NEWS UPDATE 51 - CAPE TOWN SPECIAL: A CREATIVE CITY IN THE MAKING?

COMING SOON: TOURISM AND THE INTERNET AND SA'S DIGITAL PLANET
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Cape Town is one of the few cities on the African continent that can make a
claim for being a creative city. News Update's Russell Southwood looks at
what this means, why it's important to the development of new media in
Africa and how Cape Town measures up when looked at from this viewpoint.

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CAPE TOWN SPECIAL: A CREATIVE CITY IN THE MAKING?
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Normally News Update focuses fairly closely on African new media content,
technology and the regulatory frameworks that control these two areas. In
this one-off, special issue we take the lens out a little wider to focus on
a range of issues that will be crucial to a concern about whether Africa
will make its mark in international content markets.

Cape Town played host to an important set of conferences at the beginning of
the month. The G8 Dot Force met followed by the African Telecommunications
Union's Ministerial Oversight Committee and then the Commonwealth Expert
Group on Information Technology. At the same time there was the Fourth
International Design Indaba (see http://www.designindaba.com). Ravi Naidoo,
host of this year's event wants it to become the "Cannes" (the annual
international film festival in France) of the international design sector.
Cape Town is clearly putting itself on the international map in a way that
could make it a creative city.

What is a creative city? Internationally, you can say quite easily that
places like New York, Los Angeles, London and Paris are powerhouses for the
production of content that is sold all over the world. Things happen
creatively in cities that exert a powerful gravitational pull on creative
people, both culturally and economically. For example, if you want to make a
big budget movie, you'll need to be in Los Angeles for some time. The giants
of English-language publishing are found in London and New York. Design "hot
spots" are better distributed but are nearly always close to major creative
centres.

So why is the existence of creative cities important to the development of
new media in Africa? Because the technology is simply "a big biro". Unless
you've got something to say (and/or to sell), you will not attract
attention. In the developed world's content markets there is a voracious
appetite for new ideas and influences from other cultures. The effect of
what is sometimes called the "three minute culture" can often mean that this
interest often has an extremely short time-span before it moves on to the
next new thing.

The "buzz" of new ideas comes from creative people being immersed in a wide
range of experiences and influences. This tends to happen in cities where
cultures collide in the same breath as social problems. Africa is largely
rural and its cities are not always memorable in a positive sense. But it
will tend to be out of these cities that the exciting cultural ideas and
products will come. This won't exclude rural experiences or a relationship
with those in rural areas but the skills required to articulate these
experiences will tend to continue to be found in cities. Without these
skills, new media in Africa will remain a one-way traffic going North-South.
South Africa has the content and technical skills to reverse this flow. Cape
Town is potentially a bridgehead for that process,

The factors that lead to the growth of a creative city are outlined below.
Against these headings, we look at how Cape Town measures up:

* A critical mass of creative people with access to technical resources

Most African economies remain production-oriented (for example, mining)
rather than consumer or service-oriented. When we visited four African
countries for the first issue of News Update (4.1), the number of designers
in each was quite small with the exception of Kenya. Likewise their
advertising and broadcast sectors. Cape Town is a positive giant using this
kind of head count.

According to Alan Levin of the Cape Information Technology Initiative
(CITI), there are 40-50 internet and technology companies in Cape Town, 35
of which are members of CITI. Although the majority of South Africa's
technology companies are clustered in Gauteng, Cape Town has a profile as
the place where the creative content work gets done. It is also home to a
number of large companies (M-Web, World Online) and several of the larger
ISPs. However Cape Town is too small as a city by itself to support a wide
range of companies so most market their work beyond the City's boundaries to
Johannesburg-based companies and elsewhere.

One of CITI's major initiatives is the Bandwidth Barn that seeks to create
an ICT cluster in a 4000 sq m building in central Cape Town that offers
excellent bandwidth in the local context. This serviced office premises is
home to 25 companies with access to file-serving and groupware across the
building.

On a broader front, it is claimed that South African advertising agencies
are consistent winners at international competitions and are regarded as the
most polished producers outside Britain and America. Not all are based in
Cape Town but a significant number are found there. The allied film industry
generates around R2 billion annually in an average of four to six film
shoots a day in the Cape Town summer season. There is a spread of design
companies who are earning a significant proportion of their income in
overseas markets. South Africa often produces some of the freshest design
and craft products and these are found in some profusion in Cape Town.

However, unless Cape Town's creative companies can expand their markets
internationally, its creative ambitions remain on shaky ground. The
vulnerability of these "assets" is perhaps best exemplified by the
"pull-back" at M-Web (see below) and the recent closure of Dockside (more in
issue 52 to follow).

