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Cape Town
African City of Opportunity
www.pwc.co.za/cities
Cape Town performs well
in South Africa and the
continent.
Now it looks to the world.
Cities of Opportunity are more than just places of work or travel. To the millions of people
who live in and visit them, they are the communities, people and stories that make up
everyday life. In our view, the cities that will succeed in the future are those that can provide a
balance between economic and physical security, nurtured aspiration and quality of life and
environment.
Picture provided by The City of Cape Town
This influx of people brings with The first question involves
Foreword it an influx of human problems.
At the same time, cities like Cape
Town are experiencing a wider set
organisational strategy, performance
and capabilities – and is the subject of
our Future Cities model – introduced
of global megatrends. These include briefly on page 15.
technological breakthroughs and social
changes that transform the nature The second question forms the basis
of work and the role of government, of this report, in which we have
global economic shifts that require benchmarked Cape Town against
cities to redefine themselves to compete the 30 cities featured in our seventh
internationally, and climate change and annual report. These are global centres
resource scarcity that threaten lives and of finance, commerce and culture
livelihoods. The latter could hardly be and represent among them a sizeable
illustrated more vividly than by Cape proportion of the world economy. But
Town’s current water crisis.2 Although Cities of Opportunity contends that
‘Day Zero’ is no longer expected in urban success means more than just
2018, the region is still suffering the spending power: It requires a balance
worst drought in more than 300 years, of social, economic and environmental
In 2008, the world’s urban and this may still make it the first major factors to provide the best quality of life
population passed the 50% mark, city in the world to turn off the water for citizens.
meaning that, for the first time, you taps. On current trends, it is unlikely to Our findings across the ten indicator
were more likely to live in a city than be the last. areas describe a city with strong
elsewhere.
1
But the megatrends also bring great fundamentals, aspiring talent and
In the same year, in an attempt to opportunities to cities that can grasp a palpable excitement, set against a
understand the characteristics that them. New ways of working empower backdrop of inequality, which is borne
would help the growing cities of the staff, digital government engages out of the country’s past but which will
future succeed, PwC launched its citizens and green technologies promise play a role in the city’s future.
first Cities of Opportunity report. not only to fight climate change but Notable strengths include the city’s
Ten years and seven editions later, to end many of the other downsides transport system, its business-friendly
we turn our attention to one of of urbanisation; pollution, waste, environment, the cost of living and
Africa’s great opportunities: The City congestion and issues of public health. doing business, and its natural beauty.
of Cape Town.
Implications for government, aside
While urbanisation has so far lagged
from the current water crisis, include
behind in Africa, this cannot be said Cape Town is at a strengthening local, national, public
of the continent’s most developed
country, South Africa, where 55% of crossroads between and private collaboration, fully
embracing digital technology and data,
people now live in towns and metros, African problems and and building on the success of tourism.
and their number grows by 2% every
year.
global ambitions. Its All of these areas will be explored
future success will further in the following pages.
1 50.46%, see: World Urbanization depend on its ability We would like to extend our thanks to
Prospects, United Nations
to solve longstanding various individuals who engaged with
Population Division (2008).
us on this project, and provided us with
problems at home their views on the city they live and
while keeping up with a work in. Particular thanks must go to
the City of Cape Town and the Western
rapidly changing world. Cape Government whose insights have
allowed us to present not only the city
In order to succeed in a changing as it is today, but the detailed plans that
world, Cape Town must understand its are currently being put into place to
position relative to other global cities. build the city of tomorrow.
This involves answering two questions:
Cape Town has played an important
• How do they do things? role in South African's history. We now
look to the future of this African City of
• How well do they do?
Opportunity.
2 Note that the water crisis does not
dominate this report’s findings. Although
the fieldwork was carried out before the Jon Williams
2017-18 crisis, Cape Town did score poorly
for Water-related business risk (27th of 31 Head of Cities & Urbanisation
cities). However, this had limited effect on PwC Africa
its overall ranking as the 66 scores in this
study are equally weighted and no one
factor outweighs another.
Contents
About the study 6
Future Cities 12
How Cape Town compares 18
Tools for a changing world 28
Quality of life 44
Economics 62
Implications 76
Acknowledgements 82
Appendices
This publication has been prepared for general guidance on matters of interest only, and does not
constitute professional advice. You should not act upon the information contained in this publication
without obtaining specific professional advice. No representation or warranty (express or implied) is
given as to the accuracy or completeness of the information contained in this publication, and, to the
extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of care
for any consequences of you or anyone else acting, or refraining to act, in reliance on the information
contained in this publication or for any decision based on it.
About the
study
6 PwC
Cape Town – African city of opportunity 7
About the study
Cities of Opportunity
The first edition of the global Cities The measures we use are selected Transparency, simplicity,
of Opportunity study was developed to develop an accurate reflection of consistency and balance
in 2007 by PwC in collaboration with that balanced city. This shows the
the Partnership for New York City. connection that exists between good Cities of Opportunity is based on
The question which gave birth to this economic, social and environmental publicly available data supported by
study was what New York had to do to indicators. Among the 10 indicators, extensive research, using three main
remain competitive on the world stage five correlate in a close positive pattern sources:
after the existential events of 9/11. – Intellectual capital and innovation; • Global multilateral development
The purpose of this study continues Health, safety and security; Ease of doing organisations such as the World
to be to comparatively measure the business; Technology readiness; and Bank and the International
performance of a range of global cities Demographics and liveability. In other Monetary Fund;
against a set of 10 indicators, which words, when one goes up, the others
jointly provide a holistic view on how tend to do so as well. For example, the • National statistics organisations
successful cities thrive in sustainable indicators from the 2011 global study such as UK National Statistics and
urban development. found that health and intellectual Statistics SA; and
capital correlated to a striking +87%. • Commercial data providers.
