There are many ways to define what “business” is.
All of us are in some sense involved in business whenever we do something that is intended to earn us a return, either in the form of wages, profits from investment, or less tangible benefits. This is true in every country in the world. But how successful we are depends on the business environment in which we find ourselves. An entrepreneur will make no progress if she can’t find suppliers of the necessary inputs, or staff with the skills she needs to produce her goods or services, or financing to enable her to set up her business. It also matters whether the environment provides the right infrastructure for her to operate and whether there is enforcement of laws so she can rely on agreements with customers and suppliers.
Some of these depend on the rest of the business sector, such as access to finance and suppliers of goods and services. Others, such as most transport infrastructure and law and order, depend on the government. A healthy business environment requires both effective businesses operating in it and an effective government that can help support the environment. Government in turn depends on a healthy business sector that can generate growing tax revenue for government to deliver on its social objectives. Business and government need each other to be as effective as possible.
This report focuses on the social value that the business sector creates in South Africa. The overarching argument is that the existing business sector is an important asset to the country. It is one that generates returns for all South Africans, helping to create the kind of country we want. It creates jobs, provides goods and services, generates wealth and contributes taxes that fund most public services.
It also contributes to a business environment that supports entrepreneurs and produces goods and services that all South Africans can consume. Since the dawn of democracy it has grown in size, changed its racial composition, created millions of jobs and dramatically increased the billions it pays in wages. Its impact is seldom looked at in isolation and appreciated for what it is. This report explains the ways that business affects our society and draws out data to show the quantum of these effects. Business is an asset that makes many things possible in South Africa.
There are also ills. Some businesses have been caught up in corruption including cartels and other illegal activity. We have to constantly be vigilant about corruption. We do, however, have a culture of vigilance. South Africa has a well-developed investment industry that ensures close monitoring of listed companies by analysts and regulators. South Africa’s world-leading corporate governance regulations aim to ensure that our companies have effective boards that strive to guide companies to sustainable activities that deliver for stakeholders. This allows companies to act as instruments for the delivery of returns for shareholders, among other objectives.
Report by Stuart Theobald of Intellidex