* Plural legislative framework for content production and independence of
production

Creative people need the freedom to express themselves and sufficient
independence to be able to develop their ideas. Neither of these qualities
is widely available on the African continent. Too many of its politicians
fear the bracing effects of free expression. Under admittedly difficult
circumstances, the current generation of ANC politicians are remarkably
thin-skinned. Nonetheless Cape Town and more widely South Africa as a whole
has a widely respected old media in its newspapers.

However in the more sensitive field of broadcasting, things are much less
well developed. The SABC/ETV duopoly produces only a small amount of local
content and from the little we saw, not much of it is remarkable. Perhaps
the economic underpinning for this type of local content is hard to find:
people who lack purchasing power are poor prospects for TV advertisers. The
ambitions of the consortium that launched ETV may have been too "scattergun"
and the company has had to be rescued by Rembrandt.

Sources close to the Government say that it will look again at broadcasting
once it has got through the Telkom IPO and the opening up of the telecomms
market. There has been some discussion about the possibility of regional
broadcasters and this would greatly strengthen Cape Town's position. However
the underlying question of size of market remains.

Politicians and regulators could do worse than look at what has been
achieved in the UK through uncoupling the production and commissioning
roles. Broadcasters need not contain both these functions. With the UK's
Channel 4 acting effectively as a "publisher" rather than a production
entity, its output lead to the creation of a large number of independent
production companies that helped the growth of the media sector in the UK.
This growth was underpinned with the parallel growth of post-production
facilities. With media being digital, the convergence of broadcast and new
media has opened a whole fresh field of potential growth opportunities.
There is no need for slavish copying but there are lessons in growing the
broadcast sector as an important content producer.

In a parallel field, many we spoke to were concerned to see a proper
licensing framework for community radio. There needs to be more flexibility
so it is possible to see if there is the stamina and skills required to make
a station a success. Stations of this kind can act as the "A & R" research
function for larger commercial stations. Local music producers can get their
music heard and a local market for music can take off even amongst the
poorest of the poor. Reggae in Jamaica grew up out of the slums of Kingston.

* The ability to take cultural influences from a wide range of sources and
make them your own

A music like reggae came out a wide range of influences. Over time it beg,
stole or borrowed its influences but made each thing it acquired its own. It
stayed rooted in its local context but negotiated an ever widening sphere of
influence and markets. This negotiation between the locally produced
cultural product and the internationally sold is not without pain. Things
need to be changed to make them accessible to other people. Trends come and
go. No-one group of people is more aware of this than Africa's musicians
themselves who have been feted and left more than once.

However the most interesting culture that has had any purchase on people's
"mindspace" and in international markets has come come about from the mixing
(or creative tensions) between cultures. A UK visitor to the Design Indaba
captured that spirit:"Cape Town feels like a town in flux, and it's this
disequilibrium that can be such a fertile ground for creativity. It's really
how this flux progresses and resolves that will determine how the creative
environment in South Africa develops."

In a short time in a city, it is difficult to spot the different ways in
which the processes of cultural change and fusion are taking place. But
always it is about how creative people seek to "push the envelope" in terms
of existing forms or ways in which users can do things. And this process
remains in tension with traditional cultures and received ways of doing
things. Metaphorically it's like the wire sculpture radios on sale in Cape
Town. It's about blending a culture of production that is uniquely South
African with a modern twist.

* Ability to deal with regional and international markets

All creative cities worldwide have the ability to deal with both their
regional and international markets. This makes them interesting to other
content buyers and assures their place on the map. In turn your markets
(both national and regional) have to be large enough to warrant attention.
If you're over 12 hours or more by air from your main international markets,
there has to be a lot of good reasons for them to come and see you.

Cape Town has the potential to be the actual (rather than virtual) creative
portal to South African content markets and a range of other regional
markets in Africa. (A small diversion: Why Cape Town rather than
Johannesburg? Try visiting downtown Jo'burg without an armed guard and no,
creatives don't do business in the suburbs. Tell me that the fear of crime
in that city does not place clear physical limits on the mixing of cultures
described in the previous section.)

Cape Town is base for one the continent's largest African ISPs, M-Web and a
division of UUNet. However the recent launch of ABSA's free ISP (in
association with the UK's Affinity PLC) means that M-Web has cut back on
staff and halted its expansion into the rest of Africa. Tanya Aconne, its
Executive Producer for content outside South Africa has left to go to UNICEF
to work on their web development.

