Enterprising monopolists can help SA fix problems

PETER Thiel is an interesting character. A founder of PayPal, the first outside investor in Facebook and a multibillionaire Silicon Valley genius, he is the kind of man whose advice should be taken seriously. But when he says that we should not aim to be good competitors but rather seek to be good monopolists, what basis is there for taking him seriously?

At the core of Thiel’s idea is that by encouraging competition as entrepreneurs, businessmen or job seekers, we are trying to get a piece of somebody else’s pie. The best business strategy is to find areas where you don’t have to compete. The real competitive edge is to have no competition.

This is important because, while it may seem somewhat obvious at first glance, the idea goes against the nature of South African development policies and the attitude of the people. We foster an attitude of he who catches up fastest wins. What we really need to be doing is encouraging ways in which individuals and companies can create new branches of the race.

One classic example is literacy. Most would agree that being literate is a basic requirement for being economically successful. I do not. While it makes life easier, it should not be considered a necessity. People who are illiterate should not be made to believe that unless they learn to read and write they have no chance. Instead an attitude of creativity, imagination, experimentation and analysis of all the options available should be encouraged.

Through clever software development, illiterate Masai tribesmen in Kenya are perfectly comfortable managing their internet banking through cellphones. In India, the Koraput model is a form of sustainable farming recently recognised for its contribution to agriculture by Prime Minister Manmohan Singh. The founders of the system are Raita Mudill and Chandra Pradhan, two illiterate residents of the Koraput district in eastern India.

The concept is not that gaining knowledge and skills that help you compete is a worthless venture, but this needs to be one objective on top of an attitude of problemsolving; it is one path, not the path. The core lesson in personal and business development needs to be a drive to leverage what you already have to create your own space for success. Successful people will be those who carve out their own path in the market, whether this is a multibillionaire revolutionising online payment systems, or an unemployed youth in a township asking how he or she can create work instead of joining the masses looking for it.

The spin-off benefits for society are much greater. Monopolies driven by competitive advantage (rather than legal exclusion) result in higher levels of innovation, more small start-ups leading to further job creation, increased knowledge development and greater choice for the consumer.

South Africa faces a tidal wave of economic and social challenges, many of which will take decades to resolve, if ever, by current methods. Encouraging people to compete on the main stage, to run as fast and far as they can, is to encourage them to run in a straight line along with everyone else, and South Africa simply does not have the time or capacity to empower everyone to do that successfully.

If economic wealth and stability are to be reached, each individual needs to reach out and challenge their situation with a simple premise: how can I make it better? And if I cannot make it better due to barriers against traditional means, how can I create other methods with which to do so?