World Entrepreneur’s Day – A spotlight on Business Turnaround and Recovery
August 22, 2020
OPENING REMARKS BY MTHUNZI MDWABA, CHAIRMAN OF PRODUCTIVITY SA @TZoro1 @ProductivitySA
The Honourable Deputy Minister of Employment and Labour, Honourable Boitumelo Moloi
Leadership of organised business and organised labour
All strategic partners who are present
My fellow Productivity SA Board members
The Executive Management and Productivity SA staff
Good Morning to all participants
Honourable Deputy Minister, ladies and gentlemen, please allow me to take this opportunity to thank you for honouring our invitation to be part of this webinar.
Today we celebrate World Entrepreneurs’ Day, a day dedicated to celebrating people who have started their own businesses. The whole objective of celebrating the day is the creation of awareness for entrepreneurship, innovation and leadership throughout the world. It is a day to celebrate the sometimes lonely but pioneering road by entrepreneurs.Today, we applaud their efforts in believing in their ideas and putting them into action, trusting that the conversion of a simple idea can become an enterprise and consequently yield sustainable businesses. It is trite that entrepreneurship akin to having an enterprising spirit leads to the creation of enterprises, which when nurtured by the creation of an enabling environment, leads to sustainable enterprises, which concomitantly leads to sustainable economies.
To quote Roy Ash, “An entrepreneur tends to bite off a little more than he can chew hoping he’ll quickly learn how to chew it.” As a serial entrepreneur, I can relate to this and in fact once had a friend and colleague tell me when my team and I had succeeded, that they watched with concern believing that we had bitten more than we could chew.
The theme of today’s event is “Sustainable SMMEs- the catalyst for innovation, full and productive employment and decent work for all”. The theme recognises the crucial role of sustainable enterprises as generators of full and productive employment and promoters of innovation and decent work, which reaffirms the ILO Centenary Declaration for the future of work (2019) and the Abidjan Declaration (2019).
I have made many speeches on the challenges presented by the Covid and the devastation we are dealing with economically because of pre-existing economic structural flaws and the interventions we require very urgently to build back better and have a better normal. I have also highlighted the role the Business Turnaround and Recovery Programme we have embarked upon with the awarding of R104 Million by the UIF at the instance of the Department of Employment and Labour in the last few weeks, stressing the role it will play in supporting companies facing economic distress with the objective of preserving over 9000 jobs and mitigating the retrenchment of workers. Additionally, this would address the improvement of competitiveness and sustainability of SMMEs experiencing operational challenges in line with our mandate.
For those who attended our IMD Global Competitiveness Index launch, you will also be aware that South Africa has performed abysmally moving from position 56 to 59 out of 63 measured economies, and having dropped gradually and consistently from position 44 about 10 years ago till now. All these speeches can be found on our Productivity SA website, the IOE(International Organisation of Employers) website and some on YouTube.
Today, my remarks will focus specifically on entrepreneurship and how as a country we fail our entrepreneurs and therefore inadvertently fail the embodiment of creativity as a body of ideas and innovation. This inherently means we fail the youth in a manner so colossal, we should all be put out to pasture and let other people come in to lead. This will also naturally take me to the continuous lamentation I have for our lack of leadership.
In 2008/9, speaking at an ANC requested meeting at the Convention Centre, when I was the President of an organisation called the CBBO(Confederation of Black Business Organisations), I asked the then President of our country, President Gedleyihlekisa Zuma and Paul Mashatile representing the Gauteng government I believe, why we were systematically eroding everything we had promised our people? Why we always expediently made promises to people during campaigning times for elections – we had imminent locals elections at the time.I asked why we were doing nothing to build an environment that could nurture entrepreneurship as the statistics at the time were showing that we had an annual, year on year erosion of entrepreneurship ability, capacity and support of same for the last 10 years. Sadly, the President, never understood this question and went on and on talking about BEE, the scorecard and enterprise development. The reason I mention this is because as an ANC member, raising this in an internal meeting of people who were meant to be constructive in building our country, I believed this to be the right platform given that not all of us can go to the NEC, I was instead accused of having publicly disrespected our President, and became persona non grata.
Fast forward to 2020, South Africa continues to be the one-eyed man amongst the blind in the Continent and still leads in entrepreneurship, albeit on a very, very low and mediocre basis. Never before, has there ever been a crying need for entrepreneurs who not only succeed, but who have the ability to positively impact and transform their communities.This cannot happen when entrepreneurs do not receive the support that will make this a reality.
When you listen to State of the Nation addresses, one has to search for the word “entrepreneurship”. Similarly, one has to search for the word “productivity”. The National Development Plan of our country has similar shortcomings. We have mentioned on numerous occasions that you cannot talk of a country embracing productivity when the NDP that seeks to direct us as a nation does not address it. Before you think that this is just a South African problem, let me quickly take you to the ILO, an organisation I am one of the political leaders for – until the Centenary Celebration of 2019 and the Declaration, there had been no official mention of productivity in an instrument of the ILO. As the Employers Group, we deliberately and consciously set ourselves the following objectives under my leadership:-
- Productivity would be central to the Declaration if we were to succeed with driving economies that will create employment and not just pay lip-service to ideological fetishes for the next 100 years of the ILO. The result was productivity being mentioned 11 times in the document.
- The recognition of the role of the private sector as a principal role player in the creation of employment was critical as mentioning the private sector was “taboo”. We succeeded in doing this.
