In snowy Davos, every year, big thinkers in business, politics, and civil society gather to pontificate on which way the winds of change are blowing. The verdict this time round? It’s a hurricane out there. But if we heed the warnings, it could help to usher in a better, smarter world.
By Alec Hogg
You didn’t need to spend January at the World Economic Forum in Davos to appreciate how fast the world is changing. But it helped. For those of us there, the message was delivered with the force of a vuvuzela.
The WEF’s annual meeting began with a communist leading the charge to preserve the world’s free enterprise system. And ended with the outgoing Number Two of capitalism’s biggest beneficiary warning us his USA is about to reverse roles with China and climb into a protectionist cave.
In between we got to hear how the Blockchain will transform financial services in the same way that the Internet revolutionised communication. And got an update on important progress in battery storage where costs are now falling fast, promising to close out the final Achilles heel of renewable energy.
Being invited to the annual gathering in Davos is the highlight of my year. It is the place where, consistently, the global agenda is set for the year ahead. This was my 13th successive participation, adding the benefit of the regular visitor who can track broad trends.
So how does WEF 2017 see this year?
What jumped out is the way long-held myths are being tested and discarded. The Davos meeting’s theme was responsive and responsible leadership. Appropriate given so little of it exists around the world right now.
As the Fourth Industrial Revolution takes hold, much of what we used to take for granted is now being disrupted. Politics is the most obvious, with populist leaders sweeping to power by feeding on the public’s distrust of the status quo and growing fears of the uncertain future.
Although the shock election of Donald Trump grabbed most attention, the disruption of the political status quo is not isolated either to the US or that part of life. Business, too, is being turned on its head with a shareholder focus now replaced by the paramountcy of “stakeholders”. The business of business is no longer to make a profit. Its primary goal has become to earn and retain a social licence.
Similarly education. After decades of following its own agenda – and ignoring the market’s needs – colleges and universities face an existential crisis. Having tired of not getting what they need, companies have been building their own in-house training campuses. They are producing thousands of graduates now preferred by companies as they have skills businesses can actually use.
The media, too, is in a crisis of change. The Edelman Trust Barometer, released on the first morning of the annual meeting, delivered a shocking early headline when chairman Richard Edelman described the results as an “implosion” with an astonishing 85% of the respondents no longer fully trusting the system.
Worst performer of the major categories was the media, which recorded a 5 point index plunge (to 43) with over half of those surveyed in 28 countries no longer believing what the mainstream organisations tell them. Most people today believe someone they know more than they do traditional media.
The second big headline to set the Davos 2017 mood was a sensational claim on income inequality by Oxfam’s head, Winnie Byanyima. She was subsequently besieged by journalists, but I did manage to catch up with her towards the end of the event and was rewarded with a feisty discussion that you can listen to on Biznews.
I was surprised by a few things she claimed, including the decision to rebase the comparison that caused such a stir: last year Oxfam said 62 billionaires owned as much as the bottom half – this year the number dropped to just eight. She admitted her intention was to “shock the leaders into action” on income inequality. Objective achieved.
And what of South Africa?
On a superficial level, Davos 2017 was successful for a team SA contingent ably led by Deputy President Cyril Ramaphosa, who was well supported by respected Finance Minister Pravin Gordhan. Cyril thrived in an atmosphere where he was surrounded by like-minded people, moving decisively and happily out of his controversial boss’s shadow.
Ramaphosa showed us why he was Nelson Mandela’s favourite and reminded us that the chairman of the country’s forgotten National Development Plan is very comfortable operating on the global stage. He was cheerful, warm, engaging and articulate. Cyril also participated in half a dozen formal WEF sessions where, unlike President Jacob Zuma, he looked completely at ease.
For someone who has watched Team SA closely for some years, the other distinguishing feature of Davos 2017 was strong cohesion there between business, labour and government. I cannot remember witnessing higher levels of trust between them.
