Tech­nol­ogy can re­verse eco­nomic hard­ship

CityPress - - Business - Muzi Kuzwayo busi­ness@city­ Kuzwayo is the founder of Ig­ni­tive, an ad­ver­tis­ing agency

More than 40 years ago, the fa­ther of lok­shin drama, Bra Gib­son Kente, wrote a mu­si­cal called How Long, which was first pro­duced in Soweto in De­cem­ber 1973.

When I saw it, I was too young to un­der­stand what was go­ing on – there was lots of singing, an ex­cited crowd and, be­cause it was late at night, I was fall­ing asleep in those un­com­fort­able chairs. De­spite my age, the ques­tion re­mained in my mind.

Now I won­der how long African coun­tries will be price-tak­ers when they are ma­jor pro­duc­ers of pre­cious com­modi­ties.

Even though we like to believe we have a so­phis­ti­cated econ­omy, we’ve failed to pro­duce a lo­cal metal ex­change where prices are not con­trolled by our for­mer colo­nial rulers.

Al­though South Africa has been a ma­jor gold pro­ducer, we’ve failed to create in­ter­na­tional jew­ellery brands, mak­ing us per­ma­nent pric­etak­ers.

Like­wise, the Ivory Coast is one of the world’s largest pro­duc­ers and ex­porters of co­coa beans, yet the coun­try does not have a strong global brand of choco­late.

It’s also one of the top pro­duc­ers of cof­fee, but has no global brand for the bev­er­age.

When weather con­di­tions be­come hos­tile, the crop fails and the econ­omy fal­ters.

The sit­u­a­tion in the world’s second-largest pro­ducer of co­coa, Ghana, is get­ting pro­gres­sively worse.

Ac­cord­ing to Bloomberg, co­coa buy­ers are strug­gling to pay farm­ers be­cause the coun­try’s reg­u­la­tor – the Ghana Co­coa Board – is fail­ing to pay them for the co­coa beans that have al­ready been de­liv­ered.

This is the be­gin­ning of a down­ward spi­ral be­cause, nat­u­rally, the farm­ers will fail to pay for their seeds, and there may be a short­fall for years to come.

For­tu­nately, tech­nol­ogy is giv­ing us a chance to cor­rect the sins of our fore­bears.

First, it is dis­em­pow­er­ing the car­tels that have had a stran­gle­hold on dis­tri­bu­tion chan­nels.

In the US, the heart of cap­i­tal­ism, the walls of malls are start­ing to crum­ble. For years now, high-rise build­ings in Johannesburg have been hell­holes run by mice and wild cats.

Even as new sky­scrapers rise in Sand­ton, many of­fice blocks stand empty. Land­lords are reel­ing as the fun­da­men­tals of in­dus­trial-age cap­i­tal­ism start to de­com­pose. Busi­ness is fast mov­ing to the cloud.

Al­ready, some savvy en­trepreneurs have moved their busi­ness to so­cial me­dia, which re­duces op­er­a­tional costs.

There’s no need for so­phis­ti­cated and ex­pen­sive e-com­merce sys­tems – you see the ad on Face­book or In­sta­gram, make a de­posit into a bank ac­count and your pur­chase is dis­patched and then de­liv­ered by a courier.

Some of th­ese ven­dors do their busi­ness out of their flats. Their prod­ucts are made to or­der, so they do not need to shoul­der the cost of ex­pen­sive of­fice and ware­house space, nor deal with long-term leases.

Only a fool will laugh at a spark. While us­ing so­cial me­dia may be rudi­men­tary e-com­merce, it is to be lauded be­cause it is a start.

As th­ese busi­nesses make money, and as the cost of do­ing busi­ness on the cloud be­comes more af­ford­able, their own­ers will in­vest in bet­ter sys­tems that will give them greater in­sight into their cus­tomers. They will know which prod­ucts are bet­ter sell­ers and who their most valu­able cus­tomers are. They will also know how to mar­ket their prod­ucts bet­ter.

Tech­nol­ogy is a great lev­eller. Do not rush off to sign on for gov­ern­ment’s benev­o­lent Black In­dus­tri­al­ists Pro­gramme.

The world is chang­ing rapidly, and buying a BEE stake could come back to sting you as white share­hold­ers exit for greener, more prof­itable pas­tures, leav­ing you with long-term debt to be funded by com­pa­nies that are go­ing bank­rupt.

Tech­nol­ogy may well be the true ve­hi­cle for long-term eco­nomic em­pow­er­ment.

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