UNEMPLOYMENT AND THE BASIC GLOBAL WAGE

By Dr. Ivor Blumenthal

Is South Africa headed down a road of jobless growth where a capital-intensive economy is incompatible with a labor-intensive need?

According to an International Labour Organisation (ILO) report reviewed in Forbes Magazine, 11 August 2017, there are about 71 million unemployed 15 to 24-year-olds around the globe, many of them facing long-term unemployment. This is close to a historic peak of 13%.

It is a problem which primarily hits low-income countries especially hard. Even where there is work, much of it is low-paying. The ILO estimates that about 156 million (or 38%) employed youth in emerging and developing countries were living in extreme or moderate poverty in 2016 – equivalent to less than $3.10 per day.

Coupled with that, is what I can only describe as a self-serving and the cynical call, by those who have deployed technology to their own benefit, the Jeff Bezos, Mark Zuckerberg and Elon Musk’s of this world, who are calling for a ‘Global Wage’ which should be paid by Governments to their unemployed but employable citizenry, to stay at home as compensation for losing their jobs due to technology.

This, in the face of an ever-increasing problem, where internet-based technology is used as labour replacement by faceless, companies intent on skirting and avoiding residency in tax-paying countries.

So the questions which are begging for these Techno-Emperors to answer, are:
Who will fund these global wages you so eagerly call for?
Where will Governments find the money necessary to support the unemployed when you so obviously don’t intend on being the source of those benefits or paying your taxes compliantly?
Are you not the ones causing the problems but failing to compensate for the damage and havoc you wreak – the unemployment crises you create?

Capital vs. Labour Incompatibilities of the Fourth Industrial Revolution

“Today, a fourth industrial revolution is transforming economies, jobs, and even society itself.

Under the broad title Industry 4.0, many physical and digital technologies are combining through analytics, artificial intelligence, cognitive technologies, and the Internet of Things (IoT) to create digital enterprises that are both interconnected and capable of more informed decision-making.

Digital enterprises can communicate, analyse, and use data to drive intelligent action in the physical world.

In short, this revolution is embedding smart, connected technology not only within organizations, but also our daily lives.”
Punit Renjen, Deloitte

It could be argued that ever since the second Industrial Revolution, owners of Industry have been implementing capital-intensive processes working to replace what is basically an inefficient non-productive, costly and troublesome system founded on human labour, with that of an automated, continuous, self-reliant and importantly self-iterating and improving system, based on capital investment and a focused strategy of labour replacement.

Truth-be-told, a world based on technology and efficiencies is highly incompatible with one based on labour-intensive inefficiencies. These are the lessons learned in Europe, the USA and Asia, and China of recent times.

Mistruths

The doyens of technology will blithely throw ideas such as ‘re-training’ into their justification as if that is the panacea that will result in a job-for-job replacement strategy. However, experience around the globe tells a different story. It talks about a marginal capacity for industries to absorb irrelevant dead-weight, where only a fraction of those laid-off are ever able to be re-absorbed as a result of having been re-trained and capacitated.

Ground Zero – where Civil War is spawned

Job creation from technology deployment in capital-intensive economies is perhaps one of the greatest lies ever told, and willingly bought into by Governments. There is little compatibility between a capital-intensive economy and a labour-intensive necessity.

There is no middle ground or meeting point. It is obviously one or the other.

This is where WAR is inevitable.

Where will the final battle take place? That frontier that defines mankind and survival?

If the choice is for a capital-intensive where a technologically-based economy persists, where the wealth and income is concentrated in the hands of those few, who own the intellectual property (IP) then everyone else, will be slaves to the IP owners. The moderating solution is somehow a liberalisation and nationalisation of that Intellectual Property in the public interest. Out of the hands of the originators and into the hands of the citizenry. A “Nationalisation” of Technology for the common good. The ability to democratise ownership of the ‘Internet of Things’, to the extent that ALL citizens benefit.

Capital versus labour in South Africa.

This will truly become the definitive challenge in South Africa.

We live in a country, where currently of our 56 million citizens, less than 5 million are gainfully employed and by definition where for every employed person there are up to 10 dependants.

Ours is already a capital-intensive economy. One where the machine, IP and technology are more pervasive than labour intensive mines or farms or manufacturing plants. How much more capitalisation can our economy endure? That has to be the question which drives national policy and supply-side incentive programming. Surely?

We hear talk of the Black Industrialists Programme (BIP). Our President has identified the mining industry for significant investment and sectoral growth. Can we honestly believe that when our President singles out mining as a growth prospect, he is at the same time considering mining to be a labour-growth sector? Does it truly have the ability to absorb more labour than is currently employed in Mining? How can this be true when every other country which mines have re-designed their policy framework for a capital-intensive drive?

They use machines to mine in Russia, in Asia, in Australia. Why would we continue to use the most unproductive and costly solution to mine in South Africa? The same goes for farming and virtually every other labour-intensive sector identifiable.

