Podcast transcript

Read the full transcript of the Business out of the Ordinary panel discussion at Business is an Adventure.

• RT: Redi Tlhabi
• RB: Sir Richard Branson
• SK: Stephen Koseff

• 00:00: Intro

  Redi Tlhabi:  Everywhere I go in platforms such as these I meet people who are optimistic, people who want to do their best, people who want to build our country, people want to build our world? You said earlier that our president is being frustrated as opposed or delayed by his party. I know that but I also think how much longer then can the rest of us wait as they sort out their own politics while our economy gets to its knees. I feel…

   

  Richard Branson: Welcome to Britain, America... Italy...Portugal... And that's why businesspeople have got to step in.

   

  Narrator: That was Virgin founder Sir Richard Branson talking to journalist and broadcaster Redi Tlhabi on why, when it comes to riding a political and economic rollercoaster, South Africa is not alone.

   

  The two were joined on a panel by Investec co-founder, Stephen Koseff at the recent Virgin Atlantic Business is an Adventure event, held in partnership with Investec in Johannesburg.

   

  The event brings together a diverse panel of speakers from Takealot’s Kim Reid to futurist Faith Popcorn, to share their insights into entrepreneurship, building a brand and what the future of business looks like.

   

  In the first podcast of our Business is an Adventure series, founder of sme.africa Marnus Broodryk spoke to Sir Branson about the secrets to his entrepreneurial success and asked him to share some of his ideas around tackling youth unemployment in South Africa and preparing for a new business paradigm in a digital world.

   

  In today’s podcast, Sir Branson offers a global perspective on South Africa’s political, social and economic challenges and discusses the bold steps he is taking to help tackle climate change.

   

  Stephen Koseff shares his candid views on what President Ramaphosa needs to do to get South Africa back on track and why he believes it cannot be done without a strong public-private partnership.

• 01:54: The cost of the “Zupta Era”

  RT: This is Virgin Atlantic's business is an adventure in proud partnership with Investec. And right now we are turning our attention to tomorrow, the future. No one can know what tomorrow holds, but if there were ever two men, I think, who might have some insight, some idea of what the future might bring, it would be these two.

   

  Let's welcome co-founder and former CEO of Investec Stephen Koseff. Okay, so of course and we still with the chairman of Virgin Group Sir Richard Branson. 

   

  RB:  That's good to know.

   

  RT:  Stephen. I'm going to pick on you. We know that our national debt is what, three trillion rands, and it will be four point five trillion by 2020. We got the youth unemployment figures of 58% sometime last year, economic growth 0.5 for 2019. I mean, what is the case for optimism in this part of the world?

   

  Stephen Koseff:  I think optimism is important. If you're a pessimist then you can just lie down and die, and you know, I'm not that kind of person, I'm a glass half-full person and I think that what we perhaps didn't factor in when we had Ramaphoria was the kind of devastation that took place. 

   

  Now, I want to give you a few numbers.  The GDP cost of, and I'll use a generic term, the “Zupta Era” to South Africa… So if we grew by what we are growing at, pre the crisis, which is four point something percent, we would have had an extra R1.3 trillion of GDP today, and when Tito would have been talking about his medium term budget, we will be looking at ratings upgrades because for every rand of GDP you get 28% tax roughly, so they would have had in excess of R300 billion of additional revenue. 

   

  Now, I accept the fact that the growth must be inclusive in a society like ours, but if we had a growth economy we would not be sitting here sulking, we would be out there trying to, you know, benefit from the growth. So, if you took that extra R300 billion, you would have had debt to GDP at 30%.  You would have unemployment probably at 16%, and you would have had a totally different country. We would have had made a lot of progress.

   

  So, to me, you know, you ask the question. Why are we still stuck? Well, I know at Investec if we had a division that went haywire and went on the wrong road, you don't fix it in a year. It takes a while to get it back on track after taking some very tough decisions. Now, the uncle needs to take a few tough decisions. He's held back by his party and, in particular, the left of his party.

