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Interview

with Guy Lundy, CEO, Accelerate Cape Town

22.12.2011 / Energyboardroom

Accelerate Cape Town was founded by roughly 30 businessmen in 2007, and seems to have some similarities with other organizations such as the Investment and Trade Promotion Agency for the Western Cape (Wesgro). Can you explain the difference to our readers, as well as the reasons behind having this additional entity?

Back in 2006/2007, there was a severe lack of coordination between business and government, as well as between business and business associations. As a result, there were some companies that decided to move out of Cape Town. Two of the major oil players, Shell and BP, took the decision to move their head offices to Johannesburg for example. While there have probably been different factors driving this decision, such as proximity to their customers, the lack of coordination on Cape Town’s strategic course was undoubtedly one of them. The corporate leadership became worried for the effects of such moves and required a new environment in which a business destination could be created within the Cape. This business destination would need to be able to compete globally, and remain attractive for corporations to set up offices here.

This implies that Cape Town would need to have a certain character that would attract particular types of businesses. Clearly, you cannot attract all sectors. Rather, it is necessary to profile Cape Town in a certain manner and target a number of niche sectors in particular. As a corporate community, we thus saw the need to work together with all the different stakeholders, including Wesgro, the Chamber of Commerce, Government, the universities, etc. in order to create an environment for long term growth that would enable business to stay and grow here.

Looking at the situation today, how has this improved?

It has been a dramatic improvement. At an academic level, we have a number of universities now working together through the Cape Higher Education Consortium (CHEC). As a result, they are establishing Cape Town as an education hub. Some of the results of these efforts have for example resulted in Cape Town being elected as one of the top 10 destinations for American students studying abroad. This has put us up against some significant cities around the world, such as Singapore, Sidney and Barcelona.

On the government side, politics seems to have sorted itself out to some degree. You no longer see as much chopping and changing between and within political parties that are fighting for power and control. As a result, they are much more able to focus on the long run, something they should have already been doing in the past.

On the business side, we have worked very hard to improving collaboration amongst the business associations. This has improved dramatically. We recognize that we can grow the cake by working together. You can see some direct links too, as I am for example the deputy chair on the board of Wesgro. We work very closely together on an ongoing basis. We also work very closely with the Chamber of Commerce, with Cape Town Tourism, etc. With the latter, for example, I have been working on redesigning the brand “Destination Cape Town.” Moving forward, all of us are helping to establish the Economic Development Partnership that is now being set up.

In oil and gas in particular, SAOGA is one of the stronger special purpose vehicles that focuses on sectoral development. Warwick Bltyh is leading this very well, and also works closely together with us.

You mention you have been involved in redesigning the brand Cape Town. Can you elaborate what this brand stands for today?

Cape Town has traditionally stood for a beautiful place, which no one will deny. However, if this is all you have to offer, you will all too easily be regarded as a lazy supermodel. We have tried to create a different story, and have therefore come up with the so-called Vision 2030. This vision goes hand in hand with the statement: “Cape Town as Africa’s global city – A city of inspiration and innovation.” The inspiration and innovation element has been pulled into the tourism space, where we have used this traditional beauty of our surroundings as a source of inspiration. If people that come here become inspired, they will want to come back and do more. Down the line, we will be able to attract innovators, thinkers and people who lead the way in blue sky thinking. Once these people settle down here, Cape Town can become a real hub of innovation.

Cape Town was also elected as the World Design Capital 2014. Was this important?

This is an important recognition that takes us a step towards moving away from the beauty aspect alone. It is a way to use the diversity of population and thought to come up with amazing designs, be it wines, architecture, arts, technology, etc. This is an opportunity to showcase this to the world. The audience we will be appealing through here is quite different than the audience we had for last year’s World Cup. The World Cup was a great opportunity to put ourselves forward and get noticed, but essentially existed of a leisure audience. The World Design Capital audience, however, is a business audience.

Among the members and corporate sponsors of Accelerate Cape Town, we find quite a number of banks and financial institutions. How important is the Western Cape as a financial powerhouse for South Africa and the rest of the Continent?