ABSA's move could not have come at a worse time for M-Web. It has achieved
260,000 subscribers and although in subscription terms its breakeven point
is still some way off, the distance to be covered is not as great as you
might imagine. It sees the free subscription ISP as a short-term threat but
one that it will see off in the medium term. ABSA has attracted over 60,000
subscribers and the only other "free" ISP Excess I-Net is believed to have
only 40,000 subscribers. Since Affinity is paying ABSA for each subscriber,
it is simply a question of how deep their pockets are. Some say a year but
nobody really knows. M-Web claims that its "walled garden" strategy of
restricting content to paying subscribers (a sort of AOL in reverse) is
working and that they're holding the line in subscription terms.

Notwithstanding these short-term local difficulties, M-Web is well placed to
expand in content terms. Its parent company owns magazines and newspapers, a
digital satellite channel (that sells across the continent), interesting
technology companies and an education company. Not a bad hand from which to
start to address regional and international markets but will they be
interested in doing it through new rather than re-used content?

The difficulty for Cape Town (and South Africa generally) is that even
though it is one of the continent's largest markets in all senses it remains
small in content terms. Something pretty amazing has got to happen to put
the spotlight on Cape Town that goes beyond the odd bit of international
work and occasional conferences. Jamaica and reggae were put on the map
internationally through the success of the film The Harder They Come. Other
countries like Australia have made their presence felt through film and
broadcasting. It supported its film industry for both cultural and economic
reasons. It is hard to be suggesting the idea of supporting local
film-makers when there are so many pressing social concerns but maybe that
is what it will take.

Cape Town (and South Africa more generally) has the talent and probably the
ideas to become a presence in the international league. It has the potential
to become a creative city but only its ideas and talent will show whether it
can lay its hands on that elusive status.

Acknowledgements

Some of the ideas used in this article have been drawn from two books and an
article: The Creative City, Charles Landry, Comedia and Bass Culture - When
Reggae was King, Lloyd Barrett. The latter is a history of reggae music and
its spread around the world. The article Designed in SA was published in the
March 2001 issue of City Life and some quotes are taken from it.

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NEWS ROUND-UP AND SNIPPETS
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This news round-up and snippets comes from the first day of public
presentations to the Commonwealth Expert Group on Information Technology
looking at ways of tackling the digital divide (5-7 March 2001). This group
reports later in the middle of the year and we will cover its conclusions:

* SOUTH AFRICAN IMMIGRATION BARS COMMONWEALTH EXPERT

Pity poor Kenwyn Austin, the Commonwealth expert from Trinidad and Tobago.
He was told that a visa was not needed for entry to South Africa as he had a
South African government invitation and also a valid passport. His long
journey started with a 15 hour flight via New York to Cape Town. Despite
showing his official invitation, he was told he needed a visa. He then paid
for the visa application and waited for five hours before being told that he
was officially denied entry to South Africa. He then had to return to
Trinidad on a flight that took a further 18 hours. There were similar
difficulties in the UK at the ACT 99 Summit in Cambridge when a number of
African delegates were denied entry to the UK. Whilst we understand that
Immigration authorities everywhere have a job to do, why do they always fail
to play a helpful role just when you need it most?

* TEN YEARS TO GET CONNECTED - A SENTENCE OR A COMMERCIAL OPPORTUNITY?

The meeting received a presentation providing a statistical framework for
the digital divide within the Commonwealth from the Commonwealth
Telecommunications Organisation. Based on 1998/99 data, it can take up to
ten years to get a phone in the following countries: Gambia, Lesotho, Malawi
and Zambia. Others that are remarkably slow in providing what their people
will actually pay for are: Kenya (6.5 years), Swaziland (5.8), Mozambique
(4.2), Nigeria (4.2), Zimbabwe (4.2) and Tanzania (3.6). Whilst there have
clearly been improvements in some of these countries since these statistics
were provided, others have only made slow progress in offering phone
connections. According to the African Telecommunications Union, a phone
connection cost four times as much in Africa as it does in the USA (US$2000
as against US$500).

This failure to provide landlines has caused a rapid growth in mobile
connections. So for example Malawi which is a "fixed line laggard" has
experienced faster than average growth rates (200%) in mobile connections.
Outside the meeting, one private sector person even told me that his mobile
connection out of Nigeria was faster than the landlines there. According to
the presentation by Guy Giradet, the CTO's Special Development Adviser, the
cost of internet access (based on 20 hours off-peak use) in Uganda is just
under half the price of that found in Kenya.

There are of course in the words of UK politician Benjamin Disraeli three
kinds of lies:"lies, damned lies and statistics". One person I spoke to at
the meeting told me that he was aware of one African country who simply made
up the statistics it submitted to the ITU.

