Tag Archives: SMEs

How to fix SA – do things differently

Amidst the sad and ugly reality of unacceptable levels of unemployment, fraud at all levels, poor service delivery and unprecedented skills, education and leadership shortages, all citizens are engaged in the ‘how to fix South Africa’ discourse. The media and analysts offer facts and figures that incite fear and fury, such as, “social spending (in grants, free services etc.) amounts to 58% of government expenditure. 72% of our unemployed are below the age of 34. We have more South Africans receiving money from welfare than are in employment”. Clearly something is broken and we have to try and fix it.

For his book, “How to fix South Africa – the country’s leading thinkers on what must be done to create jobs”, Ray Hartley chose to get ideas from those at the top. And although the ideas may be good and rationally constructed, I would suggest we now get working from the bottom up, with the doers, not the debaters and thinkers who have been at it for years and yet nothing has actually changed. We all know the problems and their causes, and many interventions, plans and programmes have been proposed by government and business to achieve the goals of five million jobs and 100% functionally literate and numerate workforce by 2030. These have not got off the ground due, mainly, to bureaucratic red tape and regulations, or a sense of powerlessness to tackle the humungous task. There’s too much talk and not enough action. So what we now need is action.

But firstly, let me give you the gist of the ideas which now need to be put into action by all citizens:

Adrian Gore talks about two approaches to job creation: “the populist, immediate and interventionist, urging the hiring of workers at any cost…it is financially unsustainable”,  and “the classical economist’s view – long term and structural, government is required to provide the conditions to make hiring attractive to business. Fundamentals such as education, healthcare, labour flexibility and barriers to entry must be addressed.” Clearly, if the present ‘interventionist’ approach of the government is not working, then surely this bottom-up approach needs to be explored more to make South Africa’s economy and society work better?

”Action is critical”, says Cyril Ramaphosa. “Our resolve to create jobs should be executed with a determination and speed akin to that of how one would save another person from a burning building”. “We need to make our economy more competitive. The cost of labour needs to be confronted……[but] we don’t have the time. We need to act now….. As a society we need to reconsider the role and place of SMEs and develop and raise entrepreneurial activity”. We can’t solely rely on government and big business to create new jobs.

Bobby Godsell says, “What our society needs is gainful employment, that economic activity where real value is created or, where the value created by employment exceeds its cost. No other formula can sustain economic activity”.

To enjoy future growth, wealth and social stability, we “need to make sacrifices today,” according to Pravin Gordhan. He believes “we need to work together and create synergies to make a contribution to a better South Africa. Corporate learnership programmes endorse Lincoln Mali’s idea that to solve this social problem “the whole village must mobilise and get involved.”

Ann Bernstein suggests that following the “Asia success story” would take workers out of poverty. Compared to the dismal future awaiting the presently unemployed, accepting low paying jobs could at least give them a foot in the economic door and could lead to “training, discipline, skills and opportunities that flow from that”.  The demand for higher wages does not make South Africa competitive, and that is the aim if we want to grow our wealth.

According to Helen Zille, “the biggest obstacle to doing business in South Africa is an inefficient government bureaucracy”.  Therefore it is up to entrepreneurs to create jobs and wealth. Zille quotes the statistics showing, “68% of private sector employment and 50% of our GDP are contributed by businesses employing fewer than 50 people”. These businesses should receive tax benefits and be rewarded for skilling their workers. The youth wage subsidy programme tries to encourage businesses to employ workers and initiate skills development in the workplace, reducing government bureaucracy.

“Obstacles to employment must be removed, fast!” says Herman Mashaba, “something [a low paying job] is better than nothing, being active is better than being idle and you do not learn skills by sitting at home…..there is no justification for interfering with the wishes of the workers who would rather have a poorly paid job than no job.” He acknowledges the potential of SMEs to reduce unemployment, for it is in the small firms that many receive training that allows them to access jobs in larger firms.

Michael Spicer, “The failure of policy and governance…and the self-defeating consequences of the wage and strike strategy of the union……the ignoring of issues of productivity, competitiveness and generation of wealth does not contribute to rational debate….. Government, business and labour must break with the past and do things differently, where the state enables business to create wealth and employment.”  He asks: “Why so little productivity bargaining”? Why not more bonus schemes linked to productivity? Then there is the issue of welcoming “skilled immigrants.” According to Jardine, SA skills are benefitting other markets so we end up having to import specialist skills.

Moeletsi Mbeki writes: “For SA to create jobs we need to provide incentives to private sector…. to invest in new enterprises, to expand existing companies and to develop new products and processes. The labour force needs to be motivated to embrace productivity growth and a strong work ethic. Protected employment….producing shoddy goods and poor services, are always on a road to nowhere.”

Godsell explains that entrepreneurship creates value through combining resources in new ways. People can solve problems and build relationships that create value, machines cannot.  Each worker needs to be “both problem-solver and relationship-builder” and be an active citizen in economic growth activity.

“The future is not in BEE but in SEE – self-economic empowerment,” says Muzi Kuzwayo. “There must be something fundamentally wrong with people who are fighting for economic freedom yet despise selling tomatoes and fatcakes on the street.” According to Brett Dawson, “employment means much more than earning an income: it promotes self-worth, independence and innovation.” He also maintains that “by investing in the sustainable development of SMEs, you can make invaluable inroads into boosting skills and creating employment.”

Locally, constructive and concrete suggestions emerged at a meeting at the Pietermaritzburg Chamber of Business where the CEO, Melanie Veness, identified the small to medium enterprise (SME) sector, as the locus for skills development of the youth, as an excellent starting point. Local businesses could start by employing young enthusiastic job-seekers and graduates, skill them to perform well in a business environment, encourage them to have the confidence to be more entrepreneurial and to start businesses of their own – that will grow the economy and create jobs. “Soft skills” training is vital in helping people to thrive in the working world. What makes one worker a better bet than another? What adds value to a person’s performance in the workplace is the ability to  communication better, write better, understand what’s expected of you, ask questions, think critically, a balance of respect, assertiveness, patience, empathy, confidence, attitude – these “fuel entrepreneurship”.

“Roll up our sleeves to halve the unemployment problem in under 10 years” says Zille, and according to Bierbaum, “Every individual needs to see their own power in creating a solution.” With no more excuses and one vision.