But, sadly, that trust doesn’t extend far enough. Commentary to the Edelman Trust Barometer grouped the country in with other underperformers in a critical category: “In developing markets such as Brazil, Mexico and South Africa, trust in government collapsed in the past four years in the wake of scandals. Trust in government is now as much as 43 points below that of business.” Ouch.
*Alec Hogg is the founder and editor of Biznews.com
Polynesian islanders believe the world can be divided into two types of people. Tree people, who like sitting in the shade and watching the world go by, and Canoe people, who prefer getting into their canoes and seeing what lies beyond the horizon. Which are you, and how do Brexit and Trump fit into the picture?
By Alec Hogg
Funny how one thing develops into the next. A few weeks ago, a friend recommended a movie called What The Bleep Do We Know. It was an introduction to a line of inquiry long overdue for someone who has enjoyed tangible benefits from New Age concepts like mediation.
That movie re-introduced me to the remarkable Joe Dispenza, a chiropractor who was triggered by a personal experience to apply his mind to overcome the physical. The more I read of his work, the deeper the research that followed.
Among Dr Joe’s contributions is how learning new things creates new paths in the infinite potential that is our brains also reaffirming how much there is still for to discover. The more we learn, the more we realise how little we actually know.
Ours is a complex world which we share with billions of other beings, all with the same plumbing and brain capacity as we possess. That’s massive untapped potential. If the reaction of others baffles us, we should first try to hear what they are telling us, rather than reject their opinions as foolish.
The reminder came home with some force through the decision of the British public’s vote to leave the European Union, and for many, the equally surprising election of US President Donald Trump.
With hindsight, though, it’s all pretty logical.
The best explanation I have been exposed to refers to a story told in a book by French author Jean-Claude Guillebaud in which he draws on the distinctions Polynesians draw between mankind’s sedentary and adventurers.
They believe that each of us falls can be categorised as either a “Tree” or “Canoe” person.
The first group are content to remain where they were born and have no interest in knowing whether the grass is greener on another island. They happily live out their lives in the shade of the island’s trees.
Canoe people, on the other hand, are driven by a need to explore. For them, the best use of a tree is to turn it into a boat to transport them to distant places. There they can learn fresh ideas which can be brought back to enhance their own community.
Polynesians respect both streams of humanity. They say a society which only has Tree People would see no fresh influences. With Canoe People only, there would be no more trees and the island become deserted.
For the past few decades, the world has witnessed the ascendancy of Canoe People, the champions of inter-connected societies where globalisation expands wealth and liberalisation of societies breeds greater tolerance for others.
I was intrigued to separately hear Canoe People described as “Davos Man” – the mythical creature personified by those who attend the annual meeting of the World Economic Forum in the Swiss town of that name.
As a veteran of the event, my experience of Davos is that it is the ultimate banquet of brain food. More than half a dozen simultaneous channels give participants access to the world’s brightest thinkers, most forward looking innovators and leaders of its progressive corporations.
The credo of the World Economic Forum is to make the world a better place. But critics see the annual meeting as a Canoe People jamboree where the global elite share and reinforce their ideas and beliefs in an Alpine echo-chamber.
January will be my 14th participation in the annual event, so I’ve seen enough of “Davos Man” to venture an assessment. And it’s clear that despite some valiant attempts to make the event more inclusive, Davos does remain the preserve of the fortunate.
While this highly educated group of global citizens thrives on trying to understand complexities of this speeded up world, recent events suggest they have also made a terrible error.
In his haste to evolve, Davos Man has forgotten to share. Both financially and in terms of knowledge.
It is in Davos that the latest research of inequality is publicised in the forlorn hope that the rich and powerful attendees will do something to address it. Davos is also the place where politicians are exposed to the reality of the rapidly changing world. I have seen quite a few return home with a very different mindset.
But it is one thing to swap ideas on complex issues in a sealed off Swiss Alpine resort. Another thing entirely to engage at a level where it is required.
Not enough effort has been made to engage left-behind “Tree People”. The inevitable has happened. They are tired of having their trees turned into canoes. And are reclaiming their islands.
