I was privileged to work on a project in South Africa for the last two weeks. I am assisting the faculty Economics and IT of the North West University in Vanderbijlpark to realize a business incubator on their campus.
The faculty has over 5500 students and offers degrees in Economics, Accounting and IT. The ambition of the faculty is to become more entrepreneurial and to strengthen the relations and alignment with public and private organizations. Headed by their ambitious dean the faculty’s mission is to realize an incubator facility, an office for professional services for startups and local sme’s, a strong (international) network and a portfolio of short courses and minors on entrepreneurship and innovation. This project has a time span of four years and I will return several times. The project is very interesting and it is exciting to work with ambitious experts from South Africa, the Netherlands, Denmark and the UK.
But it is not only the project that intrigues me. It was my first time in South Africa and I am fascinated with the many opportunities this country offers. But South Africa has also many challenges to overcome. I have visited several countries in the world but I have never experienced an economical and social gap as big as I have seen here. While driving form Vanderbijpark to Johannesburg and Pretoria I have seen a Western country located in a development country. South Africa is a country with two societies. The sceneries of luxurious shopping malls, fastfood chains and villa parks are interchanged with views of slums, beggars and heaps of garbage. The poverty among the black population is still very high and most of them are clumped into slums or the so-called townships.
Black Economic Empowerment
When the dark chapter of apartheid was closed in 1994 several methods were undertaken to create more equality between the (rich) white and the (poor) black. Many blacks now have entered the middle and upper class and are strongly represented in politics, universities and businesses. This was made possible because of the Black Economic Empowerment act (BEE). This acts forces organizations to meet certain quotas for black employees, managers and owners. But this act has also a big disadvantage. Normally the most qualified person gets the job, but because of the BEE it regularly happens that unqualified blacks are preferred for qualified whites. This often leads to poor organizational performance or may even lead to severe damage or bankruptcy of an organization.
The BEE did not yet result in a fair distribution of wealth between blacks and whites and did not yet lead to a prosperous and unified nation. There is still a huge gap between the “haves and have nots”. And most (or maybe all) of the “have nots” are black. The reason for this gap can be explained by the fact that before the apartheid the infrastructure and wealth of South Africa was built for 6 million white people. After the apartheid this infrastructure suddenly needed to be shared among 50 million people. Logically this didn’t work and only a couple of million blacks were able to join, the rest of the black population is still excluded.
The poverty and economic inequality combined with a failing and sometimes corrupt police force has lead to unacceptable crime rates. Johannesburg is known as crime capital where murders, rape, armed robberies, carjacks are commonplace. But also in smaller towns people suffer from crime. In a middle class suburb the houses look like fortresses with fences, barbed wire and dogs. Everybody has their own horror story and people are really afraid. This threat is very serious and the number of highly educated people that are migrating to America, Europe or Australia is growing. People want to live a saver life for themselves and their children which is very understandable. But the result is that South Africa is loosing their capital and competencies while the country needs it so hard.
Nevertheless South Africa is a potential superpower. The country is rich on natural resources, many multinationals have their offices in Capetown or Johannesburg and there is a huge young population (black and white) with ambition. The positive effects of the BEE may become visible after one or two generations. The BEE now causes problems of underperformance and creates legitimate anger among qualified white people. But eventually an unqualified black person with a good paid job can send his children to a good school so the children becomes better qualified than their parents.
Back to the project
Based on the analysis above the role of education is essential to overcome the challenges of social inequality, poverty and crime. Skilled and entrepreneurial young people will improve performances of organizations and they will create new companies and jobs. More educated people, better organizations, more entrepreneurs and more jobs will lead to economic growth. If the South Africans are able to distribute this welfare fairly between whites, blacks, rich and poor than I expect we will see some really nice things from this beautiful country the next decades.
I really hope that our project will contribute to that mission.