In this day and age of machines and technology, it is simply not a safe or economical bet to invest in people as your pivotal resource when people come with flaws, with trade unions, with sickness, incapacity, and with unimaginable social baggage.

Our bumbling ill-informed Policy Framework

It has to be asked. In the light of this inevitable trend, why is South Africa intent on driving the business towards a YES (Youth Employment Service) economy?

How is Government going to be able to convince companies to employ young unskilled and unemployed people beyond the incentivised 12 months, contained in the latest amendments to the Broad-Based Black Economic Empowerment Codes (BBBEE)?

The argument is that with one year of experience, those exiting the YES phase will stand a far better chance of finding employment.

Ours is an economy speedily chasing down the highway of capital intensity. Because of that our companies simply become disinterested in creating long-term employment prospects for the young, inexperienced and unemployed. Ours is an economy characterised by stronger trade unions than ever before, a minimum wage threshold and a CCMA and Labour Court making the prospect of becoming a labour-intensive employer, unpalatable.

The global experience as far as Graduate Employment is concerned has, for the most part, resulted in graduate unemployment. Italy is perhaps being the greatest indicator of such a failed policy framework, driving school leavers to university and eventual perpetual unemployment.

Why in the latest BBBEE Amendments is the South African Government intent on re-engineering skills development spend to force companies to have to spend 2.5% of payroll on higher education and training qualifications when there is no evidence that the qualifications offered, primarily by Public Universities in South Africa make no contribution whatsoever to efficiencies or productivity in the workplace?

We now know that a university education is no guarantee of employment. That employers choose to be closer to the teaching, training and mentoring, to the coaching and development of new entrants into the workplace than universities and the DHET (Department of Higher Education and Training) will allow.

So why be so counter-intuitive? It takes us back to the days of Mbeki and beetroot for HIV/AIDS. It simply doesn’t make sense?

Perhaps the Global Wage is not such a bad thing after all?

Elon Musk believes artificial intelligence that is much smarter than the smartest human on Earth could result in dangerous situations. Musk argues that the government must introduce a universal basic income program in order to compensate for automation.

Truth-be-told there really seems to be no alternative but to pay people, to stay at home, remain unemployed, and enjoy their leisure-time by receiving a state pension forever and ever and ever. Funded by a tax base receiving income from technology owners with a social conscience making their money from internet trading, internet retail and from the provision of internet-based services.

Or, is there an alternative?

BBBEE employees are not entitled. Often they are just COMPROMISED.

By Dr. Ivor Blumenthal
CEO: ArkKonsult

A major problem is developing in companies which have embraced BBBEE, where Employee Ownership or Beneficiary Trusts have been created. Employee’s who happen to also be BBBEE Beneficiaries, sometimes misunderstand that they are ordinary employee’s & do not have a favoured, preferred or somehow entitled status, in comparison with other employees in the company.

There are two target groups which are partly responsible for the mess which is being created in companies where this problem is getting out-of-hand.

The first are Team-leaders, Supervisors & First Line Managers who simply are out of their depth, in managing a workforce where labels have now become attached to Black Employee’s who are listed as Beneficiaries in-terms of BBBEE Deals.

Far from the Black Beneficiary Employee’s (BBE’s) asserting their status as somehow favoured, it is the unprepared echelons of managers who have no idea how to performance manage these members of their teams. It is the Management Team who somehow are attributing this status to these employees. Then an inevitable and dangerous self-fulfilling process takes hold, in the minds and behaviour of the target employee’s.

Yes, the sense of entitlement and “specialness” of their positions expressed by Black beneficiary Employee’s is not of their making, but of how their Managers attribute this status to them.

The second group responsible for these problems arising are the balance of the employee’s in these companies who again are ill-prepared to understand the workings of BBBEE & the benefits as well as limitations on those benefits, which apply in the employment context.

From the rumblings of Shop Stewards to the misinterpretation of peers in an unprepared workplace, the BBE’s quickly become distasteful pariahs. This is not through any fault of their own, or of their making, but because those around them are ill-informed, miscommunicated with or simply not sophisticated enough to understand the nuances involved in attributing such status.

In-reality a BBE is in no way any different to an Employee who is White or a Black Employee who, for whatever reason, is not regarded as a Black Beneficiary at the same time. There is no difference in how they are recruited, selected or contracted with. They do not receive a preferential contract of employment, an enhanced Job Description or any kind of protected status. Indeed their status as a Beneficiary is solely protected while they remain employed. The moment they are fired, or resign, they lose their benefits and are no longer classified as a Beneficiary. An Employee Ownership Trust where it is created will NEVER transfer Shares to a Beneficiary. That Beneficiary will only ever benefit from the Economic Dividend declared in the company, while employed.

The identical Performance Management System, distinguishing between Performance and Behaviour, prescribing Management, Counselling and Discipline phases will apply to BBE’s in precisely the same way that these policies apply to all other Employee’s.

Indeed, a BBE will inevitably find him or herself subjected to a Behavioural Focus during Appraisals at an increased rate compared to other Employee’s where they display a disproportionate sense of entitlement or haughtiness and certainly where they become insubordinate in the process.

