JUST before I went on leave in December, one of our readers sent me a link to an interview Harvard Business School conducted with Josh Lerner, a professor of investment banking at the university.
Lerner was talking about the role government played in the development of Silicon Valley in the US, and how it ultimately created a climate conducive to entrepreneurship and business development.
In the interview, Lerner made a powerful comment relating to venture capital initiatives. He said: "Often in their eagerness to get to the 'fun stuff' of handing out money, public leaders neglect the importance of setting the table, or creating a favorable environment."
This line jumped out at me as I mulled over the emergence of our own Silicon Cape in late 2009 as a hub for entrepreneurship, innovation and investment in the information technology sector.
The informal mandate was to bring together stakeholders, including politicians, and find ways to encourage the development of firms in the information technology sector.
Doubts and concerns
The initial hype out of the Cape seemed to indicate plenty of demand for the movement.
Whether sour grapes or not, one thing that has surprised me when chatting to local IT entrepreneurs about Silicon Cape is their concern that the initiative was little more than a glorified public relations ploy by venture capitalist Justin Stanford of 4 Di Capital and IT entrepreneur Vinny Lingham. They also wondered whether it would be sustainable and add value.
My initial impression is that while Stanford and Lingham enjoyed their time in the limelight, their motives were transparent. However, I put these concerns to Stanford anyway on Wednesday.
He fired back that he had footed much of the bill for the initial launch of Silicon Cape, and after that the whole IT venture capital sector had a more "cohesive feel".
In fact it not only outperformed their expectations, but also started to gather some traction with people in government who were looking to build on the early work.
In short, he challenged detractors by saying that significantly more positives had emerged out of Silicon Cape than negatives.
The question is where to from here?
Can the steering committee swing it?
While a lot of the fun stuff of launching Silicon Cape is out of the way, Stanford agrees that the big challenge now is to achieve meaningful and measurable cohesiveness between the private sector and government.
This responsibility will sit with the newly-elected steering committee and the board which is to be established later in 2010.
The initial steering committee has been criticised in terms of its skills base and "pale male" composition.
There was room for argument that fewer technical people and more heavyweight representatives from the venture capital and business community could have added to its clout.
This is ultimately going to be the challenge facing the steering committee - and any board established down the line. Does it have the energy to actually push through the reforms it set out to achieve? Can it force government to tackle exchange regulations to promote trade and investment?
Will it be able to work with local and international stakeholders to protect South African intellectual property? Is it able to stimulate meaningful debate around tax structures which will help develop a sustainable start-up environment?
As Lerner says, the table has been set. The Silicon Cape guests have now been invited and it is up to them to maintain the momentum and take it forward to build on the early promise of the initiative.
- Fin24.com