Arguably the biggest pain point in post-democracy South Africa has been the economic empowerment of the marginalised majority of the country. There are basically two types of economic inequalities: wealth inequality and income inequality. Broad-Based Black Economic Empowerment has been an inadequate legislative response to wealth and income inequality because it places an unhealthy focus on ownership. Wealth doesn’t come from ownership alone; but from the ability to generate cash flows, either through the smart use of assets (owned or rented) or through the sale of that asset to a better owner. The currently marginalised South Africans will only be the best owners of these assets if they have the skills to derive maximum benefit from ownership. Without the skills, any asset transfer made, whether for value or not, results in a deadweight loss to society.
How does skills development benefit economic empowerment?
Skills development benefits economic empowerment through a simple cycle: train an unemployed individual in basic business practice; assist the trained individual to set up a small business; enrol the small business with an incubator programme; and the small business grows, and becomes involved in the training of other unemployed individuals which leads to employment or the restart of the cycle.
What role can your company play in uplifting ordinary black South Africans?
Too many companies focus on BEE compliance and forget about the role they can play in true transformation, helping to change the state of wealth and income inequality. What businesses forget is that through uplifting ordinary black South Africans they can still be compliant.
Let’s look at an example from one of our projects. Our client wanted to make a difference in their community through skills development. We recruited a group of unemployed black women and commenced basic literacy and maths training. Their new-found skills encouraged the group of women to start their own business that ranged from selling fresh produce, cooking and selling meals, making and selling weaved baskets and beaded products, to crafting and selling wood sculptures.
The women however lacked basic business practice skills to grow their enterprises. We recommended our Business Practice NQF learnership, and one year later the group of women could all start seeing small profit margins. One of the women who made and sold beaded products were incorporated in an incubator programme and later became one of my clients preferred providers for beaded products that were used as promotional items. Today this woman runs a business that provides all major corporate gifting suppliers with custom-made beaded products that sits on the desks of executives world-wide. She employs 50 other women from the community to help craft the products that are in such high demand.
The benefits of community upliftment through skills development for your business
What are the benefits of community upliftment through skills development for your business? Your company complies to four elements of the BEE scorecard if you embark on a similar journey as our client did: skills development, socio-economic development, enterprise development, and preferential procurement.
Without being obsessed about compliance, and focussing on true economic empowerment, that ultimately leads to elimination of wealth and income inequality, your business can still become BEE compliant.
For more information call one of our skills development experts on 010 597 7611.