Workers at the Xxotic Interior Solutions doing their work in a small business district in Orlando West Industrial Park in Soweto.
COMMENT
One of the greatest challenges of our time is how to produce new entrepreneurs to grow an economy that is clearly in trouble. Ironically, South Africa’s history is full of lessons.
After spending six weeks in 1970 conducting research locally, and having studied South Africa before, veteran American journalist Jim Hoagland wrote an instructive book, South Africa: Civilisations in Conflict.
Hoagland makes a penetrative observation about Afrikaans people after 1910: they “refused to be absorbed into English society and institutions. They … formed their economic and political institutions to advance Afrikaner interests.”
Still licking the wounds inflicted by the South African War, the Afrikaners knew that the English and Jewish people were a monopoly in mining, the mainstay of the economy at the time.
Escaping a poverty-stricken veld, hundreds of thousands of wretched Afrikaners poured into towns, searching for employment. This is the phenomenon historians call the “poor white problem”.
Fortunately for them, the 1910 political deal with Britain had placed Afrikaners in the driving seat of the state. Their leaders had the means to implement policies designed to dig the Afrikaner out of poverty.
They inaugurated a new phase of industrialisation, based mainly on three things: cheap electricity, cheap steel and cheap finance.
For cheap electricity, the Afrikaners created what was then known as Escom (1922); for cheap steel, they established Iscor (1928) and for cheap finance, they founded the Industrial Development Corporation (1940).
By the 1950s, poverty was almost a thing of the past among Afrikaners. By then they already ran their own successful companies – side by side with those of English and Jewish people.
It is true that political conditions have now changed, but the logic that enabled Afrikaners to turn their economic situation around can still be applied to end unemployment among black people today.
Black people must never be absorbed into the economic institutions of white capital. They should form and grow their own companies. This means that black people must identify existing gaps and new spaces to occupy in the economy.
The same idea sounded laughable before the Afrikaners embarked on their own economic empowerment project. In time, companies like Sanlam, Sasol and Rembrandt became formidable giants.
Since 1994, black people have complained that South Africa is an exporter of raw material and an importer of value-added products. Why have they not experimented with beneficiation?
It is true that the Afrikaners were assisted by the state to achieve success in the economy. Today, black people sit exactly were Afrikaners sat after 1910. They, too, run the state.
Grand thinking is necessary to identify big strategic goals and what needs to be done to get there. Were this to happen, black people would not only begin to play a more meaningful role in the economy, they would also create jobs for their unemployed brothers and sisters.
The economy will not grow for as long as black people continue to play the role history has assigned them: job seekers. A sizable component among black communities must become inventors if we are to experience meaningful growth.
The idea of black entrepreneurs establishing their own companies to create real value should not be misconstrued as a call for the demise of white-owned companies.
Black people will still need to do business with established white companies, but this would be different from the black economic empowerment model implemented thus far – in which a few blacks are co-opted into white-owned companies.
A black entrepreneur who has set up a factory that produces real commodities is more valuable than a black gentleman in a suit who hops from one white company to another to collect dividends.
The most meaningful economic change can come from a focus on developing small enterprises, especially by a segment of our population whose creative faculties have been throttled for aeons.
This strategic task is too valuable to be left to the state alone. The private sector should unlock both material and intellectual resources to contribute to this nationally important mission.
Intellectual resources would include expertise in business development as well as creativity in the use of supply chains as a way to incubate small enterprise.
The right time to experiment with new ideas is now, when the economy is in trouble. Such is the lesson of South Africa’s history.
It was at a time of seemingly insurmountable socioeconomic pressures that Afrikaners began to experiment with industrialisation.
The economic difficulties of our time present the kind of demanding conditions that call for boldness in experimentalist thought.
When the cynic says: “It cannot be done,” history retorts: “It has been done in South Africa before, and can be done again.”
Abel Dlamini is the executive chairperson at SekelaXabiso, an auditing and business advisory firm