Ten Rules for Economic Growth

Ten Rules for Economic Growth

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I am passionate about the laws of economics and how they relate to business – and business growth in particular. Here are my ten rules, which I believe can lead to real growth in your business.

1. Honour your community

The community deserves the same honour as a father and a mother. When you establish a profitable venture, it is your duty to ensure that the community benefits as well. People within that community must be trained and employed on the project. There must be a transfer of skills which will then remain in the community and contribute to its empowerment.

2. Educate your children

Poor education lies at the root of South Africa’s dire unemployment statistics and the inability of entire communities to enter the economic mainstream. Government and the private sector need to work together to bring quality education to the children of the nation. It needs to start at primary school level and be followed through to tertiary level. A priority is to reopen the teachers colleges and urgently address the training and performance of teachers. The passion for teaching needs to be rekindled.

3. Do not lower standards of education and training

Solutions must be found to support those who cannot meet the entry level standards at any educational institution. There can be no lowering of the bar if we are to participate in the global economy. This applies to all levels, from primary school, through to matriculation pass rates, to teacher training and to college and university entry levels.

4. Give women the power to run things

Women are community-minded visionaries. They care about supporting families and children. They understand that people come first and that best practice means doing what is in the interests of the people. For example, mothers in disadvantaged communities should be allowed to run the school feeding schemes or scholar transport services as community enterprises – it would immediately put an end to the corruption and incompetence that plague these critical services.

5. Don’t import

Local manufacture and production need much stronger support. Government should impose strict controls to discourage imports into the country, provide strong incentives for growing local production, and introduce regulations to ensure that necessary importation is balanced by added value exports.

6. Do not employ foreign labour (outside the continent)

Bringing in skilled workers from abroad does tremendous damage to economic growth. Our focus should be on growing our skills base at home and, by extension, on the continent. Companies should have the foresight to build a skills pool to meet the country’s needs.

7. Do not front

Black economic empowerment cannot be achieved if fronting is practiced or tolerated. A primary objective of BEE, including the broad-based Codes for BEE, is to drive the development of sustainable black-owned businesses and black-owned industries. Fronting has been a serious impediment to establishing a black capitalist class and opening the economy to all.

8. Match reduced wages with increased profit share

If people are to be employed at a below-regulation wages, in the interests of stimulating business growth and job creation, then this should be matched with commensurate profit share. The labour unions are routinely criticised for their stranglehold on job creation, yet we need to be vigilant against exploitation of workers and our hard-won labour rights should remain protected. An equitable solution is to implement profit sharing that benefits all the people who work in an enterprise.

9. Enable community ownership of assets

Marginalised communities have to break free from the apartheid legacy of being excluded from property ownership if we are to open the economy to all. Those who enjoy the privilege of asset ownership (which includes the state) have a moral responsibility to find ways of spreading the ownership of assets. The Gestalt model calls for developers to include a structure for community share of ownership in new ventures, whereby the developers can make a profit but ultimately withdraw and sell the asset to the local community.

10. Buy local

Let the money spent on a project stick to the fingers of the community. This means procuring goods and services from the local community, promoting local manufacturing and enterprise development (supported by capacity building and skills training as required) and commitment from government to long-term procurement contracts from new local businesses. Multi-national companies that come in to a community to make a profit have a moral obligation to support and nurture the local economy in the areas where they operate, and leave a legacy of empowerment and growth.

How To Choose An Expansion Path. The answer starts with your strategic plan. Click here.

Mannie Hirsch
Mannie Hirsch has consulted internationally on the development of emerging entrepreneurs. He founded The Gestalt Group in order to pave the way for emerging entrepreneurs to enter the mainstream of the South African economy. For more information, contact Mannie at mannie@gestaltconsult.com, on 011 781 7841 or visit www.gestaltconsult.com.
  • Naledi Mabuse

    Hi

    When I read this article it resonated with whats been on my mind lately about the state of our economy; I especially feel very strongly about points 2 and 3, if we want to see a different kind of future for SA then we can not emphasis enough, the importance of education as whole!!!

    Thanks for the article, I will log onto website to see what else Mr Hirsch and his team are doing!