Education and the role of business in shaping society

In May, Asher Bhobot, CEO of EOH talked to the delegates at the JVR ACP People Development in Africa Conference about the role of business in the development of Africa. This article summarises some of the ideas he shared.

It is easy to complain about South Africa, and Africa. We face many challenges, including poverty, unemployment, inequality, and low growth. The South African public education system is not in great shape either. In 2004, roughly one million kids started school. From grade 10 - 12, 50% of these students dropped out of the schooling system. Of the half a million students left, roughly a third failed matric, a third passed, and a third enrolled at university. Of those that were accepted at university, only 30% enrolled in maths and science. Of those 30%, only 50% scored 30% or above. If you multiply these figures, you end up with a very small amount of students qualifying in these critically important fields.

We tend to think that fixing our education system will solve our problems. We are thinking upside down.

To explain this, let us first take a look at the South African economy. Generally speaking, our economy can be divided into three categories: a first-world knowledge economy, a second-world labour intensive economy, and the unemployed. Each category makes up roughly a third of the whole. Our 1st world knowledge economy is truly world-class, and can compete with the best. Our 2nd world ‘labour intensive‘ economy have been under pressure for many years, especially due to cost competition from eastern economies. Of the unemployed sector of our economy, most are young people, who consume and contribute nothing to society. This portion of the economy is mainly sustained by Government grants. If our strategy remains to push students through the system at all costs, into an environment where there are no jobs for them on the other side, they will join the unemployed, and become even more frustrated than their uneducated peers. To create jobs is also not simple, or cheap. To create a job in the labour intensive economy easily costs an organisation between R1m and R2m when you consider all the overheads involved. When the government promises to create 6 million jobs, it is mainly in this labour intensive category of the economy in which the jobs will be created. The intention is good, but whether it is realistic is another question. To put this in context - in the last decade China produced 18m jobs in the 2nd world labour intensive category, and they produced 35m jobs in the first world category. If they can do it, so can we, but we make a mistake to think that it is the responsibility (or within the ability) of government to do it. Only business can create jobs. Only business can invest, build infrastructure, mine, and develop agriculture. Government can either make it easy or difficult to accomplish this.

The strength of business is that it creates what it needs.

Business develops the skills that it needs irrespective of the education system provided by the country. Business fills up gaps left by government (all governments, all over the world). Business creates private schools, hospitals, security etc. If government can’t provide it, it becomes a business opportunity for someone. Can somebody remember the post office? Yet it remains important to move things. Business has filled the gap. The same thing will happen in our energy sector, no doubt. Business can plan, and execute. Business is accountable, creative, and sustainable. Our focus should not begin with the education system, but with building sustainable business. With an increase in business activity, the demand for education is increased - and business will find a way to create what it needs. Business in South Africa is already doing this through learnerships and internships as opposed to relying on the schooling system exclusively. For many, what they do in their specific job, is not learned at school. Yet we ask: “What did you study?”, or “Show me your certificate”. Instead we should look for the right attitudes, ability to learn, and curiosity. These are the characteristics we need from our current and prospective employees - which have nothing to do with school.

“There is no doubt that economic advancement and human well-being have a strong correlation.”

Business in South Africa and Africa needs to be far more forceful in getting government on their side. Business thrives in an environment of de-nationalisation, open markets, and ease of investments. By providing such an environment society as a whole will benefit.