AFTER THE BELL
The Gathering 2022: Takeaways from the economy panel
Daily Maverick’s signature conference, The Gathering, took place on Thursday, 24 November, covering much important ground. I participated in the economy panel, chaired by my colleague Ray Mahlaka. We were joined by the chair of Bank Zero, Michael Jordaan; Chief Executive of the Harambee Youth Employment Accelerator Kasthuri Soni; and the founder of the Purple Group and former head of the SA Post Office, Mark Barnes.
This year, The Gathering focused on solutions, since everyone in South Africa holds PhD-level credentials in problem identification. Our panel on the economy began with Kasthuri Soni highlighting the need for providing breakthrough moments for young jobseekers.
She made an important contribution and emphasised concentrating on the moment between graduation and finding a way into regular employment. In a declining job market like SA’s, crossing that chasm is all the more difficult since companies are reducing their headcount.
It struck me that SA does have several programmes in this field, most prominently the Youth Employment Service (YES) programme launched in 2018. The effort has lots of support. About 2,200 partner companies have created about 93,000 “work experiences”.
This is meaningful, but not as consequential as it seems, if you compare it to the 4.8 million people, aged 15-34, who are technically unemployed.
I love the work organisations like Harambee are doing, but the hard and depressing truth is that nothing compares to overall economic growth in accelerating youth employment. This is partly because, with broad economic growth, companies don’t have to be encouraged to help jobseekers cross the chasm – they are there pulling people over the gulf as quickly as they can.
I also wonder whether the Expanded Public Works Programme, which is a state-funded employment system (and actually much larger than YES), should not be merged with YES and take over some of YES’s aims. Just a thought.
The second point I want to highlight was one made by Michael Jordaan, which was about size. I should also say it was an absolute pleasure to share the stage with Jordaan and Mark Barnes, who both happen to be extraordinary business builders. They both have a way of isolating the problems and proposing solutions in very clear and often funny terms, as, I would imagine, a consequence of their experience and history.
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Jordaan’s point was that we are obsessed with grand solutions, but we shouldn’t be overly preoccupied with size. This partly stems from his own experience in his post-FNB incarnation as a venture capitalist. Size comes with time, was his advice; it’s more important to focus on solving a specific problem, because once that is achieved, growth comes naturally.
I suspect this is absolutely correct. There is a deceptive power in starting small because it creates tangible momentum and it bakes growth into the enterprise. In some ways, that growth DNA stays with an organisation to the extent that it can become second nature.
The same probably applies in the reverse too; declining organisations come to expect they will decline further, and employees stop trying to innovate.
Barnes’ main point, which he has made before in his own words in his Business Day column, was about what he refers to as Local Economic Empowerment, or LEE.
“Instead of paying a basic income grant or other social relief or distress grants (of whatever description), let’s use that money to fund local (within walking distance) start-ups exploring diverse economic opportunities,” is the essential idea.
What lies behind this is what Barnes describes as the fallacy of believing a nation of dependents can be a sustainable foundation for political power. I cannot say how much I prefer this idea to the government’s current plan to spend billions trying to reproduce SA’s private sector health insurance system taking it into public hands.
Several of the panel members discussed the trust deficit between the public and private sectors. Barnes says government suffers from an inferiority
complex and business suffers from a superiority complex. Perhaps.
But you know, I’m sorry, I just get impatient here. Personally, I see lots of arrogance coming from the government side too – often much more than the cautious rectitude of business.
The bigger problem I suspect is a lack of recognition and a poor grasp of the dynamics, faculties and difficulties on both sides. Either way, that doesn’t seem like an insurmountable problem, but clearly it is, as the low and declining business confidence index demonstrates. BM/DM
- Number of YES work experiences updated and corrected.