Cape Town is somewhat
removed from the frantic business hype of the country’s
major financial and industrial centre, Johannesburg. However, the
Western Cape accounts for 14 % (R81,800 million) of South Africa’s
Gross Domestic Product (GDP), the 3rd highest in the country, and
the city is home to some of the country’s major financial
institutions. These include insurance giants Old Mutual and Sanlam,
financial houses like the Board of Executives, Merrill Lynch, Investec
and Fedsure, and petroleum multinationals BP, Caltex (Chevron) and
Shell.
The economic mainstays of the region are agriculture,
tourism, information communication technology (ICT), manufacturing
and construction and financial services and property. Since 2001,
a general economic slowdown has occurred, largely due to the strengthening
Rand and particularly affecting transport, agriculture, communication
and financial services.
The ICT sector is currently the most significant
for growth and employment, although the monopoly of telecommunications
giant, Telkom, is limiting several companies and the industry has
struggled since the 2001 downturn, as has the financial services
sector.
The single most significant industrial source of
employment in the region is the textile and clothing
industry, which supplies jobs for a huge 170,000 people. Ever since
the tourism boom in 1995, the city has been gathering rich rewards
and tourism is now the largest overall employer in the region, supplying
employment for a huge section of the workforce, both directly in
the service industry and indirectly for street traders and other
informal operatives.
Information Technology (IT) has also emerged as
1 of the major industries in the city, principally during the recent
IT downtown, during which time it proved resilient. The industry
is 1 of the largest employers, with Cape Town boasting about 1,200
IT companies employing roughly 27,000 people. Within the IT industry,
the focus is largely on software development and consultancy, with
17% of the exported products and services going to the United States
of America, 32% to Europe, and the rest to Africa.
The agriculture industry also employs numerous
amounts of people, with the emphasis being on wine production and
fruit farming. With 200 kilometres of commercial fishing zone and
an expanding port, fishing and shipping are also significant industries
in the city. Fishing alone provides jobs for 27,000 people. Another
huge industry in Cape Town is the media. The city is favoured as
the ideal location for international film crews, attracted by brilliant
foreign exchange rates, a 1st rate infrastructure, a good film service
industry, excellent weather, beautiful locations and well stocked
modelling agencies. However, rising prices and a strengthening Rand
are currently intimidating this industry.
Another important industry is printing and publishing, Cape Town
has the lion’s share of this segment of South Africa’s
economy.
The awarding of the 2010 FIFA World Cup will have
significant benefits for the economy and is expected to contribute
R21,3 billion to the country’s Gross Domestic Products, as
well as create 159,000 jobs. Some, however, fear that the resulting
construction and infrastructure of roads, hotels and stadiums will
not be sustainable. Much of the action will be focused on Cape Town
and the knock on effect for tourism and investment is predicted
to be massive.
With the Western Cape boasting the highest adult education
level in South Africa (with 93% of the people over the
age of 20 having undergone schooling), 80% adult literacy (also
the highest in South Africa) and 5 residential universities and
technikons, Cape Town boasts a vastly skilled workforce. However,
only 45% to 52% of school leavers matriculate and discrimination
persists. Government spending on education currently falls short
of the other provinces, although it is progressively increasing.
This is undoubtedly a city on the grow, each year attracting around
R1.1 billion foreign direct investment.
Poverty is still rife in Cape Town, with 29% of
the population in the region living in poverty, which is nonetheless
the lowest in the country. The official unemployment rate for South
Africa is guessed to be almost 28% as of March 2004, while the expanded
national unemployment rate is 42%. Unofficial unemployment rate
approximations for 2004, according to the Cape Times newspaper,
are 20% for Cape Town (set to rise to 21% in 2005) and 18% for the
Western Cape. Another crisis facing the city is the increasing HIV
infection rate, the Western Cape has an infection rate of 7.1%,
which is already 1 3rd of the current average South African infection
rate.