In the Brexit Referendum, Boris Johnson and Michael Gove tailored their message for Britain’s “Tree People” – evoking emotion around the cost of European bureaucracy, the perceived loss of UK sovereignty and the influx of immigrants.
Against that, the intellectual arguments on the wealth creation of free trade fell flat, so their opponents led by former Prime Minister David Cameron resorted to a self-destructive “Project Fear”.
US President Donald Trump followed an identical line, promising to be the representative of the forgotten masses who believe globalisation has gone too far, immigration is too free and the elite have subverted “We The (Tree) People”.
His opponent’s arrogance in branding Trump and his supporters as intellectual morons backfired spectacularly.
South Africa is witnessing a similar battle between the two branches of society. The challenge for “Canoe People” is to communicate clearly and swallow a dollop of humility. Failure to do so will condemn the country to repeat the mistakes of some continental neighbours. Not least Zimbabwe.
The stakes couldn’t be higher. But for the Canoe People of South Africa, the first step is to appreciate that one should never under-estimate the intelligence of the common folk, and know that provided they are well-informed, they will always do the right thing.
* Alec Hogg is the founder and editor of Biznews.com
A chance meeting at a snowy Swiss resort inspired a sudden shift in South Africa’s economic policy. As always, life’s unexpected paths open up when we least expect them. By Alec Hogg
The game of life has many forks in the road. Sometimes, we get opportunities to make conscious choices. But often things just happen. Things that end up having a massive impact.
At 17, one such event over which I had no influence pushed my life onto a different road. The expected path in lawyering was diverted through a shove into journalism, steering my future into an unexpected direction. One, as it turned out, ideally suited to my skill-set and temperament.
Unknown to many of its citizens, South Africa was the beneficiary of similar good fortune.
It happened in the beginning of 1992 when then President-in-waiting Nelson Mandela was invited along with FW de Klerk and Mangosuthu Buthelezi, to share the podium at the World Economic Forum in Davos, Switzerland.
Mandela arrived at the Alpine resort a devotee of socialism; a believer in economic policies applied so disastrously in the past couple of decades by Venezuela’s Chavez and Argentina’s Kirchners.
Mandela wasn’t shy to tell anyone prepared to listen, that nationalisation topped his economic agenda. If it was South African and moved, he said, the State was going to own it.
Western leaders agued vociferously with Mandela, trying their best to turn him away from that ruinous path. But their logic fell on deaf ears. Even though these policies had caused the economic collapse of the Soviet Union, Mandela – and the ANC – remained steadfast.
Yet when he returned after that week in Switzerland, Mandela had done a complete turnaround. The socialist dogma was replaced by a pragmatic, market-driven approach which served the nation well through the late 1990s and noughties.
His economic transformation came from one of those unexpected forks in the road.
Also on his first visit to Davos that year was one of Mandela’s own heroes, Vietnamese general turned politician Vo Van Kiet. Although he remained a staunch communist, the general was among the first in his nation to realise what worked in politics didn’t translate well economically.
We’ve tried what you are preaching, the Vietnamese Prime Minister told Mandela, and it leads to poverty and pain. Much better to keep political control, but free up the economy, encourage people to build businesses, create wealth and pay taxes. That’s the way to transform our society and uplift the poor.
Van Kiet is remembered as much in Vietnam nowadays for his approach to the economy as he is for soldiering. He is revered as the genius who inspired a system which has led to Vietnamese per capita wealth rising at an incredible compound growth rate of 12.8% a year for the past 22 years.
Sadly, for all the good initial intentions, South African leaders failed to follow through on the sound Vietnamese advice, allowing ideology to divert them somewhat.
As a result, South Africa’s GDP per capita has posted compound growth of just 2.7%. The relative impact has been dramatic. In 1992, the average earnings of a Vietnamese citizen was one 25th of a South African. Today it is one third.