Like cities, the research itself continues
to evolve and the analysis has grown The 10 data indicator groups are based For the Cape Town study, this data was
from the 11 cities included in the first on 66 variables which jointly provide collected in 2017, but in most cases,
edition to the 30 cities covered today. an image of city success. In this robust it pertains to 2015 or 2016 to allow
The group of global cities in the study sampling of variables, each individual for a fair comparison with the other
is determined by three indicators: variable has to be: Relevant; consistent cities, the data for which was collected
They are capital market centres, with across the sample; publicly available as part of the seventh global study in
vibrant economies and a good quality and collectible; current; free of 2016. This means that some care should
of life. Each year this set of cities is re- skewing from local nuances; and truly be taken in using the statistics in this
assessed, with upcoming cities joining reflective of a city’s quality or power. report as current – some variables
the ranks while those falling back in See Appendix A for an overview and change frequently and this report is a
their development being removed. The definitions of the variables. snapshot in time.
challenge of developing a city, keeping
it on top and evolving with changing Data is normalised, where appropriate, The Cape Town study uses all of the 67
needs, is the dynamic we are seeking minimising the likelihood of a city indicators in the seventh global report
to illuminate. The hypothesis for this doing well solely because of its size and bar one: Airport to CBD access. This
global research is that the more well- historic strength. This is usually done variable, which was also not included
balanced a city is socially, economically using land area, population or changes in the 2014 Into Africa study, compares
and environmentally, the better it over time so that, for example, GDP airport access on the basis of rail links
will fare for businesses, residents and growth is used rather than nominal rather than access to the city centre per
visitors. GDP and affordability of rent is a se.
proportion of local wages.
8 PwC
In some cases, national data was used This global comparative assessment for Adjusting for income
as a proxy for city data. This was only Cape Town is based on the land area
done in cases where consistent, highly covered by the municipal authority, This study adds a new element
reliable sources of publicly available stretching from Atlantis in the North- to the analysis, borne out of two
city data were unavailable for all study West to Gordon’s Bay in the South- realisations: First, that the prosperity
cities. The scoring methodology was East. The only exception to this is that of a country is a strong (though not
developed to ensure transparency the University of Stellenbosch, which predictive) determinant of the success
and simplicity for readers, as well as is included in the study rankings of its cities (see page 10). Second, that
comparability across cities. The output despite being located in neighbouring benchmarking is most useful when it
makes for a robust set of results and Stellenbosch municipality. The compares like with like. For this reason,
a strong foundation for analysis and University and the city have close ties we report each of the indicators in this
discussion. and it was judged that because many study using two sets of scores. The
Cape Town residents commute to the first is versus all 30 other cities, and
In attempting to score cities based on University and many graduates of the second against only the 12 cities
relative performance, we decided at the Stellenbosch live and work in Cape which, like Cape Town, are situated in
outset of our process that for maximum Town, it should be included. middle-income countries, as defined
transparency and simplicity, we would by the World Bank. These are: Beijing,
avoid giving overly complicated weights This study provides Cape Town the Bogotá, Jakarta, Johannesburg, Kuala
to the 66 variables. opportunity to measure its performance Lumpur, Lagos, Mexico City, Moscow,
against a set of comparator world cities Mumbai, Rio de Janeiro, São Paulo and
Consequently, each one is treated with across the range of holistic indicators Shanghai.
equal importance and weighted the and variables. How does the city rank
same. For each individual variable, the amongst its peers, which areas are key This method also has its flaws – the
31 cities are sorted from the best to the to its success and in what areas does inclusion of China and Russia may not
worst performing, with each receiving the city need to improve to compete be representative – but on the whole,
a score ranging from 31 for best to 1 for globally as successfully as it competes the two groups represent two different
worst. In ties, cities are assigned the in Africa? These are the questions this cohorts; the mean GDP per capita of the
same score. This approach makes the study seeks to answer. 13 middle-income countries (MICCs) is
study easily understandable and usable $6,400, seven times lower than that of
by business leaders, academics, policy the richer 18.3
makers and the public alike. Once all of
the 66 variables had been ranked and In addition, throughout the study, we
scored, they were placed into their 10 have complemented our global rankings
indicators (for example, Economic clout with a series of South Africa-only
or Cost). analyses which compare Cape Town
to the other metros in the country.
Within each individual indicator group, This provides a view of the city within
the variable scores were summed to the context of South Africa’s young
produce an overall indicator score for democracy and the unique challenges
that topic. Here as well, the city order it faces.
from 31 to 1 is based on these scores,
however, for ease of presentation, the
cities scores are presented in reverse 3 MICCs mean = $6,446. High income
order – i.e. rank. Therefore, if Paris country cities mean = $44,219. See: World
receives a score of 31, it will be shown Bank data catalog, GDP per capita (current
as 1 (first) in the tables and charts. US$, 2016), World Bank (2017).
The table at the start of each section
also shows the summary score for the
category.
This produced 10 indicator league
tables that display the relative
performance of the study cities from
best performing to worst performing,
and an overall table that shows all 10
indicators and the overall score.
Cape Town – African city of opportunity 9
Fig. 1 Distribution of study rankings per indicator with country income level highlighted
0
5
10
15
20
25
30
Overall Economic Ease of doing Cost City gateway Int. capital / Tech Transport / Health, Sustainability Demography /
clout business innovation readiness infra security / environment liveability
Cape Town High-income countries Middle-income countries
Income drives success – but does capital is required to succeed. Indeed, Inequality of Opportunity
not determine it education levels, health and safety
outcomes and infrastructure all tend to The graph on page 11, shows the
Figure 1 shows the rankings of all 31 be poorer in less developed countries, relationship between country income
study cities, highlighting the income and their cities. This also makes Cape and study ranking in more detail. The
category of their host countries, Town’s success in Transportation and y-axis shows cities’ overall score in
according to the World Bank.4 The infrastructure more laudable. this study, while the x-axis shows GDP
results are striking. For the overall per capita. The first thing that can
score, the 13 lowest ranked countries Scores for City gateway and be seen is the striking differences in
are all middle-income countries, Sustainability and the natural income – the richest middle-income
while the top 18 are high-income. A environment are slightly more nuanced, country, Malaysia, has a GDP per capita
similar pattern is seen for Intellectual which highlights the fact that these of $9,500 compared with $26,500 in
capital and innovation, Transportation are areas where developing country Spain, the lowest for the high-income
and infrastructure and Health, safety cities can outperform the global leaders countries.
