Clem Sunter

The Alternative National Democratic Revolution

2011-12-07 13:00

Clem Sunter

I do believe in a National Democratic Revolution; but not the one that has been peddled by the Left which is the same old, same old ideological stuff around redistribution of wealth. In its latest and more extreme form, it includes nationalisation of industries and land expropriation. The philosophy behind it is that the State must play an ever-increasing role in ordering the affairs of society. In other words, we as citizens walk behind the government into the future.

The word "democracy" means people power and my kind of National Democratic Revolution puts power in the hands of the people - not as a collective but as individuals. The State has an incredibly important role to play in providing the rules and conditions according to which every citizen has the greatest chance of fulfilling his or her potential as a human being. That is the mission statement of the State - that and no more. We all walk together into the future.

Now we have dealt with the generalities, let us get down to the specifics. Before we do so, I would like to quote two observations from government ministries in the wake of the publication of the National Development Plan:

- 90% of the jobs to be created in order to reduce unemployment in South Africa to 6% by 2030 will come from the small business sector;

- the challenge in solving South Africa's problems is not money but management. We have a crisis of implementation.

I agree with both sentiments wholeheartedly. Which is why I am confused. If we are to have a national democratic revolution, it is because we put the entrepreneur at the centre of the National Development Plan. Small business is no longer a peripheral issue - it is the issue if society is to be transformed over the next 20 years. I am therefore surprised that people with influence in the political space still regard entrepreneurs as grubby little capitalists that have to be tolerated. Whereas the former get a monthly pay cheque with no risk, the latter have to risk their all to get paid on an inconsistent basis.

China’s modern revolution, which has propelled it from 100th ranked economy in 1978 to No 2 behind America today, was based on unleashing the entrepreneurial spirit in China and opening its doors to the world. America remains the top economy in the world because it worships its entrepreneurs. They are more important than the President, representing as they do the future economic prospects of the country. We still worship the heroes of the past as opposed to the heroes of the future. Our culture must look forward not back.

So my revolution is a lot more radical than the old-fashioned socialist ideology which has proved such a failure wherever it has been implemented. We need a complete change in mindset towards entrepreneurs whereby we do everything to assist them from the generation of the idea to the formation of a business to growing it into a world-class company quoted on international stock exchanges.

What does this entail? Giving young people a quality education so that they have the competence to become an entrepreneur. Simplifying the labour laws for small business so that entrepreneurs can build their teams without worrying about the thicket of regulations that surround labour in the country. The unions will have to do an about-face for this to happen. Banks need to pay more than lip service to micro-lending; in fact it should be part of their scorecard. Local stock exchanges should be established by the JSE in the principal cities in South Africa to provide local sources of equity capital.

The mobile phone companies and networks should be designing devices and systems whereby entrepreneurs can market their products, collect the money and do the accounts. As electronic wallets, smartphones should enable entrepreneurs to make money transfers to distant relatives as well as pay for the goods and services they themselves require. Business schools must make entrepreneurship a core offering instead of relegating it to the sidelines in a few elective programmes. The whole franchise movement should be given a quantum boost as it represents a halfway house for entrepreneurs who are not prepared to start stand-alone businesses, and want the backing of a strong brand.

The government should issue rules on prompt payment to small businesses by their own departments as well as by big business since cash flow is such an imperative. A certain proportion of the supply chain of big businesses ought to be reserved for small businesses. Silver foxes should serve on the latters' boards as mentors. The tax laws need to be amended to give a tax holiday up to a considerable income as compensation for the risks entrepreneurs are taking. The Competition Tribunal should ensure that every industry has sufficient competitive space to accommodate entrepreneurs. We are still a big-business-dominated economy.

In the media world, South Africa should be the first country where the business press puts more emphasis on creating an innovation-seeking society than on the comings and goings of the big guys already on the stage. We should also have much bigger awards in the small business competitions and reality shows where celebrity moguls put entrepreneurs (not apprentices) through the hoops. In rural communities, we need to encourage local trading perhaps by recategorising a portion of welfare grants to be used as investment in start-up enterprises.

In my national democratic revolution, not everyone has to be an entrepreneur. Probably 20% of the nation will end up that way, but that will be good enough to get the unemployment rate down to 6%. Moreover, this type of revolution is far more inspiring than one where most young people become civil servants in nationalised industries. Slogging away for the government is hardly desirable in this age of personal freedom provided by Facebook and other social networks. Economic freedom means not having a boss, but doing it yourself and making enough money to have a good time.


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