this vision for the Waterfront as a centre of design excellence and creativity.
Under the curatorship of Trevyn McGowan of Southern Guild, the Watershed offers a broad spectrum of products with different price points and appeals to a wide target market.
Unlike the Victoria Wharf shopping centre, which follows a traditional retail approach, the Watershed retail model is more adaptive, agile and creative, making it an ideal platform for SMMEs and startups The focus is on handmade products from Africa that are not replicas of mass-produced products. Vendors have embraced this philosophy, ensuring that the Watershed remains a vital market that sets the benchmark for African design.
Some tenants, such as Wolf and Maiden, which manufactures premier leather brands, have experienced such strong growth that they have moved into the Victoria Wharf Mall.
Many who have benefited from the development of the Watershed and the V&A’s commitment to enterprise development have come from disadvantaged backgrounds, with poor education and skills. That they produced their own products has created powerful backward economic linkages, which generate income and employment at the Waterfront and at source.
Of the merchandise sold at the Watershed, 91% is made in SA. This maximises the local economic contribution of enterprise development. Having created thriving enterprise development ecosystems for food, craft and design and technology entrepreneurs, the next stage will be to facilitate productive interaction among the ecosystems themselves.
Building on the growing status of Cape Town as an international culinary hub, for example, we see organic produce from the Oranjezicht farmers’ market finding its way into the kitchens of local restaurants and hotels, as they draw on a supply chain that came into being with support from the Waterfront.
There is also an opportunity to position the V&A as a culinary innovation hub, providing a platform for pop-up restaurants and kitchen space rented by the month for trialling innovative food concepts.
THE WATERFRONT HAS SEEN ITS ROLE AS AN INCUBATOR FOR BUSINESSES TO START UP, COMMERCIALISE THEIR PRODUCTS AND MATURE