and security and Economic clout – all due to factors – often geographical, or
areas where significant long-term historical – that cannot be replicated. A strong correlation appears to be
investment in physical and human observable between the two scores
For example, Kuala Lumpur and (r2 = 77%). If this is the case, cities
Johannesburg have airports that are that appear above the dotted line can
4 The World Bank recognises four income
regional hubs, Moscow was designed be considered to have achieved a good
groups – low, lower-middle, upper-
middle and high. There are no low around its public parks, and Cape Town score in this study for their respective
income countries in the study, and we has beaches and mountains which income levels, while those below the
have grouped the lower-middle-income cannot be airlifted to London. line should perform better given their
countries (India, Indonesia, Nigeria) with
the upper middle ones (Brazil, China,
income levels.5
This highlights a broader point. City
Colombia, Malaysia, Mexico, South
Africa) to show a middle-income group. indexes can be misunderstood when
For the 2018 fiscal year, low-income they are used to create black and white
economies are defined as those with a findings from colourful places. Instead 5 Please note that this is illustrative, not
GNI per capita, calculated using the World cities should seek to understand the scientific, as it infers a linear relationship
Bank Atlas method, of $1,005 or less in between the two variables which has not
2016; lower middle-income economies many parts that make up their unique been proven.
are those with a GNI per capita between ‘place’ and to focus on the ones that are
$1,006 and $3,955; upper middle-income most relevant and controllable.
economies are those with a GNI per capita
between $3,956 and $12,235; high-income
economies are those with a GNI per capita
of $12,236 or more. See: World Bank
Country and Lending Groups, World Bank
(2018).
10 PwCIs income everything
However, there are a multitude of
factors that contribute to a Cities of
Opportunity score and this box explores
only one. In fact, our full global report
found that the scores most strongly
correlated with success were those
pertaining to quality of life factors, as
well as intellectual capital.6
In other words, to be a successful City
of Opportunity, it is necessary to be
highly productive, to attract the best
people, and to look after them well.7
Throughout this study, we will report
Cape Town’s rankings in two ways:
1. Compared with all cities; and
2. Compared with only the 13 middle-
income-country cities (MICCs).
6 Cities of Opportunity 7, PwC (2016), pg.22.
7 GDP per capita, or output created per
person, is a measure of prosperity but
it is also a proxy for productivity which
is normally calculated using total hours
worked.
Fig. 2 Worlds apart
GDP per capita vs Cities of opportunity score
1600
Hong Kong Singapore
London Amsterdam
Toronto
1400 Paris
New York
Berlin
Seoul
Tokyo
1200 Madrid Sydney San
Beijing Francisco Chicago
Kuala Lumpur Dubai
Cities of opportunity overall score
Moscow Stockholm Los Angeles
1000 Mexico City Milan
Shanghai
Cape Town
800 Johannesburg
Bogotá
São Paulo
Mumbai Rio de Janeiro
600
Jakarta
400
Lagos
200
0
0 10000 20000 30000 40000 50000 60000
$ GDP per capita, 2016
Cape Town – African city of opportunity 11Future cities 12 PwC
Cape Town – African city of opportunity 13
Future cities
How to meet the needs of
changing citizens in a changing
world
PwC’s Future Cities model asks how We recognise that each area forms part
cities can meet the needs of changing of a city value chain with the ultimate
citizens in a changing world. We outcome of citizen satisfaction, and
consider the outcomes that make a that as well as being important on its
successful city of the future, and the own, each of the areas interacts with
strategies and capabilities cities must the others: Digital enables citizen-
adopt to achieve these. centricity, finance must be transversal.
In our experience, many cities have
These include 10 areas, both traditional initiatives that focus on some or all of
and modern, that should be high on these areas but few do this in a co-
all cities’ agendas. Although some of ordinated way, and none that we know
these may gain more press coverage, of benchmark themselves over time, or
we do not view any one area as more against their peers to understand their
important than another. Every city has readiness for the future.
its own problems, culture, capacity and
politics and these determine what will Who is responsible for change?
work best.
Our focus is primarily to help city
Strategy to execution governments succeed, but there are
few urban problems that can be solved
Three of these areas involve re-thinking without the involvement of local
strategy to change the way cities think, businesses, charities, communities,
seven involve strengthening capabilities academics – and you and I.
to enable cities to work better. Planning
ambitious digital strategies and future
resilience are important, but they must
be grounded in the physical world of
balance sheets, maintenance spending
and technology implementations.
None of the 10 areas are unfamiliar,
and even the least mature city will have
elements of some or all of them, but
in our experience many cities lack the
capacity to perform highly in more than
a few.
14 PwCFuture cities
How to meet the needs of changing
citizens in a changing world
Fig. 3 Future cities model
Ser v
a l ised ic es
on
r s
Pe
Powers & Urban
Incentives Intelligence
Sustainability
People &
Culture
Digital
City
Liveability
Urban Data-led
Finance Delivery
Re
&
&
sil
Infrastructure
& Transport t h
ien w
ce Gro
City Citizen City
outcomes strategies capabilities
Recognising how Changing how Enabling how
cities succeed cities think cities work
Cape Town – African city of opportunity 15City outcomes
Personalised Services Treat citizens like customers:
Citizens have diverse and complex needs which vary with their life stage and
circumstances. Service delivery must be both personalised and responsive.
Example: Being able to see your bills online and up-to-date, or receiving an extra
wheelie bin if you have a larger family
Resilience & Sustainability Plan for the worst:
Ensure that when things go wrong, services can be maintained, people and assets
protected, and resources preserved.
Example: Contingency planning and up-to-date, independent risk surveys, or
greenhouse gas and pollution controls that go beyond national limits
Growth & Liveability Plan for the best:
Build a city where people can live happy, healthy, productive lives, from cradle to grave.
