The plan to make Johannesburg home to a digital revolution

Over the past two years, an initiative has been underway to put an area of central Johannesburg on the map as a place where digital innovation and entrepreneurship happens in South Africa.

There is a growing belief that the work being done by the University of the Witwatersrand a few blocks away from its main campus could inspire the development of a new generation of digital technology experts, innovators and entrepreneurs.

The attraction of Johannesburg’s inner city

The area, called Braamfontein, is located in the centre of Africa’s most important business and economic hub. It is on the doorstep of one of the continent’s top universities, is well-connected by public transport, offers affordable rented accommodation and has an active nightlife.

The streets buzz with tech-savvy young people from across Africa in search of education, new skills and a brighter future.

Drawing on models that have proved hugely successful in major cities around the world, Wits University is creating a large and ambitious Digital Innovation Zone not far from the university’s main campus. This zone is known as the Tshimologong Precinct (from the Setswana word for “new beginnings”).

Inspired by the East End of London

Braamfontein has many similarities to London’s East End which has morphed from a rundown inner city area to a vibrant technology cluster spawning innovative start-ups. The East End is being cited as an example of how, with the right investment, focus and infrastructure, inner cities can be transformed.

The extraordinary change has been captured in The Flat White Economy by British economist Douglas McWilliams.

The title of the book refers to the type of coffee – flat white – most commonly ordered in the coffee shops of London’s East End. McWilliams describes how a small area in London is emerging as the driving force behind the British economy’s rapid transformation. The book is about the growth of the digital economy – which he has dubbed the “flat white economy” – and its role in shaping cities of the future.

As an economist, McWilliams began noticing unexpected anomalies in data relating to a single London district, identified by the postcode EC1V. It is an area in the once-forlorn and dilapidated East End of London around Old Street Roundabout and Shoreditch.

In the two years up to March 2014, nearly 32,000 new businesses were created in this single postcode – more than in all of Manchester and Newcastle combined. He estimated that this created about 300,000 new jobs. Most of these new businesses are in the digital economy.

McWilliams points out that London is and always has been an exciting destination for those seeking fame, fortune and fun. As European economies have imploded in recent years, young people from across the Europe and the UK have been attracted to the city. The high cost of living has encouraged these newcomers to find ways to live cheaply. They have been drawn to London’s East End where rents are relatively low. They share rented houses and flats with others.

Over the past few years, London’s East End has become the centre for a growing community of (mostly) young people, eager to make a living, fascinated by the digital economy, representing a diverse spectrum of cultural, social and economic backgrounds. This diversity has fuelled incredible creativity and entrepreneurial energy.

The UK’s digital economy is rated the second-most technologically ready in the world and a strong contributor to the economy. By 2025, it is expected to represent more that a third of the Gross Domestic Product. It is transforming the destiny of the UK and has its epicentre in that small area in central London.

The build begins

Two years ago, Wits University embarked on a programme to establish the digital technology hub. It will provide a space for skills development in the software and digital technology sector. The aim is to help address unemployment and encourage the growth of new businesses. It will also contribute to the inner city rejuvenation.

The project received a huge boost when IBM Research announced earlier this year that it would locate its 13th laboratory worldwide as part of the precinct. Other large companies, including Microsoft, the South African telecommunications group Telkom and Barclays Africa bank have also joined as strategic partners.

Buildings in the area are being rejuvenated. In the meantime, the university’s Digital Innovation Zone has started operations in a nearby building rented by the university. This is hosting a R5 million innovation competition called the Hack Jozi Challenge sponsored by the City of Johannesburg. Hundreds of entrepreneurs entered the challenge. Similar programmes will be run over the coming months with the aim of seeking out Johannesburg’s innovative energy.

What technology can do for the economy

The digital economy around the world has grown so rapidly that few people have paused to think about it. There isn’t even a good definition of what it is. A European Union working paper on the digital economy notes:

The digital economy is everywhere … It has impacted all the sectors of the economy and social activities, for instance: retail, transport, financial services, manufacturing, education, healthcare, media and so on. It has implications much beyond Information and Communication Technology (ICT). In addition, the internet is empowering people in a new and different way to create and share their ideas, giving rise to new content, entrepreneurs and markets.

Even without a definition, we are all able to see the effects that digital technology has had on our lives. Since the dawn of South Africa’s new democracy in 1994, cellphones, digital cameras, GPS, Microsoft Windows, Linux, Google, smartphones, tablets, Facebook, Twitter, cloud computing and a whole lot more have arrived in our lives. Who among us could live without these?

We have hopes that transforming Braamfontein into Africa’s premier technology hub will inspire new talent, create jobs and lead to an economic renaissance – just like the flat white revolution did for London’s East End.

Barry Dwolatzky does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.