South African business ‘searching for a country’

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South Africa is a land filled with opportunity. Not only are we on the doorstep of the great African growth story, but we remain a country of entrepreneurs, innovators and undeveloped potential.

However, there is no doubt that we also have some serious problems that have a real impact on business.

Panelists at last week’s Economic Outlook conference in Stellenbosch hosted by the Gordon Institute for Business Science (GIBS) acknowledged the problems and interrogated what business should do in response. What is the role of business in a society that often comes across as hostile?

Senior Associate at the Institute for Security Studies, Judith February, said the situation demanded action because it could not be left to disintegrate further.

“What we’ve seen in South Africa lately is an erosion of trust between government, business, civil society and labour,” February said.

“Marikana was one of the most visible examples of that. The social contract is really fraying at the edges.”

She argued that the political transition that led to democracy in 1994 took leadership from all sectors of society, and that leadership was now missing.

“Business and the economy don’t grow if you have institutions headed by individuals who only want to please the ruling party,” she said.

“I think what we want to see is a commitment to the National Development Plan (NDP),” February said.

“This is supposed to be South Africa’s grand plan, yet we are floundering because the NDP provides a menu of choices and it requires leadership to drive those choices.”

Professor Nick Binedell, the Director of GIBS said a very real need existed to find common ground. “South African business, because it has been so dominated by very large firms, has developed in a very western model of capitalism,” Binedell said. “And within that model we have established and continue to establish remarkable companies.

“But on the other hand, we have an intensely political agenda which comes out of our political history, a history in socialism. In this environment, we have to recognise both. We have to have a form of political economy that overcomes the problems of poverty and unemployment.”

Vice-President of Business Leadership South Africa, Michael Spicer, suggested companies could and should be doing a lot more to publicise their commitment to South Africa, to see people as an asset, rather than “a cost to get rid of at the first sign of economic difficulty”.

He suggested that businesses could strengthen the country through developing their existing human resources.

“BEE should start with the workforce, and I think you can go even further,” Spicer said. “It’s time to talk about co-determination and creating place for workers on the main board or at least on supervisory boards.”

While Spicer argued there’s no need to resuscitate the National Economic and Development Council (Nedlac), he did call for more robust engagement between business and its stakeholders.

Binedell emphasised that there was little room for business to miscalculate the importance of its role in society. “It’s no good having a business if you don’t have a country. So I would argue that we need to rethink the nature of risk at a business level and as citizens.”

For February, leadership remained key to overcoming “a dialogue of the deaf”: “Business doesn’t want to leave anything at the door, the ANC doesn’t want to leave any of its ideologies, and labour doesn’t want to budge.

“We have certain key choices to make and if we don’t get it right we are going to find ourselves in trouble. It takes a level of pragmatism to see that not everyone is going to win everything, so we have to act in the greater national interest.”

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