If you look at the moneystreams that are being managed out of Cape Town, either directly through companies such as PSG and Remgro or through asset management companies such as Coronation and Allan Gray, there is a huge amount of money that is being controlled from here. While we probably do not even fully understand this power, there are huge financial decisions being made from Cape Town. It is important that we recognize that more than a financial services hub alone, we are a financial hub overall.

Before, you mentioned that as a region, you need to focus on attracting a limited number of particular sectors. Where does the oil and gas sector fit in this context?

We are very interested in the services sector supporting the oil and gas industry overall. There are a number of reasons for this. It is a broad sector first of all, implying that you can look at aspects like training, legal, accounting, back office processing, and so on. All these services are outside of the cleaning, repairing, etc. jobs which we can also do. There is a tremendous growth opportunity that we can provide to our local economy, if we do a good job at servicing this industry. If we can lead in oil and gas services, there is an entire range of other services to benefit from this success. As a result, this benefits other industries that employ people with all kinds of different skill levels. From our own economic perspective, this is very important. You need to have a diverse skill base as a society.

We have seen an increase in activity both on the West and East coasts of Africa. Have these growth opportunities increased significantly compared to 5 to 10 years then?

The opportunities are larger, as there is more exploration and an increased interest in the region. African oil is becoming increasingly important in global oil supply. There is much more momentum than 10 years ago.

The oil and gas sector has been put on the agenda by several politicians and is now regarded as a priority sector for the country, not just for the Western Cape. The reality is that because of our location, the sector belongs here. First of all, many of the services are located here. Secondly, the Western Cape has a closer proximity to the West Coast. Thirdly, we also have the space for this sector. Durban is a shipment and cargo port, while Richards Bay is mainly a coal terminal. The size of Port Elizabeth is also insufficiently large to move really into services, because of people restrictions.

Cape Town is however limited in terms of expansion. Then again, we have Saldanha Bay which is still completely underdeveloped. It is a place that has huge opportunities for growth, which has now been recognized by a number of capital-strong people. As the possibility to turn this area into an Industrial Development Zone (IDZ) is being pushed further, this region will be further expanded to be used as a regional supply base for the oil and gas industry.

Saldanha Bay is still seen as an area that hosts a lot of underutilized potential. Do you feel that the recognition from the international community is there?

The ones that see the potential more than anyone else are the Dutch. They have been extremely interesting in Saldanha Bay. The Port of Rotterdam has also indicated significant interest in managing the Port of Saldanha Bay. Whether Transnet National Ports Authority will allow this is still the question. These companies have grouped themselves together to tap into these opportunities and have particularly shown interest in areas such as desalination and clean energy.

As these partnerships become increasingly important in driving the sector forward, what role do you see for Accelerate Cape Town in this context?

There are essentially 3 spaces we play in. The first is strategic thinking and thought leadership around what we need to do in the Cape Town region to ensure long term development of the Western Cape. The second is the network. We have built a very significant network of business, government and academic leadership and almost act as a connection point to have all these leaders working together. Our third space is to use this thinking and put it into our network in order to have influence. This is a way to influence the leaders to ensure that the things that should happen, actually happen. Pulling ideas and people together is a space we will continue to play in.

What do you ideally aim to achieve with Accelerate Cape Town over the next 5 years?

The Cape Town International Convention Centre (CTICC) will be expanded and double in size, which will enable us to bring in a whole lot more people to Cape Town for business reasons. Once we meet them here, we can inspire them to come back and do more. What I would like to see in 5 year’s time is to see a whole lot more people moving through the City, and planting seeds in their minds about doing business in a location they may have never considered before.

Another aspect that I see improving over the coming years is the cooperation around the various players, around a common goal for the longer term future. The Economic Development Partnership that is being established now will certainly drive this. You will see much more presence in the rest of the world as a place to do business. This will definitely be led by some of our stronger sectors, like oil and gas services, business process outsourcing, financial services, education, agriculture, film & advertising and tourism.

Any final message you would like to share with the readers?

The most important thing is that people need to consider Cape Town in a way that they have not considered before. People need to start understanding that Cape Town has a whole lot more to offer than tourism and leisure alone. If investors think of oil & gas and Africa, they must think about Cape Town as much as anywhere else, if not more.

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