Business should stop short-changing itself and start fighting

John Kane-Berman says a campaign is needed to show the links between policy, investment, growth, and jobs

The latest figures showing that the economy is in recession and that unemployment is higher than ever before present an opportunity for business to hijack the government's claimed strategy of "inclusive growth".

A recent survey by Brunswick, a consultancy firm, showed that 37% of South Africans were positive about capitalism. Given the rhetoric berating "white monopoly capitalism" this seems a high proportion. On the other hand, it chimes with surveys by the Institute of Race Relations showing that most people have more important things to worry about, especially unemployment.  

Yet business devotes more effort to boosting its empowerment credentials than to making the case for business. An example is a recent article by the CEO of Vodacom, Shameel Joosub. Under the title "Transformation is in our DNA", he wrote of the billions his company had spent to transform people's lives through the Vodacom Foundation and other initiatives.

"Last year," Mr Joosub wrote, "our efforts were rewarded when we were named the most empowered company." 

But the manner in which his company has most profoundly "transformed" lives for the better is through its normal business operations. The same applies to other cellphone companies. Between 2000 and 2014 the number of cellular telephone subscribers rose from 8.34 million to 79.28 million. Cellphone penetration has risen from 18.6 per hundred people, to 149.2 per hundred. 

The 851% rise in the number of people with cellphones easily beats the 320% rise in the  number of beneficiaries of social grants over the same period. Even young children today, many of them in poor households, take cellphones for granted. But it was not long ago, before the advent of cellphones, that only one person in nine had a (landline) phone. 

Vodacom is not the only company failing to exploit the opportunity to make the case for business as business. Hollard recently ran an advertisement proclaiming that "we do so much more than just insurance – we  make a world of difference to the lives of people around us" via "social impact initiatives". But there was no attempt to explain how business as business improved people's lives.

Trialogue, a company promoting corporate social investment (CSI), wrote six weeks ago that the "sustainability of business is linked to the socio-economic health of the society in which it operates". Trialogue estimated total CSI in 2015-2016 at R8.6 billion.

Worthwhile though this spending might be, the case for business in South Africa does not rest on its empowerment spending or on CSI. The estimate of R8.6 billion on CSI is only 2% of the R401.5 billion invested by private business in 2015 – a sum no higher than the one in 2008. It is far below what it should be – prompting accusations that business is on an "investment strike".  

What business needs to do is explain why that figure is so low. It needs also to explain what needs to be done to push it up. This means mounting a public education campaign that goes beyond burnishing empowerment and CSI credentials. No amount of empowerment or CSI spending will get the economy out of recession and on to a sustained growth path. 

Apart from its finding of 37% support for capitalism, the Brunswick survey showed that almost two thirds of South Africans believed the country benefited when business succeeded.  Almost 71% thought business leaders should be more vocal on politics.

These figures suggest that there is a promising foundation for a sustained campaign to hammer home the policy changes needed to push support for business even higher and to counter the impact of Marxist propaganda. Business needs to join the battle of ideas to show the links between policy, investment, growth, and jobs. A good start would be to hijack the slogan of "inclusive growth" and spell out how to achieve precisely that. It would entail leapfrogging over the government and the ruling party to talk directly to ordinary people.

* John Kane-Berman is a policy fellow at the IRR, a think-tank that promotes political and economic freedom. His memoirs, Between Two Fires - Holding the Liberal Centre in South African Politics, were recently published by Jonathan Ball.