Example: Investing in education, skills and safe, cohesive communities; making the city
a desirable place to invest, do business and trade with; helping people get around easily
and ensuring equality of opportunity
Citizen strategies
Citizen-centricity Put citizens at the heart of decisions – it’s a win-win:
Example: Citizen engagement app, one phone number to reach any city department
Transversal Management Break down departmental silos to achieve better cross-government outcomes
Example: Combined departments for health and social care or housing, transport and
land
Collaboration Work with partners inside and outside of government to improve whole city outcomes
Example: College courses that teach subjects needed by city employers; transport
systems that are coordinated between different levels of government
City capabilities
Powers & Incentives Use the fiscal, legislative and persuasive power of government to create change
Example: Carpooling lanes, flexible water pricing, investment in large-scale
inclusionary housing
Data-led Delivery Use data to understand performance and actively drive delivery
Example: Mayor’s dashboard with real-time tracking of key priorities
Digital City Embrace ‘digital as default’ to reimagine government
Example: ‘Smart streetlights’ that can help with parking, monitor air pollution and fight
crime; Open data and ‘City as a platform’ mindset
Urban Intelligence Solve complex city problems by revealing the answers hidden in data
Example: Optimised transport routes and timetables, better matching of housing supply
and demand
People & Culture Create a working environment built on collaboration and fostering innovation
Example: Flexible / remote working for city staff
Infrastructure & Transport Build productive assets and connect people to opportunities
Example: Fully integrated bus, rail, and taxi system with electronic ticketing
Urban Finance Collect and use public money as efficiently as possible
Example: Mature leveraging of large city-balance sheet to fund new transport
investment
16 PwC“In education, it is our responsibility to equip our
children to be active citizens in our economy, and
provide much-needed skills to ensure that our learners
are able to participate in the modern world.One of
the ways that we as the WCG are equipping our young
people is by improving e-Learning, which has been
a priority for the WCED for over a decade. We have
now accelerated it to make e-learning a reality in all
schools.
We believe that e-learning holds a lot of potential to
enable learning and teaching in a more differentiated
way, and can also provide access to excellent quality
resources in places where they are not currently
accessible. It is also simply inconceivable to educate
anyone in today’s world without making sure that they
are ‘tech ready’ to enter the world of work when they
leave school”
Debbie Schäfer
MEC for Education, Western Cape Government
Cape Town – African city of opportunity 17How Cape
Town
compares
18 PwCPicture taken by Wessel Van Wyk Cape Town – African city of opportunity 19
How Cape
Town
compares
Overall
Score Total Intellectual capital and Technology readiness
innovation
London 1 1500 1 1 2
Singapore 2 1417 2 12 1
Toronto 3 1407 3 4 6
Paris 4 1389 4 3 11
New York 5 1364 5 6 3
Amsterdam 6 1353 6 4 4
Stockholm 7 1345 7 9 4
San Francisco 8 1325 8 2 7
Hong Kong 9 1313 9 14 10
Berlin 10 1275 10 14 20
Sydney 11 1273 11 9 14
“...we often looked across
Table Bay at the magnificent Seoul 12 1269 12 13 12
silhouette of Table Mountain. Los Angeles 13 1256 13 7 8
To us on Robben Island, Table Chicago 14 1245 14 11 13
Mountain was a beacon Tokyo 15 1244 15 8 8
of hope. It represented the Madrid 16 1197 16 21 17
mainland to which we knew
Dubai 17 1088 17 18 17
we would one day return.”
Milan 18 1006 18 20 21
Nelson Mandela Beijing 19 (1) 965 19 (1) 16 (1) 15 (1)
Kuala Lumpur 20 (2) 937 20 (2) 25 (7) 22 (4)
Moscow 21 (3) 912 21 (3) 17 (2) 17 (3)
Shanghai 21 (3) 912 21 (3) 19 (3) 16 (2)
Mexico City 23 (5) 838 23 (5) 23 (5) 26 (8)
Cape Town 24 (6) 803 24 (6) 22 (4) 29 (11)
Johannesburg 25 (7) 797 25 (7) 26 (8) 28 (10)
Bogotá 26 (8) 720 26 (8) 23 (5) 23 (5)
São Paulo 27 (9) 711 27 (9) 27 (9) 24 (6)
Rio de Janeiro 28 (10) 681 28 (10) 30 (12) 27 (9)
Mumbai 29 (11) 602 29 (11) 27 (9) 25 (7)
Jakarta 30 (12) 569 30 (12) 29 (11) 30 (12)
Lagos 31 (13) 328 31 (13) 31 (13) 31 (13)
High-income countries Cape Town
Middle-income countries
20 PwCPicture taken by Wessel Van Wyk
City gateway Health, safety and Sustainability and the Demographics and Transportation and Economic clout Ease of doing business Cost
security natural environment liveability infrastructure
1 8 13 3 8 1 3 27
6 6 21 17 1 9 1 12
18 2 3 7 11 13 4 3
2 10 7 1 8 8 6 27
7 16 15 1 7 2 7 26
11 7 5 6 16 10 13 16
22 4 2 10 3 10 5 19
20 12 8 5 5 4 13 19
4 11 18 11 13 13 2 15
15 4 5 8 4 26 12 5
19 3 1 13 8 6 15 16
10 13 4 15 14 18 8 14
16 15 14 4 20 19 9 4
17 16 11 9 5 19 11 8
3 1 16 12 19 17 16 25
12 9 9 14 12 5 17 9
8 18 30 18 2 13 21 6
21 13 9 23 17 16 18 24
5 (1) 23 (5) 23 (6) 22 (5) 24 (6) 3 (1) 25 (7) 31 (13)
13 (3) 25 (7) 27 (10) 25 (7) 18 (2) 12 (3) 9 (1) 7 (3)
14 (4) 24 (6) 12 (1) 19 (2) 22 (4) 24 (7) 24 (6) 29 (11)
9 (2) 20 (2) 24 (7) 21 (4) 24 (6) 7 (2) 28 (10) 30 (12)
26 (8) 19 (1) 22 (5) 16 (1) 23 (5) 21 (4) 22 (4) 18 (7)
29 (11) 21 (3) 17 (2) 30 (12) 14 (1) 28 (10) 18 (2) 2 (2)
24 (6) 22 (4) 20 (4) 27 (9) 28 (10) 24 (7) 20 (3) 1 (1)
30 (12) 30 (12) 26 (9) 26 (8) 26 (8) 30 (12) 23 (5) 10 (4)
23 (5) 25 (7) 25 (8) 24 (6) 26 (8) 28 (10) 26 (8) 12 (6)
27 (9) 28 (10) 19 (3) 20 (3) 21 (3) 31 (13) 27 (9) 23 (10)
28 (10) 29 (11) 28 (11) 28 (10) 29 (11) 21 (4) 29 (11) 19 (8)
25 (7) 25 (7) 31 (13) 29 (11) 30 (12) 23 (6) 30 (12) 11 (5)
31 (13) 31 (13) 28 (11) 31 (13) 31 (13) 27 (9) 31 (13) 22 (9)
Rank out of 31 cities (rank out of 13 middle income country cities, if applicable)
Cape Town – African city of opportunity 21Cape Town: African City of
Opportunity
How Cape Town compares
In this special edition of Cities of
Opportunity, PwC builds on the success Fig. 4 Overall score (Middle-Income-Country City (MICC) score)
of our latest global study and our 2014
publication Into Africa. Cape Town, the
Top 14 (1)
oldest city in South Africa, is the newest
addition to our series. For this report,
we used the scores of the 30 cities 17 (2)
included in our latest (seventh) global
study, and scored Cape Town against 18 (2)
the same metrics.
