There’s not much sign of what John Maynard Keynes famously referred to as the “animal spirits” of business in PwC’s latest survey of global chief executives.
In general from their responses these 1 344 chief executives seem a tentative and nervous bunch of people and, in the South African context, are paralysed by what can be described as an overwhelming sense of “external locus of control”.
Keynes reckoned that in the face of deep uncertainty only a manic, driven, strong-willed person – that is, someone propelled by animal spirits – would put capital at risk. In the early part of the 21st century there appears to be not a whiff of “animal spirits” about, which of course means we could be waiting a very long time for the sort of economic growth needed to reduce unemployment.
UK-based commentator Andrew Smithers believes these animal spirits have been dulled by an excessively rich diet of executive remuneration.
Who would bother going out to hunt for lucrative rewards when they are almost automatically poured into your lap? This is essentially the predominant and utterly depressing thesis of Smithers’ excellent new book, The Road to Recovery.
The problem seems to be that because the world is changing so rapidly chief executives don’t really know what’s coming around the corner, but whatever it is it’s probably going to be scary.
The majority can’t plan much beyond three years and their human resources departments are often not adequately equipped for future needs.
This, of course, may be why there is so much unemployment while at the same time companies are whinging about skills shortages. In South Africa, this disconnect is blamed on the government because, as business sees it, it is a government responsibility to provide a skilled labour force.
In South Africa chief executives seem to believe it is the government’s responsibility to do almost everything, which is obviously why business is quite satisfied with its own performance but deeply disappointed with the government’s. page 20
Technology
A new study published yesterday has suggested that the government could generate $14.3 billion (R153bn) over the next decade without having to further squeeze the small base of taxpayers.
The secret to this achievement lies in the adoption of technology and buy-in into a paradigm identified as “the Internet of Everything”. The embrace of this concept could yield savings, improve employee productivity and generate new revenues, according to the Cisco Systems report.
The Internet of Things is a term coined by Kevin Ashton, a British technology pioneer, in 1999. Ashton is a joint founder of the Auto ID Center at the Massachusetts Institute of Technology in the US. The term refers to a network of physical objects that contain embedded technology to communicate or sense or interact with their internal states or external environment, according to Gartner, an international technology consulting firm.
Gartner projects the Internet of Things will grow to an installed base of 26 billion devices by 2020 from 900 million in 2009, and this excludes information and communication technology devices such as personal computers, tablets and smartphones. Global revenues from provision of services related to the Internet of Things is expected to exceed $300bn by 2020.
In South Africa, the state could realise R131bn by the model in areas such as employing a smart grid, cyber security, travel and mobile collaboration at municipal level. At citizen level initiatives such as better payment systems, anti-counterfeit drug programmes, chronic disease management and smart street lighting could produce savings of R21bn.
The report, “Internet of Everything: A $4.6 Trillion Public-Sector Opportunity”, builds on research published by Cisco in February last year.
Wine festival
The annual Stellenbosch wine festival is due to start tomorrow, with wine estates open to the public often providing additional attractions such as horse riding, and with hotels and restaurants taking part.
There were fears that it would be the last allowed to take place as a result of planned new legislation banning alcohol advertising in this country, the details of which have not yet been released.
Annareth Bolton, the chief executive of the Stellenbosch Wine Route, the largest and first to be launched, was particularly despondent, fearing that the festival could not be advertised in future and tourism would dry up.
But the mood of the town has changed with the realisation that advertising the festival based on the fact that Stellenbosch is the oldest country-town in South Africa, without mentioning wine, could still be used to attract visitors, while international bloggers can make the connection.
In conjunction with Stellenbosch 360 – the new name of Stellenbosch Tourism – the wine route is now aiming at international recognition by taking a stand at the Berlin ITB in March followed by another at South Africa’s Tourism Indaba in Durban in May. Legislation in the US already bans advertising wine. But interest in wine has grown there, particularly among young people, as a result of blogs written on the subject and the South African wine industry had already begun to work with bloggers before the proposed advertising ban in this country was mentioned.
According to Western Cape Business there are more than 3 500 wine producers in this country as a whole and the industry’s contribution to regional gross domestic product is estimated to have been R26.2 billion last year.
Direct spend by foreign tourists was R18.5bn last year, up from R18.2bn in 2012. The ban on advertising wine is likely to hit the advertising industry and print media more than wine consumption.
Edited by Peter DeIonno. With contributions from Ann Crotty, Asha Speckman and Audrey D’Angelo.