This is the way it must be.

As far as Managerial Responsibility is concerned, in dealing with these problems, Senior Management set the culture in a company and hence are the first line of responsibility, when it comes to where proper and effective communications needs to arise from.
If there is insufficient content-rich communication about what is being introduced, about why a Black Employee Ownership Trust or a Black Beneficiary Trust has been strategically decided upon and why it is necessary, about what it means for the normal employee responsibilities of those deemed Beneficiaries and about the normalcy and regularity of what is required from those Beneficiary employees’s in the normal course of production at the company, then it will be Senior Management at whom the finger is pointed when things go wrong.

A Manager is deemed responsible for the Management of ALL Resources under his/her control and that includes the Beneficiary Employee as a new Resource who recently has now been introduced into the workplace. Managers have to devise ways and means of managing this new Resource and especially manage their integration into the work team.

Our Labour Courts will only accept, that where Management has discharged its onus and responsibility in preparing the workplace for the introduction of this new resource, in coaching and facilitating the introduction of this resource into the workplace and in managing peer-to-peer relationships and problems that arise because of the introduction of the Black Beneficiary Employee into the workplace, only where that onus has been discharged will Management be entitled to then focus on the culpability of the BBE him/herself where problems arise. The message to management is clear. Discharge your onus and then you are free to manage for consequences of entitlement and insubordination and everything else that can potentially go wrong.

As for Peers of the Black Beneficiary Employee, they similarly have an onus to discharge. Be receptive to engagement and communication from management on the reasons for pursuing the Beneficiary strategy. Show a clear understanding of the “why” and the positive impact which it will have on the ultimate survival and both Turnover and Profitability in the company and then and only then should problems arise, Peers will be able to reflect on the poor behaviour, attitude and even the adverse performance of their Black Beneficiary Employee brethren. Only then would they be able to successfully pass the batten of responsibility to this new Resource introduced into the workplace.

Naturally, though, it is easiest to talk about the New Employee when one thinks about a Black Beneficiary. However, the majority of Black Beneficiaries are not new Employees but pre-existing Employee’s. This is when it becomes complicated. Otherwise, very normal Peer-to-Peer relationships and Management-Subordinate relationships of the past are significantly compromised and hampered when that pre-existing cohort of Employees are suddenly elevated to the status of “Beneficiary”.

Both that Employee and his/her peers will need a significant amount of Counselling and especially Relationship Coaching to overcome, especially at the beginning, the mass of complications which arise both in the minds of the Beneficiary themselves, as well as in their relationships with their co-workers and their Managers.

It is ultimately an Art and not a Science at this very early stage. There are no Norms and Standards dealing with these challenges. It is for the actual Actors on the Stage of the Workplace to sort these issues out for themselves and for those coming up the ranks to learn from those solutions and experiences.

Have would-be BBBEE Consultants been taking unsuspecting employees to the CLEANERS since the inception of BBBEE- The crime of BBBEE-Capture in the South African workplace by the BBBEE Consultant.

By: Dr. Ivor Blumenthal

A Climate of Negativity consciously promoted.

Criticism of Broad-Based, Black Economic Empowerment abounds amongst Employers. People who own their companies and are terrified that BBBEE means losing control of their most prized asset. The business built over decades through hard work and sacrifice. These scared and witless business owners perpetuate the myth that BBBEE is bad. They spread it around so that they are able to share their misery with other unsuspecting ill-informed and dangerously wrong counterparts.

The problem is that Consultants do nothing to discourage these myths. They want their clients to believe that unless they resist BBBEE and do everything they can do avoid implementing an acceptable and honorable BBBEE strategy in their workplace, they will lose this game. They create schemes designed to make them, the Consultants wealthy but do nothing to stabilize the workplace because after all, it is not their business. They do not work in those workplaces and importantly every problem which results requires more and more of their intervention and consulting time.

Strategic Corruption

BBBEE has been captured. It has become the victim of endless and meaningless schemes designed to defraud employee’s out of their entitlement, funded by the employers.

Take for example, the two Procurement-related elements of New Enterprise Development and Supplier Development.

New Enterprise Development

The principle of including these two sub-targets, within the fourth BBBEE Element of Procurement is obvious. It is about the company investing 1% of Net Profit in encouraging previously dispossessed Black people, to come into its Value Chain under the label of “New Enterprise Development”. Into the Supply Chain of the business making the 1% investment.

To encourage people who may not have any access to capital to build a business, but what they do possess is the insight, network and knowledge to add value by supplying necessary goods or services to the company. What New Enterprise Investment does is place them in a position to be able to start operating. To learn how to operate a business and to register that business in-readiness to supply the customer making the investment.

This sub-target pre-supposes that the company has identified the opportunity to diversify, who it is procuring from, and importantly to favor Black suppliers and particularly Black Female Suppliers in that Supply Chain. Not exclusively, but at least partially. There is nothing written or implied that directs a company to ONLY buy from Black Suppliers. But at least to provide opportunities to previously excluded Black entrants, to enter the supply chain and to be able to compete.

