50 million wealth creators
Today the Sunday Times launches the Each One Hire One campaign to create jobs. In the next four weeks, various experts will share their ideas on how South Africa can meet this challenge we face as a young democracy. In this instalment, Bobby Godsell looks at how we can use the human potential of our population to create wealth
GETTING more South Africans working is one of the central goals of the National Development Plan released for debate. Most South Africans would agree that unemployment is the central economic, social and political challenge of our times. This is also true of many other societies. To better understand this challenge, we need to consider why work matters and how both society and individual citizens can act in a way that enables many more of our 50 million people to be at work.
Why work matters
Work has always been a central and valuable part of the lives of men and women. From hunter-gatherer societies, to settled agricultural communities, through the industrial age, and now in the knowledge society, the capacity to create value in a way that improves the individual's life circumstance has been central to the human story. Homo Faber - man the maker - is as central to this story as Homo Sapiens - man the knower.
Work is about creating value. The best definition of entrepreneurship is the process of combining resources in new ways to make more. This more, in order to be sustainable, must create goods or services for a customer in a way that brings acceptable benefits to the provider. This, indeed, is what real wealth creation is about.
How do we then achieve a nation of 50 million wealth creators? What is the role of society and of the individual citizen in pursuit of this goal?
The challenge for society
The first step must surely be to see gainful employment as a social, economic and political good, something of value in and of itself. This requires a concept of the market economy which sees people as both a central resource for, and a vital beneficiary of, the marketplace. Markets, like democracy, are made by and for people. It requires a concept of economics in which people are partners in a process of wealth creation, not simply another factor of production such as land and capital.
Companies need, then, to take pride in the gainful employment they create and sustain. Though there may be economic circumstances which require companies to reduce the size of their economic activity in terms of sales, profits and employment, the goal of a wealth-creating company should be to maintain and grow all three of these.
Companies should report on their employment performance as centrally as they do on profits. Perhaps we need a JSE index for the companies that are doing best at maintaining and growing employment. Perhaps the Sunday Times Top Companies rankings need to include employment as a critical parameter.
In the past few decades, a mindset has developed, particularly in Anglo-Saxon capitalism, that has viewed employment in precisely the opposite terms to those described above. As we moved to fund-manager capitalism and a focus on short-term returns, companies that cut costs dramatically were seen as winners. Often the easiest way to cut costs was to reduce employment.
Technology has played a part. From parking garages to self-service in airport check-ins, machines have replaced people. Yet the efficiency gains need to be weighed against the cost in social cohesion.
Responding to both new technology and the investor hunger for quick profit requires a deeper understanding of the wealth-creation process. Here some of the language of those most concerned to promote employment is also unhelpful. In my several decades in business, I have yet to meet a person who has set out to create employment. The central purpose of business is to provide goods or services to customers in a way that generates profit. This requires that the goods or service is provided to the customer at a price greater than its cost. Unless revenue exceeds expenditure, economic activity cannot be sustained.
What our society needs is gainful employment, that economic activity where real value is created - or, to put this even more starkly, where the value created by employment exceeds its cost. No other formula can sustain economic activity. Therefore, society at large needs to be concerned not only that people are at work, but also that they are at work sustainably.
This, in turn, requires a good understanding of how value is created. Let us return to the definition of entrepreneurship: creating value through combining resources in new ways. Doing this is, in fact, at the heart of being human. People can solve problems; machines cannot. People can build relationships that create value; technology itself does not do this. This human potential of 50 million South Africans remains only partially tapped.
South African employees need the space, the tools and the motivation to ensure that each day at work they create more value than they consume. Central to this is to ensure that each worker is both a problem-solver and a relationship-builder.
South Africa has yet to fully deploy the people dividend of the end of apartheid. Race severely distorted the apartheid workplace. Often each job involved two people: one did the work; the other signed the paper. Often this race-contaminated job structure has been maintained simply with a switching of race roles. The knowledge society requires problem-solving, brains and teamwork. A workplace that recognises the knowledge, experience and wisdom of each employee - and, in fact, challenges each worker to work smarter and to build better teams - is what out country needs in the 21st century.
One last word about how society can promote gainful employment. No one arrives in a new job completely ready for action. All new employees, from a manual labourer to a new CEO, need time and help to find their feet, learn the written and unwritten rules of the workplace and become productive. In this context, I simply do not believe that any South African is unemployable.
Business needs to be clear what the critical capacities are of a prospective employee. I suspect that the generic competencies needed are a capacity for critical thinking, an ability to communicate well, and attitudes and behaviours that build strong teams. These are inherent human capacities. Family, school and community will help to prepare a young adult to meet these expectations. Often these tools of wealth creation will need to be honed and developed at work. Business should set itself a goal of a 100% functionally literate and numerate workforce by 2030 or sooner.
And the responsibility of the individual
If these are some of society's employment challenges, what is the responsibility of the individual? Centrally, wealth creation and the gainful employment it supports require active citizens. Jobs will not be delivered to work-seekers by DHL or Fedex, nor by either the ANC or the DA.
Increasingly, the growth in economic activity in developed economies and developing economies alike is occurring in the service sector. Here jobs are seldom life-long. We may well be returning to a pre- industrial pattern of employment, where time-defined contracts or projects become the normal structure of work.
The individual seeking work needs to discover what she or he has or can do that someone else will pay them money for. They need to discover resources they have which can produce goods or services customers want. Opportunities for new products abound. In a time-scarce world, many middle-class people will hire people to do things they used to do for themselves. In an energy-scare time, recycled and renewable resources offer opportunities for new forms of economic activity.
What individuals need to engage is the human capacities and competencies they have which will enable them to create wealth. Of course, education is a process that should be central to these discoveries. Our education system (together with mass education systems worldwide) needs to escape from the prism of industrial society. In our case, school education is designed to prepare students for university. But 12 years of schooling should have much broader consequences. The public service is the country's largest employer. Perhaps we need a public service exam that tests for just those core competencies (critical thinking, language and numeracy, and team skills) that make for a good contemporary public servant.
The individual must actively seek work, confident that there are things she or he can do that add value.
The global economic crisis that began in 2008 defines a new agenda for our world. From Boston to Beijing, we need to find new balances between the demands of economic growth and the need for social cohesion; between competitive, dynamic, economic markets and robust social structure. South Africa can contribute to this new agenda with a strategy for wealth creation that puts human energy, human creativity and human responsibility at the very centre of our economy, society and politics.
- Godsell is the chairman of Business Leadership. He was appointed by President Jacob Zuma to the National Planning Commission in 2010

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