- Skills were central in everything we do, in ensuring relevance of skills and marrying them with the reality of the economies, what they require to grow and be competitive. Skilling, re-skilling and up-skilling was also critical in the management of transitions for our people irrespective of whether this would be in the 4th, 5th, 6th or any other industrial revolution to ensure that work was always in touch and aligned with the future we wanted to build. We got this done!
- Full and productive employment creation leads to decent work not the other way round.
- Equal access to opportunities for all(those in rural villages, in informality, women, young people, physically challenged people, gay and lesbian people, all people-my addition) leads to impact and the realisation of social justice. We had this integrated into the Declaration.
South Africa is one of 187 Member States of the ILO who together with its social partners were there and agreed to this. More significantly, the current President of South Africa, the Honourable Cyril Ramaphosa co-chaired the Global Commission on the Future of Work that I was a Commissioner in as a member of the 28 collected and convened diverse global brains trust, the report of which served as one of the reference materials for the Centenary discussion on the FoW that led to the Declaration. This as an expert in the field and a world employer leader was the last time I met my President or any leader of business in the country even though I am a South African business representative who is highly sought after everywhere else in the world, at least 30 countries a year invite me to participate in their conversations. This is a discussion for a different day, but I hear it has something to do with me being eccentric. This being one of South Africa’s main sporting events – tackle the man or woman, never the ball and the truth.
The question we must ask then is why can we not just do right? Why can we not just lead? Why can we not just implement? At what point do we care about impact for our people instead of talk, talk and more talk, ego, ego and more ego? Leadership as I always say is absolutely critical as exposed by the pandemic more than any other time. Leadership must never be confused with a position of authority. Leadership is doing, and leaders invite people on a journey with them.
We get confused by mediocrity as I said earlier. When compared with other African countries(although we are being overtaken in many instances while going backwards), we are still envied, it appears as if our efforts and successes exceed that of our peers in entrepreneurship. To quote from an Allan Gray Orbis Foundation blog, “However – and this is the crux – our entrepreneurs seem doomed to fail. Yes, we record an impressive number of start-ups, but few of these translate into sustainable jobs. In fact, only 15% of our start-ups go the distance.” There are similar statistics throughout the Continent.
This translates into a very simple outcome. South African entrepreneurship is failing in one of the key areas where it is intended(and where it is solely needed) to have the most impact: job creation.
There are many reasons for this, but to mention just a few:-
- Attitudinal change and ideological fetish that leads to ideological entrapment.The denialism and defensive behaviour that accompanies this, has to change urgently.
- Lack of leadership and lack of political will. This has to change now.
- Lack of prioritisation of entrepreneurship as a national priority is glaring and when accompanied by the lack of national prioritisation for productivity, it results in what is referred to as a morass. Sadly, I don’t know if anyone appreciates the urgency and/or is paying attention and must change urgently. Our way of contributing to change has been a recommendation we made by way of a Cabinet Memo at the end of April for Productivity Month to be a government – wide recognised celebration, with the President leading the celebration, including the Productivity Awards, amongst others. 4 months later we are waiting for an acknowledgment and progress report.
- No alignment between ideas and skills. Our entrepreneurs have shown great ability and insights in identifying niches with potential to become lucrative businesses, but they don’t have the skills to take their businesses to the next level.”There are a lot of resources that have been established to provide support, but the ecosystem is so siloed and so fragmented, with lots of information and infrastructure …but nothing addresses the entire spectrum of entrepreneurial support from end to end.” – Allan Gray Orbis Foundation.
- No clear picture of knowledge and skills acquisition as they relate specifically to employment, and how these can best be harnessed to drive rapid innovation and optimise industrial growth. As a result, the majority of skills development initiatives in this country of ours are geared towards bolstering existing, established industries and trades. Nothing supports disruptors. We must urgently understand that the marriage of Artificial Intelligence(AI), indeed all technology with human capital development is the only way we can be able to create anything sustainable.
- Entities such as the PIC who have UIF funds that just sit there such as the PDP funds launched two years ago and operate worse than the banks in requiring collateral and bragging about how they take 6 – 12 months to process anything if one is lucky. The government requires to urgently become a funder of first resort so entrepreneurship and not red tape and corruption can thrive.
Empty rhetoric about decent work, about addressing issues of informality, addressing social protection for all, about rights, and repeatedly imposed rigid regulations devoid of any RIA(Regulatory Impact Assessments), the SDGs, namely SDG1 on ending poverty, SDG 2 on zero hunger and SDG 8 on economic activity and decent work will not take us to the promised land.
What I have outlined above is absolutely critical for our fortunes to change and cater inclusively for our people… and the understanding that without entrepreneurship, there is no enterprise, no enterprise means no SMMEs, no SMMEs means no sustainability and this in turn means, no work…it is sadly this reality that we face UNLESS we act bodly, differently, urgently and go big or face imminent disaster.
The alternative of course is that similarly to the likes of Clive Colder who started CCP records in which Rebecca Malope and Brenda Fassie among others came to be known and who left to be one of the wealthiest music executives in the world based in the UK and Elon Musk who is one of the wealthiest in the world going beyond building cars and now playing with Space technologies, based in the US, entrepreneurs must leave South Africa for their dreams to be realised as the world seems to embrace our entrepreneurs and leaders better than we do.