Monday, July 28, 2008

BEE stifling entrepreneurial spirit

The dawn of the 19th Century marked the beginning of the process of continuous industrialisation in Europe, America and around the world.

The Industrial Revolution signified a momentous occurrence in the epoch of human advancement. Historians battle for the limelight of what the causes of this revolution were and cannot come to an agreeable conclusion.

I, however, believe that the spirit of entrepreneurship was the primary precursor to the revolution.

An enabling environment existed that inspired the ingenuity of inventors to shine and for the pace of technological advancement to intensify.

Karl Marx saw the Industrial Revolution as polarising the bourgeoisie and the proletariat – that the common ill of capitalism. The Russian Revolution attempted to shake the pillars of this capitalist system that resulted in the Great Depression, causing great misery to millions of people.

As they say, the rest is history. I do not intend to labour on the history of the Industrial Revolution, but to interrogate certain practises legislated by the government to allow the black masses to share in the spoils of the Industrial Revolution.

Broad-Based Black Economic Empowerment with all its good intentions has its greatest shortcomings.

Moeletsi Mbeki correctly pointed to the truth that BEE is an impediment to entrepreneurship.

It has become apparent that for political bigwigs, BEE is the easiest pathway to overnight accumulation of wealth. They defend violently their “right” to participate in business, while their attention is redirected from the provision of basic services to the poor majority to the performance of the share price.

In the words of Rudyard Kipling, in his Barrack-room ballads, 1892: “Oh, east is east, and west is west, and never the twain shall meet.” Politics and business, however, like twins connected through the umbilical cord in the womb, should at all costs be forbidden from any thoughts or practise of incestuous relationship in maturity.

None of us is opposed to the support that each owes to the other. It is vital to guard against the general condonation of conflicts of interest.

Given the levels of corruption, there need to be restrictions on those holding political office to get involved in business and such restrictions must be matched by appropriate punishment for offenders. The poor in spite of fronting Trusts are not beneficiaries of empowerment transactions concluded by connected ANC heavyweights.

What is more troubling is when the empowered continue to benefit under BEE as previously disadvantaged. How is Tokyo Sexwale disadvantaged? Why are he and others continuing to benefit under BEE? Are they not empowered?

There is an urgent need to stimulate growth of the economy and the recycling of equity from a white shareholder to a black shareholder will do nothing different to give the economy a kick on the backside to get it going. None of those continuing to benefit from these transactions display any entrepreneurial savvy.

South Africa at this moment requires those who will create new industries, new business empires, new inventions, etc. South Africa requires the new Oppenheimers and Ruperts, not “passive” investors who often lack any in-depth knowledge of industries and sectors they invest in.

We need centres of entrepreneurship across the country, where young entrepreneurial minds can be nurtured and supported by big business. The City of Waterloo in Canada has what it calls Accelerator Centres which aim to assist early stage companies in their critical growth and development phases. These companies are further supported by research that exists in the centre.

Instead of having the membership of the ANC as a ticket to business success, we must be promoting entrepreneurial ability as the key to true and lasting economic empowerment, where equal opportunity exists for everyone.

0 Opinion(s):