The current BBBEE Generic Scorecard requires that a company spends 22% of its procurement spend with Black Suppliers and of that only 12% are required to be Black Female Owned Suppliers. This in-order to maximise Procurement-spend points on your BBBEE Scorecard. Surely that is not a ridiculous expectation given the demographics of our country?

What the innovators of BBBEE recognized was that even that 22% of Black Suppliers just are not there. They do not exist currently. That’s why spending Enterprise Development funding on creating those businesses so that the company is eventually able to meet its target, is a non-negotiable, sensible thing to do.

Where New Enterprise Development goes wrong is when a company elects that instead of investing that 1% of Net Profit into its own Supply Chain, it will instead DONATE that 1% to a New Enterprise Development Incubator, far-far away from its own business. An incubator prepared to remove the problem away from the donating workplace, incubating Internet Café’s, Vegetable Retailers and even (I kid you not) Ice Cream Sales People marching up and down a beach selling Ice Creams, and where the Incubator charges the company R150 000 per beneficiary to do so, while maybe spending R30 000 on each of those beneficiaries, if they’re that lucky.

This is FRAUD. It is depriving Employee’s and ex-Employees and a company’s naturally potential extended network, of the opportunity to do something other than work in a menial job for the rest of their lives or worst wallow in unemployment and unemployability.

That is what gives BBBEE a bad name. That is where the money is wasted and where Employers rightly have a right to complain that BBBEE has become about the money without any positive consequence. This is the work of savvy Consultants, ring-fencing funds which were never intended to be used with a tick box mentality.

Worse, it is Trade Unions who get co-opted and end-up colluding with these Consultants to defraud their own Trade Union Members of that which is rightfully theirs, for their personal enrichment. These Trade Unionists should hang their heads in shame for having let their own members down.

Supplier Development

Supplier Development is even worse. This is where a company is required to invest a minimum of 2% of Net Profit After Tax in facilitating essentially New Enterprises which have emerged, and ideally which have been created with the company’s assistance, to morph into fully-fledged Suppliers within the supply-chain of the business itself. Again, here the targets are not onerous, namely 15% of all businesses procured from having to be Black Owned businesses making a turnover of less than R10 million a year and another 15% of those doing a turnover under R50 million a year. Come on South Africa, expecting companies to stretch to do 30% of its procurement business with Black Businesses is intelligent strategy, not a massive burden which it is being made out to be?

The fact that Business Owners are most probably correct in asserting that they cannot find worthy Black Suppliers of the magnitude required, is precisely why the BBBEE Scorecard prescribes these targets and directs that 2% of NPAT be used to fund the development of these beneficiary New Black Companies.

Again, the problem is that instead of facilitating the implementation of this positive strategy, Consultants are so busy developing schemes for companies to be checking this off their to-do-list while not doing so at all, is a massive embarrassment to the corporate sector and to our country as a whole.

Avoidance of NPAT Declaration

The favorite mechanism facilitated by Consultants, Accountants, Bookkeepers and Auditors colluding together for fee’s, is to ensure that companies never realise NPAT, despite doing turnovers way-in-excess of R50 million. Who do these companies believe they are fooling? Do they not realise that the CIPC has begun issuing penalty notices for such fraud? What do they think the most recent CIPC Written Notice to the PIC to recoup the R4 billion paid to Ayo was? A mistake? More importantly while the average Consultant professing to be a BBBEE Expert may not have to belong to a Professional Body (yet) and therefore be accountable for their services and professionalism, those Accountants, Bookkeepers and Auditors colluding in this fashion are directly accountable to Professional Bodies. The jury is however out on the professionalism and political will of those Professional Bodies to do their jobs and initiate investigations into such illicit collusion and impose the required penalties?

General Misuse and Crime in BBBEE

There is misuse and abuse in every one of the 5 Elements in the Generic Scorecard and in additional Elements which constitute part of Sectoral Scorecards such as that of “Responsible Marketing” under the MAC Charter. I will endeavor to examine this litany of crime in a follow-up article.

Employee’s on whose behalf BBBEE has partially been created, are rightfully entitled to their indignation in this regard. Indeed, there seems to be a muted resignation amongst the majority of workers that if they resist too loudly they stand to lose their jobs and in such a precarious economic market that is extremely likely. It doesn’t make the misuse of BBBEE any more palatable though. If anything, it reeks of abuse. A country is judged by how it treats its most vulnerable and there can be no argument that when it comes to the stratehic intent of implementing BBBEE, our country has failed the very market it has targeted to benefit from the proper and effective implementation of BBBEE.

Quo Vadis – Where to from here?

