Cape Town and Johannesburg are beginning to mirror Silicon Valley, the world-famous US hub for technology heavyweights like Apple and Meta.
According to Sandton-based wealth intelligence New World Wealth, tech and financial services are the key sectors in South Africa when it comes to generating new wealth.
New World Wealth and local software developer Platform45 recently teamed up to review the top tech hubs of the future.
Platform45 founder and CEO Shaun Richards believes technology is redefining the global landscape of innovation by elevating traditional tech hubs and enabling new ones to emerge. He believes Cape Town, Johannesburg and Nairobi in Kenya have the potential to lead Africa’s tech revolution in the future.
“As African cities like Cape Town, Johannesburg and Nairobi begin to mirror Silicon Valley, technology acts as the ultimate connector, shifting the balance of influence and creating opportunities for new centres of innovation,” he said.
“This ongoing transformation underscores how technology continually reshapes what it means to be a major player on the global stage. Ultimately the world is a big place, amplified by technology and subsequently made accessible by it.”
According to the “Africa Wealth Report 2024”, Africa’s millionaire population is set to rise by 65% in the next decade, fuelled by strong growth in key sectors such as fintech, software development and green tech.
As the “leading light in Africa’s fintech space, Cape Town is currently benefiting from the inward migration of large numbers of tech entrepreneurs from other parts of Africa”. Notable tech companies based in the city include Yoco and Takealot.com.
Johannesburg is “the base city for the bulk of the companies listed in the JSE Top 40 and is especially strong when it comes to IT infrastructure, tech support and software development. The business nodes of Sandton and Rosebank are particularly popular base locations for tech start-ups in Johannesburg,” said Richards.
“East Africa’s fintech engine room, Nairobi, accounts for a high 48% of Kenya’s total wealth and over 60% of the country’s millionaires. Its dominance in the East Africa region also makes it the perfect base to operate in fast-growing emerging markets such as Rwanda, Uganda and Tanzania.”
Why South Africa as an innovation incubator? The answer lies in our unique position at the crossroads of the developed and developing worlds
— Shaun Richards, Platform45 founder and CEO
Mauritius is also on the radar of tech gurus, thanks to its thriving financial services sector, strong tech infrastructure, competitive tax rates and, critically, good safety and security compared to its neighbours.
“Mauritius is perfectly positioned to become Africa’s next big tech hub. The lack of capital gains tax on the island makes it especially appealing for tech entrepreneurs.”
Andrew Amoils, New World Wealth’s head of research, said tech is one of the key sectors when it comes to creating new wealth in South Africa.
“We expect over 30% of South African wealth to be from the tech sector by 2045. It now stands at about 8%,” he said.
In December Johannesburg had more than 800 tech US dollar millionaires, while Cape Town had more than 450, said Amoils.
“Why South Africa as an innovation incubator? The answer lies in our unique position at the crossroads of the developed and developing worlds,” said Richards. “We face challenges that demand innovative solutions, yet we have the infrastructure to support cutting-edge technology development.
“This duality creates a perfect testing ground for disruptive technologies. Our diverse population provides invaluable insights into how solutions can be adapted for different communities and contexts.”
He said South Africa embodies resilience and adaptability — “qualities essential for technological innovation”.
“Our history has taught us to think creatively, to find solutions where others see only obstacles, and to build bridges across diverse communities. These characteristics make our country a natural incubator for the kind of disruptive innovation that can transform lives not just here, but across the continent and beyond.”
The big three tech hubs in the world, when ranked by number of tech millionaires as at June 2024, are:
- the Bay Area in the US (which includes Silicon Valley and San Francisco) with 265,000 tech millionaires and 60 tech billionaires. Tech giants Apple, Nvidia, Intel, Alphabet, Netflix and Meta are all based in the Bay Area;
- Greater Seattle, also in the US, with 36,200 tech millionaires and nine tech billionaires. Microsoft and Amazon are both based in Greater Seattle, which includes the city of Seattle, as well as Bellevue, Kirkland, Redmond and Mercer Island;
- China’s Shenzhen — the base city for Tencent, Huawei, ZTE and BYD — with 32,500 tech millionaires and 18 tech billionaires.
Richards said other cities to watch that could potentially rival the big three in the future include:
- Austin in Texas, US, with 20,800 tech millionaires and seven tech billionaires;
- China’s Hangzhou with 18,600 tech millionaires and six tech billionaires;
- Taipei City in Taiwan with 16,500 tech millionaires and 10 tech billionaires; and
- Kyoto, Japan, “the base city for Nintendo, the global pioneer in video gaming”, which has 14,800 tech millionaires and five tech billionaires.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.