2 (2)
Although the city is old historically, it
has only existed in its current political
Middle 22 (4)
form since 2000 when the seven
administrative regions were merged
to form a ‘Unicity’. This move was in 21 (3)
keeping with a global trend towards
city-devolution, putting Cape Town on Bottom 28 (10)
a par with cities like London, which
gained a powerful assembly in the same 29 (11)
year.
However, unlike London, Cape Town’s 29 (11)
new government inherited a disjointed
system with poor finances, crumbling 30 (12)
infrastructure and basic service delivery
that was struggling to reach the people This table shows Cape Town’s scores for each of the 10 indicators relative to the
that needed it most. Under these other 30 global cities. The score in brackets shows its score compared with the
circumstances, the administration was 13 cities in middle-income countries
unable to devote its full attention to
solving the city’s many socioeconomic
problems, such as unemployment, These strong fundamentals have These goals are symbolic of the context
crime, drugs and illiteracy. allowed the city to pursue an agenda of in which many aspiring African cities
socioeconomic development, embodied find themselves:
Seventeen years later and the story is in the strategic pillars of its five-year
one of comparative success. Revenue Integrated Development Plan (IDP): • How to find the balance between
collection and capital budget spending creating economic opportunity
are near 100% and the city is rated as • Opportunity City for those who can grasp it and
having both the cleanest audit (by the extending the safety blanket of the
• Safe City
Auditor General) and the best service state to those who need it?
delivery (by citizens) of any South • Well-run City
African metro.8,9 • How to create a modern economy
• Caring City with high paying jobs, when a large
8 General Report on the Local Government • Inclusive City number of the population cannot
Audit Outcomes 2015-16, p. 8, Auditor- read or write?
General South Africa. Cape Town was the
only metro to receive a fully unqualified • How to convince people that
audit opinion.
education is their route to
9 The State of Basic Service Delivery in prosperity when their route to
South Africa: In-Depth Analysis of the education is often unsafe and
Community Survey 2016 Data, Statistics
South Africa (March 2017). Citizens were
unfordable?
asked to rate the quality of overall service
delivery for water, electricity, sewerage With such polarised needs and
and refuse. The proportion of respondents ambitions, citizen-centric government
saying “good” for each service was is a real challenge.
highest, on average, for Cape Town.
This study asks an important question:
As urbanisation and global competition
increase, how can African cities
compete with the best in the world?
22 PwCWith an unemployment rate 13 Does income drive success? winners in Chemistry, Medicine and
percentage points lower than the Literature, its population as a whole
national figure, and 10 points lower This study adds a new element to the remains uneducated, and while tourists
than the average metro, Cape Town is a analysis, borne out of two realisations: can relax in its safe Waterfront areas
city of genuine opportunity for millions • That the prosperity of a country is (see page 48), city-wide crime statistics
of people. But the city’s ambitions go a strong (though not prescriptive) reflect the dangerous daily lives of its
beyond South Africa, as evidenced by determinant of the success of its many informal township dwellers.12
its membership of some of the world’s cities.
most influential urban forums, such as Because Cities of Opportunity’s
C40 Cities, 100 Resilient Cities and the indicators are weighted towards
• That benchmarking is most useful
Partnership for Healthy Cities.10 measures of the population as a whole,
when it compares like with like.
Cape Town scores poorly in some areas
In order to compete on the global stage, For this reason, we analyse each of that surprised the research team.
it is important to know where the city the indicators throughout this report
currently stands. This study aims to For example, many global ranking
using two sets of scores. The first score
answer that question by benchmarking bodies rate Cape Town as both a global
is versus all 30 other cities, and the
Cape Town against 30 of the world’s tech hub and a city with unrivalled
second against only the 12 other cities
leading cities across 10 indicators of quality of life. The outsized number of
which, like Cape Town, are situated in
urban success. These indicators are start-ups and venture capital firms and
middle-income countries, as defined by
grouped under three headings as the rate of house price inflation on the
the World Bank (see page 10).
follows: Atlantic seaboard are testament to this.
Power, establishment and
However, in all of these areas (Tech
Tools for a changing world inequality
readiness, Intellectual capital and
• Intellectual capital and Overall, Cape Town comes 24th out innovation, Quality of life) Cape Town
innovation of all 31 cities, and sixth out of the scores average or below because the
• Technology readiness middle-income country cities (MICCs), indicators chosen reflect not only the
• City gateway behind Beijing, Kuala Lumpur, Moscow, well-educated graduates who live in
Shanghai and Mexico City. It is also top Green Point and work in the vibrant
Quality of life in Africa. tech sector. Metrics such as Percentage
• Health, safety and security of population with higher education,
• Sustainability and the natural Its strongest scores are for Cost, Ease Maths/science skills, Health system
environment of doing business, Transportation and performance, and Internet access in
Infrastructure, and Sustainability schools are all areas where the rich and
• Demographics and liveability
and the natural environment, with the poor experience life very differently.