Save-to-say however that it’s not good enough to criminalise and ostracise such corrupt practitioners in our world of BBBEE, or the other Professionals who collude with them, or even the Employers who pay for and commission such criminality. We have to collectively regulate by tightening-up on BBBEE regulations and practices and directing that if a company wants the benefit of BBBEE Verification and thereby SANAS’s protection to be allowed to continue to operate and do business, that company must be willfully and mindfully compliant and show growth year on year which is more than the BBBEE Scorecard, checkbox mentality currently being experienced in the corporate and industrial sectors which constitute our economic framework in South Africa.

Who will stand up for the vulnerable in South Africa?

In my Professional Opinion

By: Dr. Ivor Blumenthal

As a Broadcaster, I have the unique privilege of interviewing remarkable people. Selfless and more concerned about the vulnerable in society, these people always have suffered personally in one way or another and in the process of triumphing over adversity they develop a burning passion to help others.

Two recent interview’s I have been privileged to conduct about Vulnerable Groups, stand out for me.

The first was about ADDICTION. and related to an institution in Johannesburg called Phoenix House. With over 8 million people in this country recognised as having one form of addiction or another, Phoenix House has for decades been one of the rare places to which parents and friends could turn to for help when no Public Institution could help or cared.

You have to have your head so deeply buried you-know-where, not to be aware that services for the treatment of Addiction available from our Government have collapsed in South Africa. Not only do neither our Department of Health nor Social Services not have competent, interested or committed people heading up those Departments any longer, our Government has long ago lost any interest in catering to vulnerable groups which need help and assistance. That is to say except during elections when they role out the faux sympathy and empty promises in the hope of stealing votes with those false undertakings. In speaking with these families, it is apparent to me that the parents and families of Addicts and other Vulnerable groups in our society are so sick and tired of being lied to and have become so mistrusting of politicians and even some Private Sector Business people, that their jaded souls have simply shut down to any promises at all. Let-alone the false ones.

My interview with Laura Brady, General manager of Phoenix House can be found at https://soundcloud.com/conbussa/social-welfare-in-sa-incompetent-criminals-led-by-a-minister-who-deserves-imprisonment.

Phoenix House used to be under SANCA the SA National Council for Addiction, which no longer received sufficient Public Funding from Government to keep Phoenix House going. Lottery money quickly disappeared and the institution was left high-and-dry, having to close down.

Now Phoenix House has been re-opened as a Private Venture, sponsored by an ex-addict who was helped into recovery eight years ago at the institution. Phoenix House has 20 beds in its in-patient center. While it used to have an outpatients unit, it had to close that down because of funding.

In reality, 15% of every South Africans are ADDICTS. South Africa has 8 Million addicts.  Addiction affects everyone in society. It doesn’t discriminate. The SA Government itself claims formally that Drug Addiction is twice the world’s norm. SAPS acknowledges it is out of control. The government, therefore, knows how bad the problem is. Yet…..?

Because Phoenix House is not a registered non-profit organisation it is NOT ALLOWED to fundraise. Every patient, therefore, has to be fully funded. Some Medical Aids do cover the shortest of their programmes costing R28 000. Significant self-funding has to kick in for longer programmes.

The second interview I have conducted recently on Vulnerable Groups was on the issue of Disability in South Africa. It was with Martin Brown, previously a successful and very active sports personality, who in an instant became so profoundly disabled that he has now to use a stick in his mouth to be functional. That interview can be found at https://soundcloud.com/conbussa/has-disabled-life-in-sa-changed-in-any-way-since-madiba-took-over

What struck me about my interview on Martin’s remarkably positive and fulfilled life, was how hard a person who is disabled has to work to make a living. It’s not bad enough that a person in this position has to deal daily with the challenges placed before them regarding their actual disability and surviving them both physically and mentally. When it comes to work, career and career progression there is no question that despite many legislative and regulatory opportunities having been created for the Disabled at work, chiefly by the Treasury and in the form not only of tax concessions but actual additional deductions permissible for employing people with disabilities, there is no active facilitation of this process from anywhere. Certainly, the Department’s of Social Services and of Labour are silent when it comes to creating opportunities which are common in Europe and even the USA but which are non-existent in SA to facilitate the introduction of people with disabilities into the workplace, effectively.  

Whereas the Employment Equity Act and the very presence of an Employment Equity Forum’s in the workplace were initially intended to promote, track and report on the successes of introducing people with Disabilities into the workforce, there has been no follow-through whatsoever and absolutely no enforcement of any kind to ensure that this is accomplished. DOL has been noticeable by its absence in this regard.

Additionally, while we may have had a very promising “Ministry for the Vulnerable” introduced under President Zuma’s first term, the inability and lack of capacity to contribute, by those placed in charge, saw this Ministry shut down by the start of his second term.

The reality is however that we cannot rely on any Government, but especially not our own, to have the interests of the disabled at heart. It never will. It is really up to owners of small, medium and large businesses to realise that unless they personally drive the introduction of people with disabilities into their own workforces, then this category of civil society will forever be marginalized and remain on the sidelines. It is about personal passion not just to do the right thing but to do something which is effective in boosting productivity and consistency amongst the workforce.

