There are many reasons to be skeptical about the various competitiveness indices that are published by various organisations – the World Economic Forum, the World Bank, and the subject of this interview, the Institute for Management Development (IMD), which publishes an annual World Competitiveness Report. Often these indices are based on weak data, or highly subjective measures, and what they can really tell us can be quite limited.
That said, the IMD index is one of the better ones, and in this interview, Brand South Africa’s Petrus de Kock takes us through some of the reasons why South Africa has fallen in the rankings over the years, and what the country needs to do to improve its relative position. – FD
ALEC HOGG: Welcome back to Power Lunch. Joining us now to discuss South Africa’s performance in the 2014 Institute for Management Development World Competitiveness Report, is Petrus de Kock, who’s a Research Manager for Brand South Africa.
GUGULETHU MFUPHI: That was a mouthful.
ALEC HOGG: Well, you know, it’s one of the first things they teach you in journalism is keep your sentences short, so the poor guy who has to read it can take a breath. Anyway, we’ve taken a breath. It looks…not too bad, 2014, but then you go back to 2010, and it’s a shocker. Business efficiency: we are 58th in the world today. In 2010, we were 18th, Jeepers, Petrus.
PETRUS DE KOCK: No, it’s a very long title for the report and thank you for inviting us to the show. I think at the high level, we improved with one position this year, from 53 last year to 52 this year. As you indicate, if you look at the longer period in time, there are some indicators that show…
ALEC HOGG: It’s not long, its four years. In four years, we’ve gone from 18 to 58, surely that’s the one you should concentrate on, rather than the one position last year.
PETRUS DE KOCK: Yes, but look, any movement is positive. If we are improving, the question is, what are we doing right? What are the areas that contribute, ultimately, to the bigger national competitive in this picture? I was listening to your earlier inserts and I was just thinking that we are not talking sector performance here. We are talking at a bit of a more abstract level, these kinds of measures of national competitiveness, as the World Economic Forum would also do. Interestingly, in this year’s the Infrastructure Indicator, where we do make a bit of a movement actually, to 55, from 58 last year, and I think that is probably connected to the National Infrastructure Plan. There is some debate to that.
ALEC HOGG: But you’re from here, South Africa. You’re supposed to be saying, “This is a country that is in the top ten in the world”, 58 is not acceptable, not for those of us who think we could do better.
PETRUS DE KOCK: No, but we have to paint a very realistic picture of the country. This is what the numbers are saying to us and this is where we engage for example, through our South African Competitiveness Forum. We engage with business civil society and Government stakeholders to assist us to understand ‘what are the issues that impact on this’ because when we communicate or market the country internationally, we really need to have a good understanding of what are the factors that drive our competitiveness and our reputation.
GUGULETHU MFUPHI: Okay.
PETRUS DE KOCK: So, as you said, the indicators may show a decrease in our performance in these areas, but then the question is, ‘how do we then actively engage with that’ to say, ‘but we really have to look in the mirror’, as a country, and to say, ‘but these are the kind of interventions we need’.
ALEC HOGG: Look at that board over there. It is on the screen at the moment. It doesn’t make good reading. Maybe one year but, generally, if you go back it is the trend that’s important and we were talking earlier, and I’m on your side here, about active citizenry.
GUGULETHU MFUPHI: Yes, which boils down to – now that we’ve got the numbers out and we’ve taken a good look at ourselves in the mirror – how do we fix this situation?
PETRUS DE KOCK: Last year we launched the Inaugural. We had an Inaugural in November, a Competitiveness Forum, and the idea with the Forum is not a typical conflict. Please, no presentations and fatigue in that way. It is more of a workshop style engagement, between ourselves, and a whole range of stakeholders, where we actually put the challenge on the table. When we communicate on the country, when we tell the country story, what is it that we are strong in? We have incredible capabilities in the country. In this year’s program, for example, we’ve got two very dedicated sessions (1) on ‘Global South Africans’, which is, I think, a first for the country, where our stakeholders internationally, South African professionals living abroad, working abroad, who actually, out of their own volition sometimes, who connect South African businesses into Silicon Valley. We’ve got some incredible examples of that, so we want to ask different questions. In terms of when we communicate internationally, do we need to work more with our South African’s globally, in order to link us to actual opportunities? Because the world markets are very dynamic and changing, as you know, so we also need to find new ways of not only relating the country story, but also to create awareness.
GUGULETHU MFUPHI: But Petrus, shouldn’t we also be working on cultivating a working spirit here, in South Africa before the international relations?
PETRUS DE KOCK: Yes, that’s where we start.
ALEC HOGG: Unleash human potential. It’s simple.
PETRUS DE KOCK: Yes, exactly.
ALEC HOGG: Don’t depress it.
PETRUS DE KOCK: Yes, that’s why I mentioned the global South Africans as just one example. In that, same program we have two sessions devoted to the education and one to labour, because I think the debate even on labour in South Africa should probably be broadened. If you think about it, the tax base in South Africa, the salary earners contribute a significant portion to the national purse. Now the reason I mention that is, so blue-collar, white-collar, factory worker, a person who works on the street corner shop, all of those people, actively contribute to the economy. The question is, through active citizenship, which is the principle in the National Development Plan, ‘how do we step out of our comfort zones’ because, clearly, there are issues in the country that we really need to engage on, very directly, in terms of reputation. Secondly, ‘are we treating these things as business as usual or do we need a very radical, new way of looking into these questions?’
ALEC HOGG: You’ve said what I was hoping you would say ‘active citizenry’ and is it just ‘business as usual’. Well, if you have a look at the trend, over a period of time, it shouldn’t be ‘business as usual’ and it should be ‘more active citizens’ and ‘we shall do that’ and ‘we shall always Gugulethu… ‘
GUGULETHU MFUPHI: I’m rolling up my sleeves.
ALEC HOGG: ‘Try and promote the unleashing of human potential, of which we have, in this country, in abundance’. Petrus was saying a little bit earlier, Silicon Valley. The American’s say the greatest entrepreneur they have at the moment is a boy who comes from Pretoria Boys High. Why isn’t he in South Africa, changing the world – Elon Musk? There’s Roelof Botha, who’s one of the top names in Silicon Valley. There’s no lack of potential. It is just allowing it to be unleashed and I hope, with active citizenry, and what Brand South Africa is doing, that shall happen.
GUGULETHU MFUPHI: Well, let’s certainly hope so. We’ll roll up our sleeves and get working but thank you so much to Petrus de Kock for joining us today. Interesting insights Alec?
ALEC HOGG: Of course, there always are and I love what these guys do.
GUGULETHU MFUPHI: Hopefully, we’ve raised those red flags.
ALEC HOGG: Have you seen that video, ‘The Meet South Africa’ video?
GUGULETHU MFUPHI: Yes.
ALEC HOGG: Fantastic. Well done. Whoever put that together at Brand South Africa deserves an Oscar. Maybe we should have our own Oscars at the end of the year, but it’s gone viral and if you’re a South African anywhere in the world, watching that, you’ll want to come home. We will unleash the human potential here. It’s on its way.
GUGULETHU MFUPHI: Indeed, well we leave you on an optimistic outlook of the show today, as we always do so from Alec and myself, it’s goodbye everyone.
ALEC HOGG: Cheerio.