* G8 DOT FORCE - BASKETS OF INITIATIVES TO COME

The Commonwealth Meeting was timed to take place just after the G8 Dot Force
Meeting also in Cape Town. A wide range of people I spoke to said that the
Dot Force has not yet come up with many compelling ideas. The draft report
to the meeting provides a remarkably clear analysis of the nature of the
problem. It only slightly slips away when the authors offer a
three-dimensional matrix of the issues, a device that may lead to an
"understanding divide". We should think in three dimensions but few of us
do. Should you change the world in this respect or change the matrix?

Although the Dot Force has yet to come to recommendations, we believe that
it will propose "baskets of initiatives" with broad generic subject headings
like human resources. The UK and Canadian private sector representatives put
proposals for a tax relief scheme to encourage venture capital investment
for those on the other side of the digital divide. The proposal is for tax
relief in the host country for investments of this kind in poorer countries.
Japan is talking of putting US$15 billion into Dot Force initiatives,
however its money is often "tied" to the supply of Japanese products.

At the Commonwealth meeting, Chair of the Commonwealth Group Andile Ngcaba
came up with an ingenious structural way of addressing the issue:"We can't
develop policies and regulations that are homogenous." So he proposed a
"t-rate" (rather like the e-rate for education). Where phone connection
levels are below 1-2% of the population, the phone company will offer
concessionary rates to telecentres and their equivalents.

* ALL ROADS LEAD BACK TO TELECENTRES

Wherever you start in the digital divide discussion, it's not long before
you find yourself back discussing telecentres or some version of this idea.
There were several excellent presentations on telecentres and their like,
particularly from South African organisations. According to Peter Benjamin
of the University of Witswatersrand Link Centre, there are 547 "community
ICT sites" throughout South Africa. In addition there are 2000 Vodacom
phoneshops and 2000 Schoolnet sites. The density of this provision makes
South Africa an interesting test-bed for the many different approaches to
tackling the digital divide.

At the heart of the discussion is the thorny problem of who pays: what's the
business model? Guy Giradet of the CTO summarised the advantages and
disadvantages of a range of commercial and subsidised approaches. So for
example Peru's commercial Cabinas Publicas have driven down access prices
from US$1.40 to US$0.70 and 33% of their users had incomes below the poverty
line. NGO telecentres reach poorer people more effectively but have to be
paid for. He made the point that ICT access is more than just telephones and
needs to include radio and multimedia PCs.

Outside of the meeting almost everyone I spoke to about telecentres in South
Africa - whether from the private sector or NGOs - was sceptical about how
well used they were. One example I was given was of a rural telecentre where
the telephone line was not working, it had only 4 PCs and the person running
it had not been trained. This not to condemn the idea but only to note that
the scale of skills required to make them effective may not always be in
place.

* ICT ACCESS IN SCHOOLS - A HARD NUT TO CRACK

Shafika Isaacs of Schoolnet presented a summary of its members' work across
the continent and the preliminary results of a recent evaluation study.
Overall Schoolnet has projects in 25 countries, a little over half of the
countries on the continent. To give some idea of the scale of the "catch-up"
needed in education, in South Africa (one of the continent's more advanced
countries in this respect) Schoolnet SA only has projects in 2000 out of the
country's 25,000 schools.

Although the evaluation study of nine schools found that it was "too early
to draw conclusions" it raised a series of issues that will need to be
addressed. It found that there were problems with providing sufficient
teacher training to make equipment effectively used and there were problems
with phone lines: in some instances, equipment was still in its boxes.

Except in Arab Africa, all school projects are "donor-dependent". This
dependency has the effect of disempowering the host countries.
Understandably, individuals and organisations take on a "donor dependent"
mentality. One African I spoke to summed this up rather well:"(This
governmernt department) applied to an international donor for 2 PCs. If its
ministers had had simply one less Mercedes Benz, they could have bought
10-20 PCs." At heart, unless African economies are generating more wealth,
this dependency will continue to exert a powerful effect on the mindset of
those involved in overcoming the digital divide. And by extension the
broader problems of their countries.

* SA DEFENCE DEAL DIVIDEND: ENTER ATELSAT

One of the bonuses of South Africa's recent, controversial defence deals has
been the setting up of Atelsat (Pty). Its Swedish Chair Ivan Ofverholm (ex
Saab) presented its plans to the meeting. He started his presentation by
demonstrating the latest generation of mobile phone. It clips behind the ear
and has a lightweight mouthpiece that extends in front of your mouth. It has
the effect of making you look like participant in an outer space drama like
Star Wars. When he bought it he raised this difficulty with the seller who
assured him that in a year everybody would be wearing and it would be
quickly accepted.