• Transportation and moderate scores in Intellectual capital
infrastructure and innovation and Health, safety and Much of this is easily traceable to
Economics security. Areas for improvement include South Africa’s apartheid past – two-
Economic clout, Technology readiness, tiered systems of education and
• Economic clout health, for example, have a legacy
City gateway, and Demographics and
• Ease of doing business liveability. that has proved hard to erase. Such
• Cost entrenched problems cannot be solved
While each of these scores has its own at the city level, but can be alleviated
These indicators, and their 66 unique, underlying factors, there are with long-term collaborative action
underlying data points, have been some themes that come through more from government, business and civil
refined over the past 10 years we than once. More often than not, the society. Cape Town’s unemployment
have conducted this study, but the city’s areas of strength are those that rate – more than 10 points lower than
central thesis behind them remains it has been devolved more power to the national level – demonstrates the
the same: The more well-balanced control, while its areas of development power of cities to lead the national fight
a city is socially, economically and often come down to one of two factors: against inequality.
environmentally, the better it will Global competition and, most notably,
fare for businesses, residents and inequality. Monopoly capitals
visitors.
City of unequal opportunity? Although global economic shifts are
10 Expanded definition of unemployment: a significant megatrend, the world’s
Cape Town: 23.4%, Average of 7 other South Africa remains the most unequal leading cities are still found mainly
metros: 33.1%, South Africa: 36.1%. See: country in the world, and though this in the 20th century’s centres of
Quarterly Labour Force Survey, fourth is less pronounced in Cape Town, it global wealth – Europe and North
Quarter 2017, Statistics South Africa
remains very unequal by international
(February 2018).
standards (see page 56). 11 Inequality
12 Among others: Literature, JM Coetzee,
means that even as Cape Town’s 2003 (UCT); Physiology and Medicine, AM
universities produce Nobel Prize Cormack, 1979 (UCT); Chemistry, Aaron
Klug, 1982 (UCT).
11 Of countries with populations greater
than 1m; some small islands may be more
unequal. See: GINI Index (World Bank
estimate), Development Research Group,
World Bank (2011).
Cape Town – African city of opportunity 23America.13 This places Cape Town at some of these problems – Road safety, The city also benefits from a business-
a disadvantage in certain catergories, Crime, Internet access in schools, but friendly regulatory environment and
in particular City gateway and which are too recent to have affected low costs, ranking first for Cost of
Demographics and liveability. the respective scores. Devolution is business occupancy.
likely to continue in South Africa but
In the latter category, many of the cities will only ever control a piece of Indeed, for Cost, Cape Town boasts a
variables measure traditional cultural the jigsaw that determines outcomes much greater quality-of-life to cost-
metrics. For example, the top three for their residents; for the rest they of-living ratio than all other global
cities for Entertainment and attractions must collaborate. cities, bar Johannesburg, the difference
are, predictably, London, Paris and between the two largely explained
New York, whose museums and art The following section highlights some by the cost of housing. Expatriates
galleries are world renowned. Cape of Cape Town’s top, middle and lower who move to the ‘Mother City’ can
Town may be home to the continent’s scores. enjoy a quality of life afforded by few
largest contemporary art museum, but other places in the world, a factor that
this is always likely to be a threshold Top of the table increases the city’s scores in many
competency for the city, when other areas – for example, Relocation
Transportation and infrastructure is one
compared to some of its more core attractiveness.
of the city’s strongest areas, finishing
offerings – beauty, nature, outdoor
top among the MICCs and 14th in the Areas of good hope
activities and wine. Cities need to
global study – ahead of Amsterdam,
understand their ‘whole place’ and Cape Town is in the bottom third of
Milan and Tokyo. Interestingly, the
some benchmark scores require less the global study but the top third of
city’s best scores – for traffic and
attention than others. the MICCs for Intellectual capital and
commuting – are actually areas the city
A low score for City gateway reflects and its citizens are most concerned innovation. Inequality dampens the
Cape Town’s position in the world, with (see page 61). Rapid urbanisation city’s ability to compete in overall
geographically and historically and limited space between an ocean levels of higher education and maths
– excluding China, just eight of and mountains mean enabling people skills. Despite this, its world-class
the world’s 50 busiest airports to get around is a competency that universities, a supply of well-educated
are in middle-income countries.14 requires constant investment. Cape immigrants (see page 57), and a
Nevertheless, this is an area where Town has largely achieved this so far, coalition of successful ventures – such
many other middle-income cities are and has future plans that, if realised, as the Cape Innovation and Technology
beginning to redefine themselves with will unlock transport as a way to Initiative (CiTi) – have allowed it to
great success – albeit often as part of tackle the city’s structural and spatial become an innovation hub – with more
a wider strategy built around their inequality. than 20 accelerator programmes and
national carrier. incubators.
