Protocol,
We are indeed honoured to join the Black Balance Projects family as it celebrates the coming to the end of what has, no doubt, been a very fruitful and eventful year. Year-end functions are normally private functions that are not open to outsiders because they provide time for all staff members, from executives to clerks, to let their hair down and enjoy a good time and reflect on a year that was.
It is because of the suspension of normal company protocol that outsiders are not normally allowed into such functions lest they leave such functions with a wrong impression of the organisation's integrity. That is why there is an adage which says: "What happens at year-end functions does not get carried into the new year."
We are, therefore, humbled that you felt you trusted us enough to invite us to this function. This indeed means that you see our government as part of the same family, a family of South Africans engaged in the task of furthering the aims of our reconstruction and development programme.
Year-end functions, as we have said, provide an opportunity for members of an organisation to break bread together and rejoice on the successes notched during the year. Critically, they provide a platform for report back, in particular from management, on how that particular organisation has fared during the year.
The year 2009 will be remembered as one of the most difficult years in the history of the world economy because, during this year, the world witnessed the most devastating economic downturn since the Great Depression of 1929. Triggered by reckless lending practices in the world, the economic crisis spread like a wildfire devouring all that stood in its way. Long-established companies became casualties, companies folded and ultimately the ordinary citizen bore the brunt of a crisis that had not been of his own making.
South Africa was also not spared the hardships that came in the wake of this tragedy. Half-a-million jobs were lost in the first quarter of this year with our province losing, 117 000 jobs. While we have recorded some form of recovery in the third quarter with about a thousand jobs created, we understand that the level of the devastation will take years to undo and to regain lost ground.
Government also felt the pinch and, in leading by example, adopted stringent measures to thwart unnecessary expenditure in its day-to-day processes. Belt-tightening became the catchword in our society. Now, we understand that entrepreneurs do not necessarily warm up to the notion of belt-tightening because it means the clients are tight-fisted and want to squeeze the last ounce of value from each and every rand invested. This translates to profit margins of companies shrinking dramatically because it suddenly becomes a buyers' market. It is within this context that our government had to continue to push the agenda of Broad-Based Black Economic Empowerment (B-BBEE) in an effort to transform the economic frontier of our society. Despite the challenges that exist, our government remains committed to the objectives of meaningful economic transformation and indeed we are pleased to break bread with a black company that is doing really well in a highly competitive environment.
However, the fact remains that our economic transformation agenda is still faced with a number of challenges. These challenges are both in terms of approach and implementation. As our colleagues have said elsewhere in the country, over the past few years we have observed the emergence of so-called tendepreneurs instead of entrepreneurs. This is a phenomenon, which we feel, is an unintended consequence of a drive to split the cake equally among all interested role-players. In our context, it seems the preoccupation has been more about getting a slice of the cake, as opposed to growing the cake so that we can enjoy it for a long time but also that more and more people can join us on the table and have a slice.
In his seminal work, The Wretched of the Earth, foremost African intellectual, Frantz Fanon shares this perspective on the realities of a transition from a colonial economy to an economy of a liberated people:
"The university and merchant classes which make up the most enlightened section of the new state are in fact characterised by the smallness of their number and their being concentrated in the capital, and the type of activities in which they are engaged: business, agriculture and the liberal professions. Neither financiers nor industrial magnates are to be found within this national middle class. The national bourgeoisie of under-developed countries is not engaged in production, nor in invention, nor building, nor labour; it is completely canalised into activities of the intermediary type. Its innermost vocation seems to be to keep in the running and to be part of the racket. The psychology of the national bourgeoisie is that of the businessman, not that of a captain of industry; and it is only too true that the greed of the settlers and the system of embargoes set up by colonialism has hardly left them any other choice."
Fanon raises an important question which haunts our emerging entrepreneurs today, their failure to innovate and be creative but rather consigning themselves to the role of intermediaries. Indeed, deal-making is a lucrative business and this is where intermediaries thrive. However, not all of us can be dealmakers. And indeed our economy cannot thrive where no one innovates and creates. Successful economies are economies that innovate and create. It is because of this reason that our government came up with the policy of B-BBEE to change the structural makeup of our economy and to ensure that our people are given a chance to play a meaningful role in the economy of this country.
However, for B-BBEE to be effective we should not be content with getting just a slice of the pie in a company while the status quo, the pillars on which the company is founded, remains the same. In order to stem the tide of the practice of tenderpreneurship which undermines our efforts to transform our economy, we need to urgently inculcate a spirit of entrepreneurship. We need entrepreneurs as opposed to tenderpreneurs.
Entrepreneurship is defined as: the act of being an entrepreneur, which is a French word meaning "one who undertakes an endeavour". Entrepreneurs assemble resources including innovations, finance and business acumen in an effort to transform innovations into economic goods. This may result in new organisations or may be part of revitalising mature organisations in response to a perceived opportunity.
Clearly, entrepreneurship assumes innovation. In the absence of innovation we cannot talk of entrepreneurship and cannot talk of sustainable economic development. Without sustainable economic development, our dream of a South Africa characterised by peace, equality and prosperity will remain elusive. It is for this reason that our department will urgently get in touch with the South African Institute for Entrepreneurship to try and arrest this situation.
However, it is in the interests of companies or organisations themselves to re-visit and re-evaluate their modus operandi when it comes to business for their own long-term survival. Chasing after tenders, be they from government or the private sector, does not, in the long run, pay if that particular company does not have an innovative product that it sells.
One of the unfortunate consequences of the tender-chasing approach to business is that, at times, it lends itself to corruption and fraud. Because one has no innovation to sell that which gives him or her competitive advantage over one’s competitors, the temptation is too high to win tenders by bribing people. This, on the part of service providers or companies, can be stopped if companies compete based on what they offer. From the side of clients, government included, we must also strengthen measures to minimise situations where people are tempted to engage in corrupt practices. Obviously this includes unleashing the full might of the law on those involved in corrupt activities.
As we said earlier, government remains committed to empowering black and emerging entrepreneurs to play a central role in the growth of our economy. The proviso, on the side of emerging and formerly-marginalised entrepreneurs, is that they must adhere to the highest standards of integrity, delivery and good governance. Government will not hesitate in taking legal action against companies who render shaddy services, engage in corrupt activities and fail to meet their deadlines. Our economy must compete with other emerging economies.
As such, it must be populated by competitive and upstanding women and men. We commend Black Balance Projects and other emerging companies for the exemplary manner in which they have conducted their businesses. We believe that this is borne of the understanding that economic development is a critical pillar of our country's social transformation project. Any business that fails or is conducted in a shady manner undermines the objective of our government and the people of South Africa to attain economic freedom. We must all understand that each and every one of us has an individual responsibility to contribute to our country’s growth and development.
In conclusion, we congratulate Black Balance Projects on the work well done during a very difficult year. May 2010 be free of hassles and tribulations. May you gain strength to do even better next year. The struggle to transform our society in general and our economy in particular continues. Let us all play our role.
I thank you.
Issued by: Department of Economic Development and Tourism, KwaZulu-Natal Provincial Government
10 December 2009
Source: Department of Economic Development and Tourism, KwaZulu-Natal Provincial Government (http://www.kznded.gov.za)