But that would have been so much worse had Vo Van Kiet not been among the lower profile visitors to the 1992 World Economic Forum. Or had the former prisoner’s hero been unable to grab a few invaluable minutes to change the path for Nelson Mandela – and South Africa.
Another new road has opened up for South Africa. This one involves its battle against corruption, that insidious cancer which has been the root of such hardship and poverty in many developing countries.
During his first spell as Finance Minister, from 2009 to 2014, Pravin Gordhan tagged Government procurement as the key area where taxpayer money was being wasted or misappropriated. From inflated contracts for cronies and payments for services not provided through to simple mis-management, State resources were being diverted into the wrong pockets.
Gordhan worked hard at creating a central office to oversee the State’s purchases, but when he was demoted in 2014, his initiative lost momentum. Not as well known is that after his reappointment in the wake of the dramatic developments of December last year, this stalled plan was one of the first things Gordhan focused on.
His appointment of Kenneth Brown as head of the Office of the Chief Procurement Officer (OCPO) is one of those quiet moves that is starting to reverberate loudly. Such is Gordhan’s confidence in Brown, that in the February Budget the reinstated Finance Minister could announce that the nation would avoid a VAT increase Brown’s team would lick in the required R25-billion a year from savings on what the State spends.
A recent update from the OCPO suggests Gordhan’s confidence is well founded. For instance, national and provincial Government spends R10-billion a year on travel and subsistence. But despite pocketing R1-billion in commission, travel agents always charge the State top dollar and never pass on any negotiated discounts.
Another example is phones, where national and provincial Government spends R3.2-billion a year. Brown says a simple consolidation of the account is saving an immediate R400-million a year. Similarly, with the building of new schools, pretty much anything used to go – but now there’s a cap of R35-million on a 4 000 square metre school. And so it continues.
After his demotion in 2014, 66-year-old Pravin Gordhan must have been sorely tempted to swap his suits for a rocking chair. But he hung in there. And Nenegate, over which he had zero influence, threw him onto a different path. That opened the way for a renewed attack on corruption through championing the efforts of a rejuvenated Kenneth Brown.
Life has a funny way of doing that. New avenues open up in the most unexpected ways . Sometimes, as with Pravin Gordhan, it’s a case of simply hanging in there, just showing up. Because we never do know what tomorrow might bring.
* Alec Hogg is the founder and editor of Biznews.com
* The opinions expressed in this piece are the writer’s own and don’t necessarily reflect the views of BrightRock.
In the age before information broke free, few of us would have even heard of Nkandla. Now, whispers grow into roars through the power of social media. Welcome to the Second Renaissance of humanity. By Alec Hogg
One memorable evening during our farming semi-sabbatical, I tumbled onto the meaning of modern life. Well, if not exactly some deeply philosophical meaning, at least an appreciation of what makes our modern wired generation so different to their parents.
Friends from the city were staying over. After a few bottles of wine, as it does, the conversation moved onto weighty subjects. Soon we were debating the most important thing to transform the world.
In polite language, it was a vibrant discussion. And as tends to happen at such emotional times, my wife’s sharp shin kicks were a reminder of a host’s required decorum.
But this time the bruises were happily accepted. Because as my case was argued, it suddenly dawned that everything I’d ever been thinking about this Information Age was true. Things really are different. The world has become a very different place.
Quite simply, it’s because mankind is now differently networked.
When I was growing up, folks phoned each other on their expensive landlines. When pals were far away pals, it was handwritten letters. Even the serious stuff. My in-laws courted that way for two years before moving to the same country.
This forgotten way of life was especially prevalent in smaller towns. There, one’s reality was shaped by books, encyclopaedias, newspapers. People trusted what they got from within local circles. Bank managers, church ministers, a local doctor, accountants, the headmaster – these were the pillars of society.
Those who governed were far away, occupying themselves with stuff too important for the rest of society to reflect over, let alone question. For most of humanity, out of sight really was was out of mind. Life was blinkered, but a lot simpler.
