The world is changing fast and to keep up you need local knowledge with global context.
It’s not often I come across writing that is like a work of art. What follows, however, deserves that accolade. Alan Knott-Craig, a chartered accountant by training, has gone through the full roller coaster shared by those who actually create businesses rather than the many who extract rent from them. And with a young family, he also sees South Africa’s challenges for what they are, rather than what those with their cracked rose tinted spectacles would have us believe. This piece – forthright, honest and hopeful – lays out AKC’s stall by sharing his view of what awaits our country after the pandemic is past. Brilliant. Refreshing. Original. Just like we’ve come to expect from him. – Alec Hogg
By Alan Knott-Craig*
There is no doubt that the crisis has caused a rapid and positive shift to the future in the form of online education, tele-medicine and tele-commuting.
It’s the general economy that’s worrying.
As the economic storm clouds darken, it is becoming harder to see the silver lining of the consequences of the Corona Crisis.
Tourist operators, small retailers, restaurants, guesthouses. Zero revenue. Imminent death.
Six months from now, we will walk through shopping centres filled with boarded-up shops.
The survivors will be national chains like Checkers and DisChem. The small shops selling shoes and handbags will disappear.
It won’t be pretty.
Many families will face financial calamity, forced to sell their houses, unable to pay school fees.
Livelihoods will be lost.
Those of us not directly exposed will also be impacted.
We will have fewer options.
Fewer shops to choose from.
Fewer restaurants to eat at.
Fewer airlines to fly on.
Fewer jobs. Definitely fewer jobs.
Blue collar jobs, white collar jobs, all jobs.
In January 2020 many employees would have been quite bolshy, demanding increases and bonuses and looking around for comparable jobs.
By January 2021 most employees will just be grateful to have a salary, keeping their heads down, not complaining and not demanding.
The next few years will bring tough economic times and less freedom of choice.
Take international airlines for example.
By the end of 2020, many airlines will be out of business. Even if international borders re-open, the new sanitisation and social distancing rules, combined with global recession, means fewer passengers and less profits.
Governments will be forced to re-nationalise their country carriers.
The German government has already announced the ‘investment’ of €10bn into Lufthansa. Lufthansa is going back to being state-owned.
There is guaranteed to be a next incarnation of South African Airways, another state-owned carrier.
The alternative is that our country simply has no incoming or outgoing international flights.
That ain’t an option.
Failed airlines will mean rows of abandoned jets on tarmacs around the world.
Sitting there, gathering dust, whilst international flights become less frequent, less friendly and much more expensive.
That is a microcosm of what is happening to many industries.
Tourism, car rentals, restaurants, hotels, hairdressers, personal trainers.
All idle. All going out of business.
That is what tempts the mind and soul toward morbidity and depression.
It is at this low-point that we must remember the entrepreneurs.
Many bad businesses will go under now. The Corona Crisis being the final nail in the coffin.
But many good businesses will also suffer.
Many solid entrepreneurs will go out of business now, through no fault of their own.
They’ll be innocent casualties of war, just like soldiers on a battlefield.
You take a bullet because you’re in the wrong place at the wrong time. Not anyone’s fault, just bad luck.
But those entrepreneurs will still be alive. They’ll still be in the game. They’ll still be willing and able to spot opportunities, take risks, start companies.
Take Safair for example.
It has the best airline management team in South Africa (and therefore probably across the whole of Africa).
When the dust settles and jets are sitting on tarmacs and we’re all depressed because we’re forced to fly with government airlines and pay double the price, the Safair guys will see something that you and I can’t see.
They’ll figure out how to use those abandoned jets and unused airport slots and provide a service that was better than anything we saw before, more professional and more profitable.
They’ll figure out how to turn lemons into lemonade.
Out of the economic storm clouds will emerge cheaper flights and more profitable airlines.
Thanks to the entrepreneurs.
The global crisis is akin to a veld fire.
When the fire is finished the veld will look bare. Like a desert.
It will look as though nothing will ever grow there again.
But fear not.
Out of the soil will sprout green saplings.
Trees that were held back by the old growth will burst forth, and a new forest will grow.
The government and big corporations can do a lot to ensure there is still soil and sunlight, but institutions won’t create the new growth.
Only entrepreneurs can make the trees grow and the flowers bloom.
Entrepreneurs will save the economy.
- Alan Knott-Craig is the executive chairman of Herotel
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.