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Tech start-ups are ready for a national start-up act

The Founders Forum event was an open discussion to explore the idea of South Africa’s first start-up act. Picture: Supplied

The Founders Forum event was an open discussion to explore the idea of South Africa’s first start-up act. Picture: Supplied

Published Jun 6, 2021


AMID challenging times, tech start-ups are calling on the government to fast-track a start-up act that will establish a framework and provide legislative support for how they operate.

This emerged on Thursday during a Founders Forum discussion hosted by tech start-up initiatives AfricArena, SiMODiSA, Silicon Cape, Digital Collective Africa and the City of Cape Town.

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The discussion focused on uniting and aligning tech founders and entrepreneurs within the South African start-up ecosystem.

Matsi Modise, vice chairperson for SiMODiSA, said that a start-up act would help articulate the policies that tech start-ups need to be fully operational in the country.

“We need incentives and we need barriers of entry to be removed because we want our start-ups to be globally competitive and relevant,” Modise said.

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She added: “We have a space for high-impact and high growth tech-enabled businesses but we need an act that guides the government to enable us to do better.”

Modise believes that if start-ups received the necessary support, South Africa’s unemployment rate would not be as high.

“Stats SA has shared that our unemployment rate is at 32.6%. If more people had the support to start and maintain their businesses, this figure might not have been so high.”

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Silicon Cape board director Motlhabane Koloi believed that it was crucial for the public and corporate sectors to find ways to work together, to achieve the development of the act.

“It is also an opportunity for the sector to develop and generate jobs and property that will lead to an increase in economic growth,” said Koloi.

The discussions also addressed ways in which government can fast track the development of this act.

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Frans Cronje, from artificial intelligence company Data Prophet, offered key insights.

“It is critical that the value of what start-ups can bring to South Africa is recognised by policymakers and leadership in government. High-growth start-ups in other African countries are gaining access to substantially more international funding than South African start-ups because of this,” he said.

Silicon Cape, SiMODiSA and Date Prophet all agreed that it was important for all start-ups to be on board in the push for the act.

Modise said: “It is important that we are all aligned and on the same page so that we can receive government buy-in.”

“Technology is a forthcoming sector in South Africa and we need sufficient public engagement with national departments. We need them to liaise on behalf of our industry to craft a policy that feeds our needs,” Koloi added.

According to Modise, having an act set up can take two to three years on average.

The SA Start-Up Act Steering Committee – which includes Silicon Cape, AfricArena and Simodisa – has completed its research, with the help of the World Bank, to present its position paper to Parliament by next month.

AfricaArena founder Christophe Viarnaud said that the sooner there was legislation that protects and regulates start-ups, the better it would be for SA’s entrepreneurial ecosystem.

“We need access to the market, capital and skills. Whenever we approach international companies for funding, we are advised to first place our holding company on another continent.”

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