Botswana-born entrepreneurial icon, Rapelang Rabana, says those who ignore the inherent good of business for society run the risk of undermining economic growth as a whole.
“Business is complicated and challenging. Period. And yet on top of the complexities of delivering a product or service the market wants, while getting a company off the ground, new and onerous demands are being made on entrepreneurs.” So says the iconic Forbes-acclaimed Rapelang Rabana, who recently wowed audiences at the SYPALA (Students and Young Professionals African Liberty Academy) conference, co-sponsored by the Atlas Network and Ineng as part of its Entrepreneurs in Public Policy program.
Rabana, in a session at the University of Cape Town, reflected on Ann Bernstein’s award-winning book, The Case for Business in Developing Economies. Rabana argues companies undertaking more than serving their customer places a burden on firms that is a risk to the company’s longer-term viability.
Rabana says first and foremost that expectations to do more than make a sustainable profit, such as meeting other social good and environmental agendas, place ‘burdens on them which undermine their ability to succeed and create jobs’. She also states that, ‘I meet a number of young African entrepreneurs who are passionate about social issues in their communities and heavily influenced by this trend. It is good that they care, but the problem is that they believe that the noble pursuit alone is a basis to build a sustainable organization and they expect to get support from big business and other institutions which creates dependent organizations.’
‘This distracts new and upcoming entrepreneurs from what is really required to run the next big African-based business, leading to a lack of focus that concerns me most. Sustainable organizations are only built by addressing a customer need that the customer is prepared to pay for you, and entrepreneurs must innovate and focus on finding that value proposition,’ she points out.
Rabana says this is what she believes will cost entrepreneurs the most:
“Young and impressionable entrepreneurs emerge with the idea that they must be social first instead of running a viable business first, which is already inherently social. This then sets up a pattern where these ‘entrepreneurs’ seek donor/international funding to support these ventures on the expectation that the nobility of their cause will see them through to success. This is deeply flawed. So my main concern is the misdirection of energies and innovation that this push and global and trend is promoting, which will really come at a great cost to our continent’s development because all the strongest economies in the world have built themselves up through for-profit business growth.”
Bernstein, a South African think tank head argues that business is increasingly being called upon to demonstrate “what more” it does for society in a climate in which companies are frequently painted as social outlaws, as the Atlas Network reports.
“This ill-founded attack has been met, for the most part, by appeasement in corporate circles, giving rise to the burgeoning “corporate social responsibility” industry. Bernstein argues that instead of appeasing their critics, business should develop its own public agenda to promote the benefits of competitive capitalism for the less developed countries of the world.”
Rabana, in considering SMEs in particular, believes calls at international forums for African businesses to deliver more than their fiduciary to their customers and owners ignores the fundamental inherent good in every business. “The growth of businesses that conduct ethical practices and serve their customers must be the sole focus. In this way they create jobs and lift more and more people out of poverty,” she argues. “This is the good that business does – and government and others who get in the way of it, no matter how well-intentioned, should carefully reconsider the effect of their added burdens on the job creators”.
Rabana advises entrepreneurs and their advocates to test all legislation – and declarations on entrepreneurship – against this benchmark and speak up for a focus on genuine business growth.