The New Economic Growth Path

An opportunity of Women and Entrepreneurs

The Economic Development Minister, Ebrahim Patel, in launching what he refered to as the “New Economic Growth Path” said that - “South Africa has set itself an ambitious target of creating five million jobs and reducing unemployment from 25 percent to 15 percent in the next 10 years”

“The centrepiece of the new growth path is a massive investment in infrastructure and people through skills development, together with smart government and better coordination with the private sector and organised labour.”

Ambitious to say the least - but by the same token at least a step in the right direction

One aspect of the plan calls for commitment from government’s social partners in order to ensure moderate wage increases and the capping of pay and bonuses for executives earning over R500 000 a year.

I agree this is worthy of consideration and that companies and unions should perhaps look at setting a fixed guaranteed rate of salary increase, say for the next five years, based on the year on year inflation rate. However, should this happen, there should also be an embargo placed on all strike action related to salary increases for the same period. Where employees feel there is a need for discussions related to salaries, over and above what was granted, this should be done by means of workplace forums only and in the event of ongoing dispute be decided by means of arbitration. In other words an embargo on Salary related strikes for a specific period for the good of SA.

In the case of executive salaries I tend to agree with the idea of a cap on salaries over a certain limit as some salaries I have difficulty in finding any justification for. Executive salaries and performance bonuses must be clearly defined and aligned to specific performance targets – not profit driven. The basis for payment of bonuses etc must be based on 100% achievement of the goals and objectives as set out in terms of the performance targets. Failure must also have predetermined consequences.

The strategy goes on to outline some of the measures aimed at helping the country reach its growth targets some of which I outline below

Stepping up education and skills developmentincluding a review of the training system
Producing 30 000 more engineers by 2014 and 50 000 more artisans by 2015

In both areas I would like to add that greater emphasis should be placed on the role of women. We have many very capable women who are starting to stand out as leaders in industry. Women are our future and can motivate and challenge men in terms of the future.

We need to concentrate our efforts and encourage women to enter the artisan fields in the short term and consider degrees in engineering etc in the long term.

More women should consider furthering their education and training by undertaking studies at FETColleges and Universities of Technologies and these colleges and universities in turn need to embark on a recruiting campaign aimed directly at women.

Over the years, particularly in time of trouble and economic decline it was women who became the stalwarts and led and motivated the men through hard times. Their role now in the building of South Africa and the revival of its economy is invaluable. Women must want to and be prepared to become involved.

Another area specifically referred to in the report was - Promoting small businessand entrepreneurship by creating a single agency to consolidate Khula, SAMAF and the Industrial Development Corporation funding

Entrepreneurs and SMMES are the future of SA. However, current legislation impacts negatively and in many respects strangles all innovation.

Yes - Basic Conditions of Employment must apply to small enterprises but the LRA and other labour related issues need to be relaxed for SMMES. Unions will object to this but I really think that SMMES must be permitted to hire and fire as deemed necessary. This can, after all, be included in a contract of employment and if the employee does not agree with this then they do not have to accept the offer of employment. Let “Freedom of Choice” and “Freedom to Develop” prevail.

The creation of jobs and entrepreneurial opportunities and growth and the development of the SMME sector will depend on the relaxation – temporarily if necessary – of the LRA, EEA and BBBEE. SMMES are the way of the future and this is an area in which South Africans excel.

The “Commission on Growth and DevelopmentGrowth Report” released in 2008suggested there should be five areas targeted for long-term economic growth. These were to

Remain open to the world economy and new ideas
Maintain macroeconomic stability
Sustain high rates of saving and investment
Allow the markets to allocate resources
Maintain committed, credible, and capable governments (they left out Ethical)

Since 2008 what have we done, what progress has been made and what is going to change going into the future? Until we are prepared to address areas that impact negatively on the achievement of objectives then the rate of growth will be impacted and curtailed. We need an all inclusive approach and buy in by those who can make a difference. This includes Government, SMMES, Unions, Employers and most importantly the policy makers in all key areas. There is a need to begin again, to re-think our ideas but to do this more intelligently. The future is full of great opportunities but these are currently disguised as problems – let’s open the world of opportunity to women and entrepreneurs.