Sustainability and the natural
Power and control environment is another of Cape Town’s Health, safety and security is an area
better scores, finishing 17th out of 31 where Cape Town does moderately,
There are certain scores that a city and second among the MICCs. This will finishing 21st out of 31 and third
administration cannot control at all come as no surprise to the millions of amongst the MICCs. The scores
– such as demographics or Thermal annual visitors to the Western Cape’s describe a city that has a low
comfort – but in most other areas nature reserves, mountains and blue macroeconomic, political and disease
control will be shared between several flag beaches. For business, a host of risks, partly driven by the sound
different stakeholders, including the green initiatives and job-creation governance of the city administration.
different spheres of government (see programmes look set to build on Cape However, providing quality healthcare
page 81). We find that in many areas Town’s status as a tech hub with new and personal safety to large numbers
where the city government is largely green technologies and associated of the population remain development
responsible – Transportation and industries. areas.
infrastructure, Ease of doing business – it
scores well. In areas where power is However the drought – the region’s
shared and there is little collaboration worst in over 300 years – has brought
– Health system performance, Crime – the city to the brink of turning off
scores are lower. the taps, highlighting the need for
serious investment in both supply
However, in some cases the city has and demand measures. As the global
collaborated well with other bodies climate continues to change, it is likely
to improve scores – examples include that other cities will have much to
World Top 100 airports and Ease of learn from Cape Town’s ongoing water
entry. In other areas, this study has resilience project.
uncovered collaborative initiatives that
have recently been put in place to solve Ease of doing business is another top
area for Cape Town, which reflects the
strength of South Africa’s legal and tax
13 Megatrends, Issues, PwC UK, web page
(2018).
institutions, and which seems likely to
be strengthened in the eyes of business
14 Worldwide Airport Traffic Report, Airports by the recent presidential election.
Council International (2016).
24 PwCPicture taken by Wessel Van Wyk
“To the people of South Africa, the Table Mountain
Range represents a great deal more than the rocky
remains of millennia of sediment. It is of immense
ecological, cultural, religious and economic
significance not only to the Western Cape Region, but
also to the rest of the country.”
Nelson Mandela
Picture provided by The City of Cape Town
Cape Town – African city of opportunity 25Warning signals This category places high value on These implications are aimed not
cultural assets, in which many of the just at the City of Cape Town and
Technology readiness is an area cities in this study excel. London’s the Western Cape Government. A
where Cape Town’s low score belies National Gallery, one of many in the common theme in this report is the
a rising trajectory and a real sense of city, welcomes three times more visitors need for collaboration and collective
excitement. Technology is both a major per year than Cape Town International responsibility. Businesses and citizens
area of success for the city within South Airport.19 The recent opening of the are as much responsible for – and have
Africa – it is home to around 60% of biggest museum of contemporary much to gain from – a successful Cape
all tech start-ups – and a key strategic art in Africa, will strengthen, but not Town. We set out ways in which each
focus area.15 Furthermore, the city was redefine, Cape Town’s place as a global of these groups can help to make that a
recently named amongst just 22 “cities art and culture centre. reality in the coming years.
at the forefront of global tech”.16
With national GDP per capita the fourth
Its low score in this study can also be lowest among cities in this study, it is Implications
explained partly by low education little surprise that Cape Town comes
levels – for example, in ICT and software third bottom for Economic clout, though • Make education and safety
design – which may take time to rectify. this is not black and white. The city top priorities, even though
The city’s digital infrastructure, on the comes seventh overall for Employment they are complex;
other hand, is rapidly changing: While growth, while a look at its Foreign-direct
we were carrying out this study, a • Embrace technology and
investment (FDI) reveals an area of huge innovation and don’t be
major rollout of internet across the city potential. Cape Town’s FDI strategy
and in schools was underway. While scared to experiment;
was recently voted in the top 25 in the
this means that the city is likely to fare world.20 • Make resilience about
better in future studies, it should be more than water;
noted that other cities in this study may Opportunities for improvement
have also made similar investments in • Learn from the best;
what is a crucial area: Studies like this are of minimal use if
they simply present a set of numbers. • Build on the success of
In the digital world, standing still is Instead, we have tried to present each tourism;
moving backwards. measure within its South African,
continental and global context, to • Collaborate widely;
Cape Town’s low score for City gateway give an understanding of why the city
is easier to explain – it is at the very tip • Adopt citizen-centric
performs well or poorly and to make
of Africa and Johannesburg’s airport is government;
recommendations for the future. Our
the established regional hub. But this recommendations are based on the • Embrace big data to solve
is also an area of rapid recent growth: findings of this global study, further big problems;
Airport passenger numbers are up 24% analysis of local data and also take into
year on year and it has been voted ‘the account our Future Cities framework • Actively drive data-led
best city in the world to visit’ by readers (see page 15) which asks whether cities delivery;
of the Telegraph newspaper in the UK are set up to succeed.
for the past three years.17 • Attract and retain the best
19 Cape Town International Airport – people; and
A low score in Demographics and Passenger Traffic, Airports.co.za
liveability may raise eyebrows –Cape (September 2017). • Build on strong
Town was recently voted Africa’s 20 Global Cities of the Future 2016/17 – foundations.
most liveable city (and can do little Winners, fDi intelligence (division of the
to change its demographics).18 This Financial Times) December 2016
score is partly methodological; Cape
Town’s high quality of life is derived
from factors covered elsewhere in this
study, for example the cost of living
(Cost) and the beach and mountains
(Sustainability and the natural
environment).
15 Cape Town Tech Centre Infographic 2017,
Silicon Cape Initiative (2017).
16 Tech Cities 2017, Savills World Research,
web page: Savills world research/2017.
17 The World’s 50 greatest Cities – according
to you, Travel Section, The Telegraph
Online (29 August 2017).
18 The Top 10 Most Liveable Cities in Africa,
Africa.com (2016)
26 PwCCape Town has made significant Tourism is one of the pillars of the The real test of delivery is to
progress in tackling one of the Western Cape economy, and grows successfully tackle the city’s most
country’s most pressing problems – every year. The city must look to build longstanding and complex problems
unemployment. Education and safety on the success of tourism by using – inequality, education and safety.
are problems with similar roots in it as a shop-window for the wider Doing this will take considerable effort
historical inequality. Solving these will economy. Collaboration between and wide collaboration across the many
be as difficult as they are rewarding for government, business and citizens is responsible and affected groups, of
both city and citizens. key and bodies such as Invest Cape Town which the city government is just one.
and Accelerate Cape Town can help to
At the same time, the city should coordinate this. In order to realise these opportunities,
continue to embrace technology and the City of Cape Town must attract
innovation, adopting a ‘digital by If it can be achieved, citizen-centric and retain the best people. As the
default’ mindset which accepts that in government results in tailored, future of work changes, this means
the digital world failure is often the first responsive services for each citizen, accommodating new, technology-
step towards success. which improves satisfaction levels and driven ways of working and using data
saves duplication and waste. Doing to help better match the needs of the
Cape Town has embraced resilience as this would require significant data on organisation and the employee.
