Cape Town’s strong skills base enables it to be flexible, responsive and innovative in response to ever-shifting technology possibility frontiers.
The city is the ideal launchpad to take advantage of a growing national and African consumer market. South Africa is home to the largest consumer electronics market in Africa, with an annual spend of US$10.5bn.
Focus electronics sub-sectors ready for investment are:
- Space technology
- Circuit board and contract manufacturing
- Consumer electronics
- Medical technology
The electronics sector is an essential contributor to foreign exchange earnings through both exports and FDI. In 2018, the industry contributed R762 million in Gross Value Added (GVA) to the Cape Town economy.
Companies like Hisense and Panasonic are just two companies of the 19 FDI projects already invested in the city.
Key economic indicators:
- In the past five years, the electronics sector recorded an average of 8.7% in export growth.
- In the past ten years, R2 563 million was invested in Cape Town’s electronics sector through FDI, representing a total of 19 projects for the period.
- In 2018, the sector contributed R762 million in Gross Value Added (GVA) to the Cape Town economy and employed 3 374 people.
- Cape Town’s has an export value of over R2.9 billion each year.
The city is the ideal launchpad to expand into the rest of sub-Saharan Africa.
Cape Town and the Western Cape exports more to the rest of Africa than anywhere else in the world. Influential African retailers like Shoprite, with an established distribution network across the continent, are based in Cape Town. The city is also home to online retailers like Takealot.com and others.
Competitive advantages of the electronics industry in Cape Town
- There is a prevalence of innovative design thinking and active systems integration.
- There is good access to skilled engineers required within the sector.
- There are established African export markets for electronic products and excellent infrastructural connectivity to these markets.
- It is relatively easy to export products from Cape Town. Cape Town is considered a comparatively low-cost destination for consumer electronics manufacturing.
- There is better access to key clients (retailers) with head offices in Cape Town for more direct engagements.
- Cape Town has a historical advantage for companies in space technology due to the national space programme facility (Houwteq) in Grabouw. This has resulted in an agglomeration of space technology skills in Somerset West.
- The business environment is perceived to be safer, based on a perception of lower crime levels in Cape Town.
- Major companies across a spectrum of clusters which include Hisense, Tellumat, Panasonic and SpaceTeq have a strong presence in Cape Town.