Jul 24

Achieving Economic Growth In South Africa

An article by Ian Kilbride.

As an Honorary Professor at Stellenbosch Business School, I encounter some of the brightest and best young minds in South Africa. The students are an inspiration and provide tangible reasons to be confident about the future of local business. Just like the business school itself, the students understand that their future careers are intrinsically linked to the broader society in which they operate. With this recognition, it follows that as a business elite, the students also understand that they carry a particular responsibility not only to build businesses, but to do so in a way that contributes meaningfully to the development of South Africa.

But I am equally aware that some of the most talented young businesspeople I encounter are keeping their future options open and are considering building a career overseas with their families. As a country, we simply cannot afford to be educating home-grown world-class business leaders only to see them transferring their intellectual skills, business acumen and wealth to other countries. Equally, however, I have yet to encounter a single student of business who would not prefer to remain and flourish in a successful South Africa.

To be sure, some, in fact many business students I meet and teach are looking for international experience, to benefit from best practice, to develop a more cosmopolitan outlook and to gain a competitive advantage, but to do this in order to become better South African businesspeople, not emigrants. So, what’s the problem? Well, simply put, the problem is uncertainty about South Africa’s future. This is the common theme that we must address through deeds not platitudes. The list of concerns is well-known, but worth spelling out clearly: economic decline, breakdown of the rule of law, violent crime, corruption, failing infrastructure and an unaccountable and unresponsive government. But probe a little more deeply and the thoughtful business students express more structural concerns regarding poverty, inequality and unemployment. My stock response to these concerns is to challenge students as to what they themselves intend doing about tackling these issues.

It’s at this point that the conceptual chasm opens, as with some justification, business students often point to government’s failure to develop and deliver policies that address fundamental social economic and developmental challenges that are, in fact, the core mandate of the democratically elected government. They also feel that their voice is not being heard and that their concerns are not taken seriously. These young businesspeople are key to our future and will be running some of the most important businesses and institutions in years to come, so they should be heard and their concerns recognised. Indeed, we are urgently in need of a dialogue between our young business talent and our country’s political leadership.

As a first step, we need to agree on a national agenda. If we can acknowledge jointly that poverty, unemployment and inequality are the key challenges confronting our country and that neither government or business alone can tackle these pathologies and that the only prospect for success lies in far closer co-operation between government and business, we have the basis for a mutually re-enforcing and beneficial dialogue towards a healthy social compact.

But while acknowledging government’s democratic legitimacy and the monumental challenges confronting it, government in turn has to acknowledge the absolute need for our country to achieve sustainable growth and the centrality of business to its achievement. In simple terms, governments don’t create wealth and businesses don’t make policy, but for national success, both require far greater understanding and mutual recognition.

If we can get over ourselves and accept the importance of closer co-operation between government and business and that economic growth is anchored as the core of our national agenda, then we have the basis for success. This will allow business to bring to the table the capital, skills and resources that are presently being held in reserve in the current environment of distrust and uncertainty.  Then the hard work can begin.

My SBS business students are more than capable of conceptualising, developing and delivering their own agenda with government for a successful South Africa, if provided with the opportunity, but a number of policy areas are incontrovertible. Six are fundamental: the sanctity of the constitutional state irrespective of the composition of government of the day; the protection of property rights; an effective anti-corruption and national prosecuting authority; labour law reform to allow greater flexibility of employment; the outlawing of cadre deployment; and the pragmatic revision of BBBEE policies with the objective of achieving and sustaining economic growth.

South Africa is facing enormous challenges (some of which are self-inflicted) and these are likely to intensify over the short-term, but my SBS students remind me that we are a country of enormous talent and resourcefulness and that given the opportunity, we can work together with government to really create a better life for all.