a concept (employing a Chief Resilience Cape Town’s four million residents and
Officer in 2017) but the city’s recent reliable, accessible communication At the same time, the city should
water crisis has required a hard shift channels, both of which can be continue to build on its foundations
from theory to reality. Resilience is achieved with digital channels like of urban finance, infrastructure and
about more than just responding to citizen engagement apps. governance that have given it the strong
physical threats such as drought (see platform it enjoys today.
page 52). As the city draws up plans Data in government is important to
to provide water in the long term, it Cape Town in two other ways. First, big
should also be aware of and ready to data can be used to help government
react to financial, economic and social find more efficient ways of delivering
shocks. services, whether in improving
refuse collection or housing waiting
This study highlights innovative lists. Second, the administration can
solutions from across the world to measure performance data to actively
water shortages, recycling, citizen drive data-led delivery of its key
engagement and many more. In an priorities, from opportunity creation
ever-more connected world, Cape Town to water resilience and safe streets and
should constantly look to learn from homes.
the best cities in each of these areas.
Its membership of bodies such as C40
Cities and 100 Resilient Cities will aid
this.
“The Western Cape Government’s project to expose over
1,1million learners to a new way of teaching and learning
by 2019 is a significant commitment to system-wide change
strategy.
The eLearning Game Changer is delivering the
infrastructure and technology required to support future-
ready school leavers, but also focuses on developing willing
and competent teachers to integrate quality digital content
into the learning experience.
The impact of this holistic approach is closely monitored to
ensure that this investment supports government’s desire for
improved literacy and mathematics results, creating better
opportunities for young people in the Province to succeed”
Penelope Tainton, Lead of eLearning and After School
Game Changers,
Western Cape Government
Cape Town – African city of opportunity 27Tools for a
changing
world
In today’s ever-changing world, people, technology and information are cities’ most
valuable assets. Success depends on the ability to nurture or attract the best talent
and to create the right conditions for these ‘tools for a changing world’. We assess
cities’ future readiness with three indicator groupings: Intellectual capital and
innovation, Technology readiness and City gateway.
28 PwCCape Town – African city of opportunity 29
Score
London 1 191
San Francisco 2 178
Paris 3 175
Toronto 4 172
Amsterdam 4 172
New York
1. Intellectual
6 164
Los Angeles 7 157
Tokyo 8 155
capital and
Sydney 9 153
Stockholm 9 153
Chicago 11 152
innovation Singapore
Seoul
Hong Kong
12
13
14
142
141
137
Berlin 14 137
One of the great benefits of graduates compared with 5.5% in Cape Beijing 16 (1) 113
urbanisation is increased productivity.21 Town.23
This is due not only to traditional Moscow 17 (2) 100
economies of scale in production, Cape Town scores moderately in Dubai 18 99
transportation and service provision, this study for Intellectual capital and
but also to knowledge spillover innovation, finishing 22nd out of the Shanghai 19 (3) 96
effects – where ideas are shared and 31 global cities and fourth out of the 13 Milan 20 92
opportunities realised more quickly middle-income country cities (MICCs).
Madrid 21 83
when people and companies physically
The city’s best score is for Libraries with
interact. Cape Town 22 (4) 74
public access, where it outperforms
However, crowding alone does not global leaders such as Amsterdam, Mexico City 23 (5) 71
lead to better outcomes. In order to Tokyo and Toronto. It also scores well Bogotá 23 (5) 71
benefit, cities must have well-educated for Intellectual property (IP) protection,
Kuala Lumpur 25 (7) 69
workers and an enabling culture.22 For which is measured at the country level
those who succeed, these effects are and is testament to South Africa’s Johannesburg 26 (8) 54
self-reinforcing – cities with high levels robust legal institutions – particularly São Paulo 27 (9) 46
of Intellectual capital and innovation among developing countries.
Mumbai 27 (9) 46
attract well-educated, innovative Start-up city
people. Jakarta 29 (11) 43
Cape Town has become a hub for Rio de Janeiro 30 (12) 42
Being known as a knowledge economy incubators, start-ups and tech firms in
hub is a huge advantage for cities. For Lagos 31 (13) 28
the past few years (see page 36), all of
example, despite the UK’s vote to leave which depend on the protection of IP. High-income countries Cape Town
the European Union, few commentators However, a poor score in the Innovation Middle-income countries
think London will lose its place as the Cities Index and Entrepreneurial
global centre of finance anytime soon. rankings thanks to the reputation of the
environment indicates that Cape
Much of this is due to the pool of talent Universities of Cape Town (UCT) and
Town still has some work to do in
at its disposal, and the pedigree of its positioning itself as a global tech hub Stellenbosch.24
universities, which are hard for other when compared with cities such as San
cities to recreate – more than 60% The Times ranked UCT 171st in the
Francisco and Amsterdam.
of London residents are university world for 2018, and fourth out of the
A city’s Intellectual capital and BRICS/Emerging economies.25
21 The World Bank finds that a doubling of innovation score is driven by levels of
city size increases productivity by 5%. education – both basic and higher. Of 24 The University of the Western Cape was
See: Africa’s Cities: Opening Doors to the also added to the Times Higher Education
World, World Bank (2017). the MICCs, Cape Town comes a close World University Rankings 2018, finishing
second to Beijing for World University 102nd out of BRICS/Emerging economies,
22 This is hard to measure, but Glaeser finds but it was not ranked at the time of this
that a 10% rise in the percentage of city research and does not affect Cape Town’s
workers with a university degree in cities 23 See: Graduates in the UK Labour Market score.
leads to a 22% rise in output. See Triumph 2013, Office of National Statistics (2013);
of the City: How Our Greatest Invention and Community Survey 2016, Statistics
Makes Us Richer, Smarter, Greener, South Africa (2016). 25 See: World University Rankings 2018,
Healthier, and Happier, Glaeser (2012). Times Higher Education, (2018).
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