Is BBB-EE against tech?

There’s a need to reflect about the true nature of diversity in the Tech startup ecosystem, says the writer. File Picture: Pixabay

There’s a need to reflect about the true nature of diversity in the Tech startup ecosystem, says the writer. File Picture: Pixabay

Published Apr 24, 2023


There’s no doubt that technology companies are value creators in society.

On this basis, some seem to believe that they should be exempted from laws that govern society.

In South Africa, there are 2 key developments that have brought this matter to the fore. One being the claim by some that Elon Musk’s Starlink has been blocked in South Africa for refusing to abide by empowerment policies of the country such as BBB-EE.

According to the claimants, Musk and Starlink was refusing to adhere to an expectation for the company to enable 30% local shareholding of a company that would be Starlink (South Africa) to make the service available in South Africa.

The claim in the media creates an impression that the only way to adhere to empowerment expectations is to abide by the ownership requirements.

The truth, however, is that there are many ways with which the companies can comply with the regulations.

A number of technology companies have done so with some reaching the top level (Level 1) without even giving up 30% control.

They have done so by fulfilling other obligations that include skills and other means of addressing imbalances of the past.

Another recent development around technology companies and BBB-EE is the recent announcement by the president that companies with less than 50 employees will be exempted from BBB-EE. This follows pleas by the tech start-up community to be exempt from BBB-EE.

Here we have a potential for a major tech company to contribute towards tech advancement in South Africa and it’s claimed this may be difficult due to BBB-EE.

On the other hand we have companies that will be free from the BBB-EE obligations.

The common denominator here is that there’s an appetite to avoid BBB-EE at all costs.

Part of the reason for this has a lot to do with refusal to share ownership and for some there’s just an attempt to avoid administrative tasks and costs that come with complying with BBB-EE obligations.

Without debating whether the claims about Elon Musk Starlink are true, it’s important to focus on the fact that the tech sector seems to be missing the point about empowerment.

Most people with the ability to think will realise that empowerment regulations are there to address a pain in South Africa.

The inability to implement them correctly should not necessarily give companies a right to disregard them.

Empowerment policies create an opportunity for tech companies to nurture skills and thereby create better conditions for uniquely African innovations.

The insistence on disregarding empowerment policies robs local tech companies an opportunity to be truly unique.

Musk could agree to create a technology university in South Africa as part of a way to adhere to empowerment requirements.

South African tech companies could also commit to conducting a start-up skills initiative to nurture founders from previously disadvantaged communities.

All of these efforts would benefit both companies and communities that were denied opportunities in the past.

Samsung has shown how this can be done and today the South Korean tech has reached level 1 on the BBB-EE scorecard without granting ownership.

What needs to be understood by those who keep painting a negative picture about empowerment policies especially around ownership is that no right-thinking individual wants to always be getting handouts.

Individuals from previously disadvantaged communities are also keen to start their own tech businesses, they also want to build successful start-ups. This cannot happen when funders of tech companies keep the purses closed towards them.

The tech industry also needs to understand that by adhering to empowerment policies in a genuine manner, innovation could flourish. There’s nothing cool about creating a start-up ecosystem that is composed of only a single group of people.

There’s nothing innovative about deploying technology amongst the poorest when they are not given a hand up in the process, especially when it’s done by the richest man in the world.

The tech industry and its leaders need to reflect on the digital divide. There’s also a need to reflect about the true nature of diversity in the start-up ecosystem.

A genuine understanding of causes for these challenges should inspire initiatives that can address these for the advancement of the tech industry in Africa.

* Wesley Diphoko is the Editor-In-Chief of Fast Company (SA) magazine. You can follow him on Twitter via @WesleyDiphoko

** The views expressed here are not necessarily those of IOL or Independent Media.