Pink Slippers and Platinum: Governance Failure and the Decline of Innovation and Entrepreneurship in South Africa

South Africa’s national defence force was once perhaps highly rated; recently it is facing ridicule and concern. Ridicule, as a Lieutenant-Colonel was seen sporting pink slippers with her official uniform in public. According to the UK’s Guardian Newspaper, “It is not an image of top guns defending African skies that is likely to deter would-be foreign invaders”. Concern, as an officer borrowed an air force plane for personal use to visit a friend in neighbouring Botswana.

South Africa’s platinum mines were also once highly rated. Until the Marikana Massacre of 16 August 2012 when the South African Police killed 34 striking workers, apparently shooting many in the back, interfering with evidence after the shootings, and charging the mine workers (the victims) with the deaths of their fellows. While it is the police, and not the mines that are now facing an inquiry, the context of South African mining remains problematic, despite a decade of the longest commodity boom in recent history.

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The Blue Economy: The Only Sustainable Option?

It’s no secret that our Earth is moving towards an environmental catastrophe. Many of us try to effect change locally in our own communities, but more powerful forces are at work. Forces that put economic gain before the health of our planet.

Let’s not lie to ourselves: this Aggressive consumerismbeautiful planet of ours is run by the forces of the market economy. Any business student can blurt out the mantra: you have to compete in the global market, produce at the lowest marginal cost, sell at the maximum possible price, focus on core competences, seek economies of scale, and destroy competitors.

The Chicago School of Economics convinced us that the government should not interfere in this perfect dance of the market. Later, marketing geniuses invented the concepts of Corporate Social Responsibility and the triple bottom line in full cost accounting; all to sell the idea that even a company which destroys moorland and forest reserves can also be good, so long as they give a little to charity.

What’s the end result of these decades of ‘economic growth’? Millions of people leaving their rural communities and moving to city slums, mass unemployment (from Colombia to Morocco), an inequity that hits us daily at every traffic light, a cult of consumerism that has created unprecedented debt, and record-breaking destruction of our natural resources. Are there still people who think this system is working?

There is, however, a new economic model breaking ground in our globalized world: the Blue Economy. Apart from proposing a radical break with the green movement, it provides a completely different perspective on the struggle for sustainability.The great green paradox declares that what is good for us and the environment is very expensive, while what is bad for us and our environment is cheap (think about sodas vs. natural juices).

Under the Blue Economy model, the idea is not to try to reduce or solve pollution after the ecological damage has been done. On the contrary, it aims to redefine the concept of waste via a self-sufficient and dynamic approach. It also aims to prevent the use of materials which can only be used once, including oil.

We’ve already seen many successes from the Blue Economy. From using coffee grounds to grow mushrooms at home (remember that in our morning cup of coffee we use only 0.2% of the actual product); to using hot water, which is normally wasted in beer production, for fish farming; to large crops of algae fed with carbon dioxide, already being generated in megafactories. Experts say this algae could become the ‘super-food’ of the future, thanks to its high content of spirulina (a nutritious high-protein food supplement).

The Blue Economy is based on the power of entrepreneurship and local creativity. It seeks to break the rules we have given the system of global competition, to convert industries considered non-competitive by the standards of the market economy into viable models which preserve our world. This involves the creation of new systems made from existing
resources in our local communities. By changing our concept of waste and resource use as complementary processes, it aims to generate multiple revenue streams which can ensure a low price for what is good, and to deliver what is vital, as free.

I had the opportunity to meet the leader of this movement during a recent trip to Hungary. Although born in Belgium and living in South Africa, this entrepreneurial genius is close to Colombia through some family ties and his work at the world famous Gaviotas Experimental Centre. Find out more about Gunter Pauli and his foundation, sponsored by the United Nations University Institute of Advanced Studies (UNU-IAS) in Tokyo, at www.zeri.org

by Carlos Cadena Gaitán, PhD fellow at Maastricht Graduate School of Governance and UNU-MERIT. First published in El Mundo, 16 July 2012. Image: Flickr / Burtonwood & Holmes. Translated from the Spanish by Howard Hudson.

Keynote Asia: Corporate Social Responsibility and Emerging markets

TOKYO: In early November I received an invitation from the University of Tokyo to give a keynote speech on Corporate Social Responsibility (CSR) and Sustainable Development. Initially I was a bit nervous about delivering a keynote speech; but having a prior acquaintance with Bottom of the Pyramid initiatives in Japan and experience of working with a UNDP project on Growing Inclusive Markets helped to draw relevant lessons and prepare the speech well.

During the symposium, it was interesting to hear the experiences of Japanese public and private actors with regards to CSR and emerging markets. I especially liked Sanyo’s environmental initiatives to introduce safer and cheaper lighting to families living at the bottom of the pyramid. In the Q&A session one could feel the interest of the new generation of young Japanese students in the topic.

The representatives of Japanese firms also expressed their interest in taking CSR to the next level and linking it to core business strategies while enhancing its social impact. With the rise of China and South Korea in emerging markets, Japanese companies need to be more outward-looking and see emerging markets with a different lens. However, both sides admitted that traditional corporate culture and societal trends have yet to adapt to a different and more appropriate approach.

Social responsibility is deeply rooted in the Japanese philosophy of doing business and the country certainly has a competitive advantage in environmental technologies, which can be linked to green innovation for those at the base of the pyramid. However, technological innovations need to be supported by appropriate business models and become socially embedded in the local context. The latter is something that Japanese firms have less experience with. The firms seem to focus too much on their technological skills, while more attention is needed for accompanying soft/social skills, for example developing human capital and local ties to make innovations locally embedded in emerging markets and BoP.

In my keynote speech I argued that CSR can be linked with Inclusive business approaches to develop a socially inclusive innovation that caters to sustainable development in the South and benefits companies’ long-term growth. During the stay in Tokyo I also conducted interviews with representatives of the Japanese Ministry of Foreign Affairs and the Japan International Cooperation Agency about new policies for linking private sector innovation with development initiatives.

Shuan SadreGhazi, PhD Fellow, UNU-MERIT