Atelsat is launching in 2003 and aims to manufacture satellites to provide
additional capacity on the continent. Not surprisingly its Chair is bullish
about the expansion of capacity in prospect over the next ten years. Atelsat
will will work with a local partner, Spatial Technologies (Gideon Njenje).
We await developments with interest.

* OVERHEARD: MARKET PRICING HITS CORRUPTION

Whilst waiting to pass through immigration at Cape Town airport, I overheard
a fascinating conversation. Two executives were discussing whether or not
bribes should be given to obtain business. One of them was complaining:"He
asked me for US$10,000 to give to a politician. It was stupid. He knew I
couldn't do that. I only make US$25 (per unit) on that product."

* QUOTE/UNQUOTE

"South Africa is both first world and third worlde...With 5 million cell
phones, people tell us we can be a laboratory for the rest of Africa. I'm
not sure I want to be a guinea pig!"

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USEFUL WEB SITES AND DISCUSSION LISTS
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* INTERNET COUP HELPS FIGHT DEFENCE CONTRACT CORRUPTION

The murky underside of South Africa's recent defence deals has been much in
evidence. Depending on what paper you read, Bheki Jacobs who has provided
much of the evidence surfacing is either a highly trained ANC inteligence
operative or an imposter. For an incisive look at who it claims paid what to
who go to the Noseweek site (http://www.noseweek.co.za). For more analysis
see http://www.pims.org.za/armsdeal.htm .

What South Africa really needs is a version of India's Tehelka. It got two
reporters to pose as arms dealers peddling "fourth generation thermal
hand-held cameras" on behalf of a British company. The cameras and the
company were a fantasy but that did not deter officers, defence ministry
officials and politicians from offering to smooth the way to a deal. The
Tehelka reporters caught several doing so on camera and several accepting
money to do so. The film captured was put up on its web site.
(source: UK's Economist)

* VISITING SOUTH AFRICA'S WILD COAST

For an alternative to the rather more sedate pleasures of South Africa's
Wine and Garden routes, it's worth considering a visit to the Wild Coast
between East London and Port Edward. Port St Johns has a fine oven-baked
pizza and pasta restaurant called Gekko Moon overlooking the beach and river
mouth. Accommodation is basic by comparison with elsewhere in South Africa.

For details see:
http://wildcoast.com and http://www.ruraltourism.org/portstjohns

Also one place offering accommodation:
Cremorne Estate: http://www.cremorne.co.za

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BACK NUMBERS: AFRICA'S INTERNET CONTENT PROVIDERS
____________________________________________________________________________

50. Africa Online vs M-Web - Continent-wide content providers slug it out
http://www.balancingact-africa.com/news/back/balancing-act50.html

39. Zimbabwe's MDC uses the web to fight the government
http://www.balancingact-africa.com/news/back/balancing-act39.html

37. Uganda's Life in Africa Foundation - Expanding the art of the
possible
http://www.balancingact-africa.com/news/back/balancing-act37.html

33. Africa's e-press for ICT professionals
http://www.balancingact-africa.com/news/back/balancing-act33.html

29. Kenya:Busting corruption using the internet
http://www.balancingact-africa.com/news/back/balancing-act29.html

19. WOZA: Building a content-rich site
http://www.balancingact-africa.com/news/back/balancing-act19.html

14. Speaking in Tongues? A Shona language web site
http://www.balancingact-africa.com/news/back/balancing-act14.html

8. The All-African portal - A new contender enters the field
http://www.balancingact-africa.com/news/back/balancing-act8.html

7. Sierre Leone's leading independent newspaper on the internet
http://www.balancingact-africa.com/news/back/balancing-act7.html

You can read and download these at http://www.balancingact-africa.com . If
you have difficulties accessing the web, mail us on
[email protected].

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SOUTH AFRICA'S TELECOM'S ENVIRONMENT

I have just attended the 3rd Annual Conference on VOIP - IP-PBX at the
Langham Hilton in London. I will be completing a paper and slideware
summarising the conference in the next few weeks. I will be visiting South
Africa at the end of March 2001 and would welcome any enquiries from people
wishing to attend a presentation workshop with particular emphasis on the
South African Telecom's environment.

Many thanks

ERICSSON ///
Seymour Howe
Relationship Manager
United Kingdom

Ericsson Enterprise Limited
Enterprise Networks
Telecommunications Centre
Ericsson Way, Burgess Hill
West Sussex
RH15 9UB
* Telephone: +44 (0)1444 23 4567
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* Mobile: +44 (0)7769 886311
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