The problems faced by South Africa are not unique. Every country in the World is presently grappling with the demons of job creation, kick-starting flagging industries against a backdrop of stalled consumer demand, so it can help us to understand how others see the problems and what solutions their brightest and ablest minds see as helping to overcome the present malaise.

A summit, set up to examine ways of making that country’s economy more efficient in a fiercely competitive global environment, organised by the Times newspaper in Britain has just ended, and it came up with not one recommendation but many. So what lessons can we here in South Africa glean from this?

Lesson one was that it was reassuring to know that there is no shortage of ambition or confidence in British business. It is clear that many firms have already put their own houses in order since the financial crisis; that there is cash looking for investment opportunities; and that there is optimism about opportunities at home and abroad. I suspect the same situation pertains here, but that one factor holding back business investment is the mixed-message signals emanating from Government.

The list of proposals from Britain’s business leaders being submitted to Downing Street today — contained in the summit letter to the Chancellor — makes it clear that the Government can do much more if it wants to get serious about growth. This is less a call for industrial policy resembling the corporatist rescues of failing companies in the 1970s, think British Leyland, but rather, about creating the supply-side conditions for expanding output and employment, focusing on a handful of growth sectors. These are the sectors where Britain perceives it has comparative strengths and advantage.

We clearly can do the same; our strengths and advantages should be our financial sector, our mining sector and our geographic advantage in being the gateway to sub-Saharan Africa.

One of the clear enunciated goals is that growth should be a clear part of the mandate of every regulator, and sphere of government interfacing to business, and warned of the acute danger of “regulatory fatigue” and stressing the need for the politicians to drive a “pro-growth, pro-business” message through the plethora of government bureaucracy.

All chief executives stressed the need for that emphasis on growth to reach those in local government as much as, if not more than, those in central government.

The need for many Government, ANC and ANC affiliates here to get “on-message” on the importance of business and stop business bashing and both embrace and understand that the success of business underpins our whole economy is abundantly clear.

Another expressed area of major concern was the need to improve human capital; and clearly the need here is even more paramount, coming off a much lower base.

Another of the concrete proposals was the need for a huge jump in the numbers of apprentices — 60 per cent — educated to NVQ level 3 in those skills, and recognising that an engineer is not just a man with an oily rag, but is, in fact, a potential entrepreneur who could build the next Google, Microsoft or Apple in this country. The thinking behind our SETAS needs a radical, not politicised and practically-orientated re-appraisal, such that the skills demanded from our mining, engineering and business sectors can to the future be met. This will also require a re-appraisal of the curricula at school level and the recognition that no stigma attaches to those for whom a more practical, rather than academic approach to life skills is more appropriate.

The summit stressed that the financial sector and banks is not the problem but rather is essential to the solution, and that blaming banks for the crisis was not helpful or accurate. Rather, across the political and business spectrum, there was support for a strong financial services sector and a swift end to the regulatory uncertainty in banking.

There was a desire for the Government to be more flexible on letting firms hire the people they need. In particular it was argued that taking on one semiconductor expert from, say, South Korea means not the loss of one British semiconductor expert but the potential creation of 500 jobs. It was proposed abolishing employment tribunals that make it harder to part company with an employee than to divorce a spouse, and the introduction of a “no fault” concept in employment law similar to “no fault” divorce.

Lord Mandelson, the former Labour Business Secretary, made the case most forcefully for the quick repeal of the 50 per cent rate of tax, with many pressing for further reductions in corporation tax and a government-wide effort to make Britain the most tax-competitive country in the G8.

There was a wish, too, to see government get behind a few big infrastructure projects, for instance plans for a new international airport in the Thames Estuary and a high-speed motorway between Oxford and Cambridge to create a corridor of entrepreneurs in high-tech industries.

Woven through the day’s discussions was a significant change in thinking, and to stop being so “shy” about developing an industrial policy, and that faith that “the market will sort it out” is not enough.

Business leaders continually cited the fierce competition from countries that have national strategies to focus resources on growth sectors, through tax breaks and other means, and Asian countries in particular were frequently described as having a much longer-term investment perspective.

One of the biggest brakes on business confidence is the absence of clarity from government in areas such as energy and infrastructure.

Many leaders said that it was time for government to take a long-term commitment to our strongest sectors and those with most potential, including the financial services industry, high-value manufacturing, pharmaceuticals, 4G telecoms, digital media and, potentially, education and aviation, and that this would require the Prime Minister to take on the institutional objection to this kind of thinking within the Treasury. It involves risk, it will include some failures and it involves politicians looking to the long term with bold ambitions for Britain. If the Government is serious about growth, it is time for a new industrial policy fit for the 21st century.

The over-arching principle is that economic and business success underpins all facets of life; that without a strong, long-term successful and vibrant economy, none of the “nice to have” social objectives such as the National Health are possible without funding, and that Government thus needs to put business and the economy right in the centre of all their thinking.

None of this is rocket science; yet there is much wisdom to be garnered for our country, South Africa, in a careful reading of, and implementation of many of these guiding principles.

Surely we are not too proud to learn lessons from others?

Tags: #, #ANC, #British, #Downing Street, #SETAS, #South Africa, #South Korea, #Times