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Opportunity Issue 99

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Opportunity magazine is a niche business-to-business publication that explores various investment opportunities within Southern Africa’s economic sectors and looks to provide its readers with first-hand knowledge about South African business. Opportunity also looks to present South African business to international markets that may have interests in investing in South Africa. The publication is endorsed by the South African Chamber of Commerce and Industry (SACCI).

TOURISM issues have made

TOURISM issues have made us insular, effectively cutting us off from the global tourism ecosystem. We do not even consider Africans coming into our country as inbound tourists yet they make up nearly 80% of our foreign arrivals before and during the Covid-19 era. We can attract tourists from countries in the Middle East, China and India, all of which have a growing middle and upper class that is hungry to travel and consume our authentic offerings. We just need to start focusing on bringing them here. The forthcoming new age of tourism will not be kind to countries that have lacklustre safety policies. Conscious travellers will be looking for destinations that are crime free, family friendly, politically stable and adherent to Covid-19 regulations. Coherent strategy needed The South African government drew up a sectoral recovery plan to recuperate the industry to pre-Covid levels. But the plan fails to mention a coherent public-private strategy. It has been reported that foreign tourists put off travel to South Africa for a later stage as it is seen as a long-haul, once-in-a-lifetime destination. I believed this too, until Australia made that reason irrelevant. Statistics show that of the 9.4-million international arrivals Down Under in 2019, more than 370 000 were from the US and 344 000 were from the UK. The industry contributed almost AUD61-billion (R660-billion) to the country’s GDP. That is because Australia has driven a collective approach from all levels of government and the private sector. Both sectors run with the same messaging and have the same agenda. More than that, we need to consider an aviation policy which is accessible and open. Have we ever considered an open-skies approach? It is time that we have an open-skies policy at least for our fellow African countries. It would make South Africa an airline hub for the rest of the continent. A national carrier is important but even more so is the success of a vibrant tourism market. We will need to do more if we are to deliver South Africa as a hub status for Africa, South America and the Middle East. Reconsidering our aviation policy and being accessible to the world will be a step in the right direction. Let’s finally be open for business Tourism is a super-sector. It is the only industry that involves other sectors such as manufacturing, information technology and transport. To effectively tap into this opportunity, there needs to be a willingness to do business on the global stage. South Africa cannot remain insular any longer. We could start by building our domestic market as a base. Studies have shown that South Africans mainly travel within the country to visit family and friends. This does not need to be the only reason any longer. The Coronavirus has given us the opportunity to build a well-oiled local tourism industry based on leisure travel with niche offerings. While Sho’t Left Travel Week is admirable in its intentions, dedicating one week every September is not going to entice the average South African to visit their own backyard. Travel for South Africans should be made accessible and affordable. The need for global brands to bring a change, competition, agility, skills and global best practice is even more relevant today. In addition, the introduction of such brands will bring the country’s tourism on par with the global ecosystem as they generate an international presence and awareness of South Africa as a destination. These brands play a key role in attracting fair market share purely by being in a destination. They are a driver for destination marketing. An employment powerhouse When tourism rebounds, it will recapture its capability to be a major employer. Pre-Covid statistics show that it contributed 4.5% of total employment in South Africa and remained resilient in tough economic times. We will, once again, look to tourism to mend the unemployment rate. The private sector, particularly global brands, will play a part in developing employees’ skills. It can partner with tertiary institutions in growing a workforce fit for the industry. It will need to take the lead because tourism businesses bring global best practice and world-class training. But government would first need to create an enabling environment for these businesses to exist and thrive. They need to have the resolve and ability to execute their plans. We need less talk and more action. In 2019, we only attracted 15.8-million foreign tourists. That is almost 10-million less than what the city of Venice receives in a year. And with Covid-19, South Africa’s figures dropped by 71% to just five-million foreign arrivals. We need to be smarter when it comes to attracting tourists. We need to find a way to place the country high on the global agenda. South Africa is not the only destination from which to choose. The sooner we understand this, the sooner we will be able to attract an abundance of tourists, create jobs and revive the tourism industry. About Millat Investments Hamza Farooqui is the founder and CEO of Millat Investments. The company has recently reopened its property Hyatt Regency Cape Town under a management agreement with Hyatt Hotels Corporation. The group will also be working with Millat to introduce for the first time in Africa its extended-stay brand, the Hyatt in Rosebank and Sandton. Millat is currently aggressively growing its pipeline in South Africa. 40 | www.opportunityonline.co.za Credit: Graeme Williams/Brand SA

Beefing up your technology presence in Europe Flanders / Belgium should be on the radar. © IMEC. The largest nanotechnology research centre in Europe Flanders, the Dutch-speaking northern region of Belgium, is a hub for technology companies from South Africa and Africa. Belgium, with a population of 11.5-million, has a GDP that is 40% higher than South Africa, with almost 58-million people. Belgium is centrally located and is home to the NATO HQ and the EU Commission and it also houses some remarkable industries like pharmaceutical and biotech, chemical, food processing, it has a vibrant textile sector (especially technical and specialty textiles), an automotive sector, and heavy users of all kinds of industrial IoT applications. Technology and ICT on the rise The Flanders technology sector is on the rise and many South African companies have set up their first operation in Belgium. What is the business case? These are the drivers: Large market Even with Brexit, there is a market of 448-million customers. Europe has extremely large purchasing power per capita, coming close to the US market. Thanks to the social model (mixed economies), the purchasing power is well distributed, providing a good market for B2C applications. Euro versus the Rand The continued Rand/Euro fluctuations, with the long-term trend of an ever-lower currency value, is a driver for South African companies to establish a business in Europe. Besides the high value of the Euro, a presence in Europe also protects these companies from currency controls. Vibrant IT centres of expertise IMEC (www.imec.be) The InterUniversity Micro Electronics Centre (IMEC) is a centre of expertise in nanotechnology and applications in smart industries, health, cities, education and mobility. It has 3 500 employees, half of whom either have a PhD or are working on a doctorate. The cleanrooms are state-of-the-art with the latest technologies. Besides fundamental research, the centre also works on new applications in the domains of health, security, IoT and biotech to name a few. Cybersecurity Cybersecurity and security applications started in 2000 when companies like Ubizen began working on new security applications, at that time a sector in its infancy. The whole sector has since exploded and now these firms are grouped in a new association L-Sec, Leaders in Security (www.leadersinsecurity.org). It groups together more than 8 000 individuals and 135 companies. Startups and scaleups The Belgian startup scene (www.startups.be – www.scale-ups.eu) is mature and has a full ecosystem of angel investors, VC funds, supporting companies and universities. The access to these markets is a crucial consideration for African startups in selecting Flanders and Belgium as a first hub into the EU market. With local financial backing, the country has already a few unicorns such as Collibra and an exit scene to be proud of – 68 in 2021. Location – location – location As a sales and marketing location, Flanders is the best in Europe because of the technical skills of the local staff as well as the multilingual and cultural background. The country is blessed with an advanced education system that promotes multilingual capabilities (including Dutch, English, French, and German). Learn more Flanders Investment and Trade Johannesburg organises a number of hybrid events in South Africa to discuss IT opportunities in Europe. Different events are planned with business chambers in three cities: • October 28: Pretoria: www.sakeliga.com • November 11: Nelspruit: www.klcbt.co.za • November 16: Kimberley: www.nocci.co.za Contact details Email: luc.fabry@fitagency.com www.flandersinvestmentandtrade.com © CompRSA. The largest privately-owned IT company in Port Elizabeth has established a new European office in Leuven, Belgium _____ Luc Fabry Trade and Investment Commissioner, Flanders Investment & Trade

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