During my interview with Martin, I was reminded that it is all about the quality of leadership. That, within a community such as that of Disability, a Leader has to have super-competencies tenacity, passion, and commitment. Often because they themselves are people living with disabilities, to begin with, who when elected have additional challenges and responsibilities besides their own personal ones, to then have to deal with.

I was left wondering however whether to truly represent the Disabled effectively, consistently and in all quarters where representation is required, one has to oneself be disabled? I personally do not believe that is necessary. Instead, I have seen around the world that the Disabled Communities of North America, the UK, Germany, etc. are best led when there is an integration of effective leadership from everywhere, not just from within the Disabled Community in a particular country.

Is that true, reverse integration?

Is it still possible to create a Small Business Economy in this country?

In my Professional Opinion

By Dr. Ivor Blumenthal

The Mayor-elect of Johannesburg, Herman Mashaba has campaigned on a ticket squarely focused on the creation of a Small Business Culture, capable of generating thousands of new jobs. The problem is that in Gauteng in-particular, but equally in the Western Cape where the DA governs, we have a Capital Intensive economy, focused on the use of technology primarily in the provision of services and very definitely waning in the areas of manufacturing and beneficiation. Is it, therefore, possible for Herman Mashaba to break the back of an ever-increasing decrease in the number of small businesses in play, and the rampant increase in the number of retrenchments and employee rationalisations going on in today’s workplaces?  

The primary role players of National Government which are entrusted to work with Local Government in this endeavor are the Departments of Trade and Industry, the Departments of Labour and Public Works and very definitely the Department of Finance. Politics aside, it should be that irrespective of which Political Party governs a Province, these National Departments should be working together in-concert to present every Province with a bouquet of opportunities designed to kick-start a waning National Economy. They are, however, not doing so. Importantly in the Western Cape, these Departments seem to be doing everything they can to sabotage the progress of that Province in having access to and the utilisation of funding controlled by the national fiscus, or being involved in national strategic plans designed for growth and development.

What should a Local Government focus on, were it to seriously want to do something to create a labor-based economy in an environment which is service and capital pervasive? More importantly, the question should be re-phrased. In the areas which are controlled by Local Government, and possible in-terms of that Local Governments mandate, what can be done? I say this because much of the campaigning which preceded the Local Government Elections provided false promise to voters that Local Governments could deliver on Provincial and National Government competencies.

If the holy grail of Job Creation lies in Small Business creation, then that is where a Local Government must begin to plan. The fact is, however, that a forward-thinking Local Government should never ignore its pre-existing Business Base as part of the solution in this endeavor. There is a school of thought which believes that many more jobs are potentially in the making amongst Medium and Large Business operations than in small emerging ones.

Whatever the science in this alchemy, these are some of the things that a Local Government may be wise in considering.

Focusing on what is within the control of our Local Governments, it is true that Local Governments own property and land. They own the ability to change policy on Rates and Taxes, which will be explored later in this article. They own the responsibility for the provision of services, water, and power to the Rate Payer which includes the option to introduce alternative energy into their wards. They own some of the Roads and waterways within their geographical scope. They own the enabling environment which is pervasive for services, some of which have been taken by the Private Sector but could be shared by the Public Sector equally. As an example of this last point, Broadband is now considered to be a Human Right in many countries around the world and in that endeavor it is Local Government which is seen as the great enabler of that right. What Local Governments also own is the responsibility to ensure a clean, healthy and safe working and living environment for everyone living in a Ward.

Taken together, these factors all add up to wasted opportunities for a clear-thinking Local Government to capitalize on opportunities in every one of these spheres to spur the creation of new businesses, increasing the capacity of existing businesses and understanding that a good Local Government is an Enabler rather than necessarily an Operator.

Local Governments are entitled. Way beyond what they have actually received historically, that entitlement is to a share of what every Government Department is allocated by the National Treasury, funds National Treasury manage on-behalf of the Fiscus. The problem has been that whereas the people are the dog, and the greatest representation of the people is at Local Government level, it is the tail, that small, insignificant, massively over-entitled tier of Government which controls the purse-strings and disseminates funding on the basis of political patronage rather than where such funding can best be used. That, however, is a Political Party tussle which we do not need to get into in this article.

A good Local Government operation will use its Rates and Taxes base effectively, to incentivise many objectives in an economic empowerment strategy. As a few examples, there was a time when the establishment of businesses in rural areas in a Province was incentivized directly with Rates and Tax holidays combined with National relaxation in fiscal taxation. In every province, there are Rural areas which require heavy investment and new business ventures. Give those Entrepreneurs Rates Relief. Tax Relief. Actual financial incentives by-way of Grants to employ people and retain them in decent work. Create hubs for services which are privatised and able to create decent and sustainable jobs and cancel their contracts if they don’t. Privatise Essential Services and reward the companies responsible on the basis of performance and not patronage. Heavily incentivise a labor-intensive strategy and not a capital intensive one. Award Tenders on the basis of Labour Intensive projections and give no weighting to solutions which are so technologically-driven that one Engineer can replace 20 laborers. That does not mean that Capital-Intensive, technologically driven businesses will not be celebrated but they should not be incentivised with scarce financial and other resources. The secret is to embrace technology by privatising the provision of centralised scarce services such as CAD Centres, 3-D Centres, Plan-Submission Centres, Innovation Hubs, etc. and by allowing Rate Payers and their Staff to use these centers at discounted rates, but only in-so-far as they are a means to an end, that end being Human Job Creation and not technology for the sake of technology, instead.  

