Organised business has released a document that spells out its view on what transformation means and how to deracialise the SA economy. It could hardly be more different to the new mining charter.
The document was produced after a six-month think-tank process within Business Unity SA (Busa) and endorsed by its members. It defines an “end state” for transformation focused on broadening and deepening economic participation and benefit, linked to boosting competitiveness, growth and employment.
“Unless we do something to transform the structure of the economy, we are not going to activate its potential, because the economy is just not firing on all cylinders,” says Busa CEO Tanya Cohen.
Business wholeheartedly backs the objectives of broad-based black economic empowerment (BEE) and employment equity legislation, as well as sector-based BEE regulations — but, says Cohen, these have tended to drive a numerical, compliance approach rather than one aimed at transformation.
Business favours a strong focus on developing black entrepreneurs and small businesses, and clearing regulatory barriers and other exclusionary practices that stand in the way. Initiatives are needed that will enable a “transformation culture” within business. It calls for enhanced support for education and skills development more closely matched to current and future business needs.
And it seeks to clear blockages to employment and scale up youth employment initiatives. Business sees itself collaborating with government, labour and social partners to get these to happen, with Nedlac providing the forum.
Busa research shows how far short some legislation has fallen in terms of achieving its objectives, and how limited have been the efforts to measure what has been achieved. Assessing the BEE ownership requirements of the legislation and charters, the document says ownership redistribution has been very costly but largely limited to a concentrated number of established businesses which make up only a small part of SA’s economic activity.
The emphasis on ownership “has largely failed to deliver meaningful control and value to black people”.
Busa believes a shift is required in which established business drives significant growth of black business by providing access to markets, capital and skills. There should also be more emphasis on selling assets and creating new black-controlled businesses rather than selling shares.
The document notes there’s been too little progress in getting black people into top management jobs where they can exert real influence. Companies should recognise the economic value of diversity.
It’s a call to prioritise the substance of BEE over form. The end state, Busa says, is “a deracialised, vibrant, diverse and globally competitive economy.”
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