The Western Cape government is presently working on the iKapa
elihlumayo project, which aims to increase economic growth,
economic participation and employment, as well as reduce geographical
and socioeconomic inequality, and provide a maintainable social
safety net. Initiatives include the introduction of a Rapid Bus
Transport system, the assembly of a film studio, and a further education
and training programme.
Cape Town’s central business district is
located in the city centre and Foreshore, although business and
industrial parks can also be found in the southern suburbs (Rondebosch,
Claremont and Wynberg) and on the outskirts, with Parow, Epping,
Retreat and Montague Gardens the core industrial areas outside the
city. New developments are appearing in Vredenburg and Saldanha,
as a result of the massive Saldanha Steel Project.
The new Cape Town International Convention Centre
is located on the Foreshore, linking the V&A Waterfront and
the city centre.
Cape Town International Convention Centre
Address: Convention Square, 1 Lower Long Street
Telephone: (021) 410 5000
Facsimile: (021) 410 5001
Email address: info@ctconvention.co.za
Website address: www.capetownconvention.com
The centre opened in June 2003 and has proved a great success, contributing
2 and a half times more to the national economy (R2.4 billion) than
was initially anticipated. It will also create around 3,900 direct
jobs in the city during 2005, over and above the 3,668 created during
its 1st year. Over the next 5 years, the centre is expected to earn
another R9.5 billion for the country’s Gross Domestic Products.
The centre has also had a massive knock on effect for Cape Town’s
tourism industry. The V&A Waterfront, in the heart of the city,
is an tremendously popular and ever expanding business district.
The University of Cape Town’s Graduate
School of Business is situated here, producing some of
the big minds in business, both for South Africa and abroad.
The University of Cape Town’s Graduate School of Business
Tel: (021) 406 1338/9 or 1175
Facsimile: (021) 421 5693
Email address: info@gsb.uct.ac.za
Website address: www.gsb.uct.ac.za
The Cape Chamber of Commerce and Industry
was founded in 1804 and is a 1 stop shop for business information
and advice.
Address: Cape Chamber House, 19 Louis Gradner Street
Telephone: (021) 402 4300
Facsimile: (021) 402 4302
Email address: info@capechamber.co.za
Website address: www.capechamber.co.za
Business Etiquette
Business practices in Cape Town and South Africa
are very alike to those in the United Kingdom and the United States
of America. Despite the fact that Cape Town is more informal than
Johannesburg, most industries do suppose a suit and tie. The more
modern or artistic industries, such as information technology and
the media, tend to display a more informal attitude to dress, mainly
in the summer months. However, it is recommended for foreign business
visitors to maintain formality and only resort to the casual uniform
of t-shirts, shorts, and sandals when the after hours entertainment
begins.
Business hours are from 9.00 am to 5.00 pm, although
several companies finish earlier on a Friday. The exchanging of
business cards is a significant ritual in Cape Town and a firm handshake
between both men and women is common. In some instances, the African
triple handshake will be used, this is a usual handshake, then a
tilt to the hand is performed to clasp the fingers at a 90 degree
angle (but without letting go) and then a return to a normal handshake.
Socialising is a big part of the business scene
in Cape Town and a lot of business is conducted over lunch. Wine
will more than likely be incorporated and visitors should note that
South African wines often have a slightly stronger alcohol content
than the majority of European wines (generally nearer 13%). Admiration
of the local wine will be appreciated, although over indulgence
is certainly not advised. Capetonians pride themselves on being
hospitable to foreign visitors and an invitation to a business contact’s
home is not abnormal. These will, more than likely, take the form
of a braai (barbecue), which tend to last throughout the complete
afternoon and often into the night.
Alcohol flows freely here and a gift of a bottle of wine is always
appreciated, unless the host is Muslim, in which occasion alcohol
is strictly prohibited. In this case, a gift of flowers, chocolates
or a speciality gift from the guest’s home country is more
appropriate. |