It is said that Print is dead, that manufacturing furniture should be done by Computer Numeric Controlled robotics and not people, that the laying of paving should be automated and that the painting of houses should be by robots. This is one way to go. But, and this is the thing, it need not be the case exclusively. There are opportunities in a thriving economy to create Industries which are complementary because they are planned and quality assured. It only becomes so when we become lazy to think and susceptible to bribes, corruption and interference from individuals who are not public-hearted or spirited.  

What it takes for a Sectoral Association to be recognised as a Statutory Body.

In my opinion

Dr. Ivor Blumenthal

It seems to me that in South Africa, every Industry Association aspires to become enshrined in legislation, as a Statutory Body. As if being a Statutory Authority will somehow create a monopoly for the existing voluntary Association and its Office Bearers which will prevent other legitimate Associations from competing for membership. Those calling for Statutory recognition genuinely often seem to believe that becoming a Statutory Body will position the Association to be automatically recognised as the dominant voice in an Industry, capable of demanding and automatically becoming entitled to respect and compliance from all players, not only those who had previously been voluntary members.

None of this is the case, however.

By a Minister agreeing to create a Statutory Body, there are express Laws and Regulations against creating monopolies which are ring-fenced and which result in monopolistic implications. A Statutory Body is statutory because it’s existence is enshrined in legislation and it is linked to one of the many Ministries which collectively operate as Government. It, therefore, becomes formally recognised and acknowledged by Government and automatically therefore by all Social Partners i.e. Business, Labour and Government. This distinguishes it from a Voluntary Association composed of members who on a voluntary basis collect for purposes of identity, recognition amongst peers and activities designed to enhance the Industry as a whole.

To be recognised as a Statutory Body generally requires that Industries, which have identities in common and which identities overlap, are grouped on a Sectoral basis. It is highly unlikely that a Statutory Body would be recognised for one Industry on its own.

In my experience as a Strategic Consultant to Business, particularly in this volatile and racially loaded politicised environment which we operate in at present, perhaps the most critical reality which Organised Business faces, is that whereas Ministries are sometimes open to allowing for new Statutory Bodies where they make logical sense, in allowing for such a legislated formation, Ministers are often quick to impose rather than recognise such authorities.

An imposition of a Statutory Body, therefore, implies that some Ministers will create Statutory entities, by marginalising and ignoring current Organised Industry or Sectoral groupings. Some elements in our Government, intent on extreme methods of redress, see Statutory Bodies as the ultimate form of transformation. Transformation on steroids. A method of imposing new prohibitory rules on a collection of unsuspecting Industries within a Sector and a completely new and different group of leaders who do not come from the Sector or have no long-term history in that sector. Leaders instead who are people that are deployed by Government and Organised Labour intent on breaking the Sector loose of historical leadership and direction and providing Government and Trade Unions with access to the wealth and opportunities inherent in such a Sector.

The message to Organised Business in this regard, therefore, is to be careful of what you wish for because it may come, but at the expense of your own involvement.

The secret, I regularly counsel Business entities wishing to pursue this route, is to “BE the Statutory Body before asking to be recognised by Government as that Statutory entity”. The only conclusion which should be permitted is that there should and can be no other organisation which may be considered to be fit-and-proper to assume that mantle as the logical Statutory Body which should be enshrined in legislation. Even then, there are no guarantees. Not if you consider that this Government will generally view its Statutory Bodies as vehicles for Transformation and Change.

Of course, I will also counsel Organised Business, that being the Statutory Body sometimes obviates the need to be recognised as such by Government. That it is more important to have popular support than formal legislated recognition. That it is more critical to have the involvement of voluntary members than to confine one’s legitimacy to the recognition and consequent constraints imposed, from a Government which in the eyes of the majority of the business community is often considered itself, to be extremely illegitimate.

Nevertheless, legislated or not, formalised or voluntary, what an aspirant Voluntary Association wishing to become an enshrined Statutory Body must acknowledge is that the scope of its operation needs to be broad and all-encompassing as does its scope of potential membership.

Within that scope needs to be the well-defined and operationalised constitutional roles as The Trade Association, The Employer Association, the Professional Body, sometimes including the Export Council and always including the responsibility of being accountable to the Public in-general not just for Competency but especially for the Behavior of individuals and companies included in the scope, over which that Statutory Body presides.

