I have reproduced this article by kind permission of Ed Bricknell.
It all started in Tunisia where the population, driven initially by the high unemployment rate and rising food prices, rose up in revolt against their government. In just a few months the flames of revolt have spread to 10 other Arab states.
South Africa, with the extended unemployment rate standing at 35.8% (17.5 million people), food prices set to escalate dramatically, and widespread dissatisfaction with the lack of service delivery by the government, is a prime candidate for similar occurrences. We simply can not afford the risk of this happening. Our already fragile economy would be decimated over night, threatening our way of life if not our very existence. Unless we, the business community of South Africa, step up to the plate, pool our resources and take meaningful action we will be adding fuel to the fire through non-action. The probability is extremely high that we will find ourselves in a position where we are simply unable to do business – we will become a second Zimbabwe!
We can take little solace from the fact that the government recognises the seriousness of the situation, as reflected by their latest initiative to create 5 million jobs, at a cost of roughly R6,000 per job, by 2020. Although the initiative is well intentioned, the likelihood of the campaign being successful is remote because it flies in the face of sound economic principles. Other countries in the past have faced similar crises and their governments were successful in not only creating jobs, but in simultaneously creating the right environment for business to prosper – I refer to America after the great depression and Germany after the Second World War. In both instances the focus was on state-sponsored infrastructure developments and improvements in public services.
In South Africa our infrastructure is deteriorating rapidly and public services are in disarray yet the government is attempting to incentivise the private sector to employ more people. Surely the first step is to create the right environment for businesses to actually take on more people, such as drastically amending the draconian labour laws which only serve the purpose of incentivising the business community to reduce the number of jobs they place on offer. The job of private enterprise is to make sustainable profits, not to create jobs!
Yes, we can criticise and complain until the cows come home in the belief that we are powerless to persuade the government to take appropriate and intelligent action, but all we are doing is fuelling the fires of inertia. What we, as the business community of South Africa, need to do is to get off our pity potties and do something about the situation, not continue each day acting as if there is no real threat to our existence in the false perception that it is not our problem – this is no time to be sticking our heads in the sand!
But what can and should be done!? There is in fact plenty we can do, but let’s first crystallise the realities with which we are faced …
The masses in our country are largely under-educated, politically charged, easily influenced, and emotionally driven. Add to this the fact that their expectations of a better life have been dashed and you end up with a powder keg, the fuse of which is burning.
The vast majority of our population, except for the few elite, have little to absolutely no understanding of business, economics, and how the world works. There are many reasons for this unfortunate state of affairs but these are of little consequence as only we, the business community of South Africa, can clean up the mess by rectifying this lack of appreciation and understanding.
In addressing these two realities we, as a business community, need to …
Do everything in our power to broaden the base of business ownership amongst the previously disadvantaged peoples of our country thereby creating a shared economy which advantages a broad spectrum of people.
Create the right environment for these newly formed businesses to flourish and in the process allow them to create the much needed jobs - a process which will improve the lives of all South Africans.
In the interests of protecting our future in South Africa our only hope is to make a unified, concerted, effort to seek out competent people from amongst the masses and transform them into competent businesspeople – create not jobs, but small, medium and micro business enterprises which will, in turn, create jobs. We all recognise that this is a viable solution but to date efforts have been fragmented and largely ineffectual. According to government’s own research, the majority of business owners in South Africa are black, but these businesses are overwhelmingly in the informal sector. As we know these are not businesses in the true sense of the word but subsistence trading.
To facilitate the establishment of thousands of sustainable businesses it is our responsibility to ensure that some critical issues are meaningfully addressed and rectified. Once more, we need to …
Advance the levels of business and economic understanding amongst the previously disadvantaged peoples of our country. This will not be achieved through classroom training however. It will be achieved only through assisting people to establish businesses and then mentor, coach and train them in how the business game is actually played – you can read a library of books on how to swim but until such time as you jump into the water at the deep end you will never actually learn how to swim!
The types of businesses I refer to are not just any business but those which will contribute to socioeconomic stability in our country - mere trinket manufacture does not satisfy this criteria. We must focus on the establishment of a multitude of small retail outlets which make available to the people essential products manufactured by a plethora of small manufacturing operations across the country. This was, after all, one of the key techniques employed by the Chinese when they first kick-started their economy.
There are many different techniques that can be employed to achieve the stated objective of creating these thousands of sustainable businesses but the task is enormous and has to be carefully orchestrated and coordinated. This is where we, at Ophir Enterprise Development, come into play. We have created a platform for companies throughout South Africa to become involved in enterprise development, scoring Enterprise Development points on their BBBEE scorecards, equal to between 15 and 25, in the process. Since we started operations in November 2010 we have created 27 individually owned businesses amongst the previously disadvantaged which we are in the process of nurturing into a state of sustainability. Up until now we have funded the establishment of these businesses out of own pockets and at an average cost of R20,000 per business this is not an insignificant sum. With each business destined to create at least 6 jobs, our cost per job created runs at R3,333 – almost half the government’s figure of R6,000 per job!
Investments placed with Ophir Enterprise Development are used to find and then develop entrepreneurs. I urge you to back our initiative, thereby also ensuring a healthy and safe business environment for yourself and your business.
There is a lot more I will be sharing with you in the coming months but in the interim please feel free to contact me at any time, by way of reply to this mail, to find out more about what we are doing and the approaches we deploy.