Even after moving to the big city, my own mind only really started opening after reading John Naisbitt’s 1982 masterpiece, Megatrends. The result of a decade’s research, it predicted 10 major changes that would flagpost our collective future. Mostly it explained how free flowing information was about to transform our lives. Preaching the reality that while ignorance feeds stagnation, information stimulates progress.
It was that message that encouraged my dedication to journalism. Until reading Naisbitt, I’d planned to spend a few years as a newspaper reporter to learn about the business world before moving into an area offering potential.
But after Megatrends, it seems I’d fallen into exactly the right place. If information was going to change the world, then surely there could be no better place to be than at its focus hub? That decision sent me onto a never regretted path of lifelong learning. On such small things lives turn.
It has been an amazing few decades. Paul Merson explains the transformation well in his entertaining autobiography “How NOT to be a professional footballer.” Hell-raising Merson reckons were he born 20 years later, his affection for drugs and alcohol would have killed his career before it even began.
Dalliances which in Merson’s heyday remained secret would today become public in minutes, thanks to smart phones and social media. So Merson’s favourite pasttimes, like snorting cocaine off an obliging breast in the back of a London cab, would have terminated his career overnight.
Travails of South Africa’s deeply compromised President Jacob Zuma offer another example of how the world has changed. One of the reasons why the 74-year-old is baffled by the fact that everyone else is so agitated by his antics.
In a different era, the world would never have discovered the overindulgence of Nkandla; known about, much less questioned, Zuma’s close friendship with the Guptas; discovered his dodgy deals with African dictators; or been aware of Zuma’s penchant for trading favours for cash.
Entrepreneurial politicians have been a curse on the public service long before Cicero got decapitated for opposing them in 43BC. But in our age of Twitter, Facebook and Instagram, getting away with devious behaviour is tough.
Take the woman who opened the first crack in the previously impregnable partnership between Zuma and the Guptas.
Deliciously named ANC stalwart Vytjie Mentor spilt the beans about the Gupta role in appointing Zuma’s cabinet when posting an otherwise innocuous reply to a Facebook friend. Only after her comment went viral did Ms Mentor appreciate the relevance of her experience, realising hers wasn’t an isolated example.
Returning to our shin-kicked dinner party, developments like Vygie’s help me believe the bragging rights are mine. Not only has the Information Age transformed the world. But it has also changed our lives very much for the better.
Inverting shows us how.
Imagine that instead of being a Constitutional Democracy, South Africa were governed like its biggest BRICS partner. There is no Facebook in China, nor Google. Every news organisation there, every journalist, is licenced. And all content passes through one of the Government appointed censors in situ in the newsroom. Outside the formal media, any online commentator regarded as even slightly subversive is immediately blocked and often jailed.
To use a recent example, Chinese citizens remain blissfully unaware of the #PanamaPapers, the global scandal sparked by the leak of 11.5m secret client documents from a dodgy law firm. Among those implicated are family members of China’s President Xi. Geddit?
Given our often unappreciated level of freedom, this stuff can be difficult for South Africans to absorb. For all its well documented faults, this is one of a minority of the earth’s inhabitants where a vibrant media applies every ounce of freedom enshrined in the nation’s supreme legal document.
Those who prefer operating in the shadows would love a return to the old world where information was controlled. Life, as mentioned earlier, was a lot simpler. But it was also very unfair. Open societies are complex and challenging. Free flowing information, however, endows huge benefits.
A famous South African export, Oxford University Professor Ian Goldin, is putting the final touches into a new book called The Second Renaissance. His thesis is that the explosion of accessible knowledge has been unleashing human ingenuity on a scale last seen during the original Renaissance.
This time, though, instead of a small pocket in Europe having the lock on creativity, the modern Michelangelo might come from Orange Farm, the new Da Vinci from Vosloorus.
When information flows freely, truth enjoys a deserved premium. Rebalancing the scales of life ensure equal opportunities are available to everyone everywhere. That, surely, is the best way to address the global scourge of inequality where assets owned by just 62 multi billionaires equate the collective wealth of mankind’s poorest 3.5 billion.