To be effective as the single most critical organisation in a Sector, though not necessarily always recognised by Government, requires a strong willingness to Transform the Sector. Transformation relates not just to the obvious which is the dominant race of those working in, managing and ultimately owning the businesses which constitute the Industries which constitute the Sector. Transformation relates equally to the equitable distribution of gender of those who work in, manage and own the Sector. However, it also relates to the acceptable percentages of the disabled who are seen to be active in any given Sector.

 

These are not all states of current existence. What they need to be are aspirant target categories recognised as sufficiently important enough to have to set out programmes for implementation and objectives to be chased, within time frames which are generally acceptable and achievable by all Social Partners.

It is under the guise generally of Transformation that in some Industries, race and the clear advancement of the agendas of the few, marginalise and cleanse Industries and entire Sectors, of the capable and competent, decimate Sectors of standards and quality, and instead ensure the installation of mediocrity, negligence, lethargy, and apathy.

That is why the only successful mantra which applies is to “BE the Statutory Body on a voluntary basis before asking to be enshrined in legislation as such” and even then don’t take it for granted that Government and Organised Labour will do the right thing.

Beware Professional Bodies selling their soul for membership and money.

In my professional opinion

By Dr. Ivor Blumenthal

In my previous article, I indicated that conventional wisdom dictates that it takes 10000 hours or 5 years of practice for competency to manifest itself and for an individual to be able to think of themselves, as truly Professional.

Since that article was published I have been castigated and taken to task by so-called experts including Professional Body managers. Generally, criticism against my assertion seems to be as follows: “In this modern age of technology, a person does not need 10000 hours of practice because most of any skill these days is inherent in one’s tools rather than in the individuals’ competence. Thus a person with a cellphone or Ipad has sufficient technology at their disposal not to need to practice and re-apply themselves for 10000 hours. That iteration is inherent in the computational processing power of their tools at hand.”

This argument is insulting to those many thousands of University and Technical College Graduates who have toiled hard to develop the self-confidence to be able to sell their very necessary services as both Blue and White-Collar Professionals. It smacks of entitlement and wanting to reduce standards for political and racial reasons rather than for what is in the best interests of any Sector or Industry. Its success will foresee the demise of South Africa’s production and professional integrity which many of us have cultivated Internationally for so many decades.

I have suggested that what a Professional Body should be doing is introducing lower levels of Professional Status leading up-to Master Status as the ultimate level of Professional Certification. Thus an “Associate” or “Technical Professional Level” after 3 years of work experience and practice, as a precursor to “Professional Practitioner” status after 5 consecutive years, would make better sense for a Professional Body to apply in regard to its membership. It would allow for gradual recognition and development along prescribed stages of milestones being reached.  Undoubtedly for the Professional Body, it would also make more financial sense in-that what is currently seen as one product on-offer could evolve into multiple categories of products, each at a different level of application and each as a separate income source for the Professional Body.

It is obvious that Professional Bodies, which want to rush their members into the highest, rather than the optimum level of Professional Recognition, are being short-sighted and quite frankly both lazy and greedy.

It is nonsensical to suggest that a Professional Body which is licensed by the South African Qualifications Authority (SAQA), would be granted authority to simply offer one Certification when they are obviously destined to govern the entire stepladder of Professional Recognition for a Sector or Industry.   To envision multiple Professional Bodies offering different levels and strains of Professional Recognition within one Sector or Industry is too horrid and far-fetched to contemplate. Not only would it be financially unsustainable but it would completely confuse the prospective membership of any Profession and scare the public away because of the complexity inherent in overlaps and shortfalls.

A competent Professional Body would develop a complete “Taxonomy of Professional Recognition” from school-leavers through to Master Practitioners. It is from that Taxonomy that it would draw specific qualifying stages for Professional Recognition to be awarded and would detail methods of articulation and integration.  As an example, a single Professional Body would thus recognize members as Professionals who are professionally competent as new entrants (Associates), technically proficient practitioners (Professional Practitioner), Senior Practitioners and Master Professionals.

One has to ask why then, are so many of the existing SAQA-licensed Professional Bodies content to offer only one single designation when multiple designations and Continuous Professional Development (CPD) learning opportunities are their oysters? A lack of insight? Laziness or Apathy? A lack of competence to do what is required? Too much competition or perhaps too little competition breeding complacency?

Naturally, any Professional Body offering school leavers, with two months of experience a chance to be processed (for a fee) through a ridiculously simple process of form-filling in-order to be recognized and designated as Professionally Competent at the highest level (for an additional fee) within any Industry is attractive and will attract membership. But this is not a sustainable model. It is one built on greed, shortsightedness and often one driven by Training Providers wanting their graduates to have a strategic advantage in the marketplace. It is not one built on the integrity of the Profession at-hand. Training Providers should have no role in any Professional Body. The latter is a check and balance that the Skills Development taking place in an Industry has worth and is efficient, fair and credible. It is ultimately a check to determine whether Professionally Competent People are being produced to add value to a Sector or Industry.

Ultimately the question to be put and answered is: “How Professional and Competent are Professional Bodies, to be entrusted with the Professional Recognition of their Members?”

People, Politics, Education and Innovation