   

  And unless he takes tough decisions, and the first thing, you know, I've been saying now for months, number one, you fix Eskom.  Now it took them a long time to come out with their plan. The plan is there, now execute it. And you have to bring private capital in, you can't put that whole burden on the government balance sheet. We can't afford it. Now they hate the word privatisation - use any word, don't call it privatisation, call it public private partnerships, call it anything, but just do it.

• 04:57: An honest president

  RT: I ended our last conversation on building leaders that say “Screw it, Let's do it”. So, with that that theme and with the problems that Stephen has just articulated, how do you manoeuvre as a business leader in a climate like that where there all sorts of blockages?  What has been your experience?

   

  RB:  I think there are companies like Investec that do care about the society. There's an awful lot of companies in South Africa that don't care about the society and they just say well that's the government's job. It's not our job.

   

  And I think the second thing is, it does take time to transform a country and 15 months is an impossibility. I think the most important thing that you have about this new government is a leader who's honest. And if you don't have a leader who's honest, it just ricochets all the way down through society - the police force, the customs officers, everybody becomes dishonest.

   

  And so, he's had to move this big ship around and into a different direction. It's tough, but I wish him well and feel a lot more confident investing in South Africa with him at the helm, than the previous group. 

• 06:00: The need for a business-friendly environment

  RT: So, Stephen, everywhere I go in platforms such as these I meet people who are optimistic, people who want to do their best, people who want to build our country, people want to build our world? You said earlier that our president is being frustrated as opposed or delayed by his party. I know that but I also think how much longer then can the rest of us wait, as they sort out their own politics while our economy gets to its knees. I feel…

   

  RB: Welcome to Britain, America... Italy...Portugal... And that's why that is honestly that's why business people have got to step in.. 

   

  RT:  And that's exactly what my question is because we don't want our country to collapse. We still have to have a country standing long after the politicians have gone. So, let's leave them for just one second. What do you say to people in this room to encourage economic growth despite the politics that we can't fix immediately now?

   

  SK:  Okay. So, these guys, these people in the room, my understanding is they all run businesses. So, they're all leaders and leaders have to give people hope, you can't walk around being miserable and complaining and you also have to be proactive in society. I heard Richard talk about, you know, put a circle around the environment you operate in and help uplift people and through that intervention you start to get growth. Obviously, we need an enabling environment and we need a government that is business friendly. 

   

  So, it needs a difference in attitude from business to say, you know, this is our country. We can make a difference; we can help this country grow. Yes, we need an enabling environment and the government mustn't do stupid things which they can tend to do, like with the VISA regime and all those kinds of things.

   

  He's promised us that he's going to be much more business friendly and we need that to happen. But at the same time, you know, why wait? Just pick up the ball and run with it.  You know, 18 months ago, if you said South African would win the World Cup people would have laughed at you.

   

  They change the leadership; they had a very competitive team across the spectrum. It was well represented by people from different backgrounds and because we were a team, because we worked together as a team, we won the World Cup against odds. So we as a society need to work as a together as a team. We can't moan about this and about that, just get going. 

• 08:22: How business can help government

  RT:  Okay, Richard, you're nodding?

   

  RB: I mean, I think we need to think what is a government?  A government is a group of people generally, who are only likely to be in that job for a year or two. And so they need help.  Now businesspeople can be around for a long time, hopefully, a very long time, and they are also quite entrepreneurially minded. So, I think it's not just helping in the community that's important for businesspeople. That's very important. But the other thing is to help governments.

   

  So, climate change to, you know, take as an example. We sat down with a small group of entrepreneurs and we just brainstormed, if we were in government, what would we do to whip climate change which won't bankrupt our country and I think I've come up with ideas that that can actually maybe sort out climate change.

   

  And we're now going to Cyril Ramaphosa, to talk; obviously not Donald Trump, but he's got one or two people around him we could maybe talk to - and give them an opportunity to be the heroes in putting what I think is quite a good idea into practice to try to whip climate change. 

• 09:23: Reimagining education

  RT:  Stephen, what are your concerns about our youth at the moment? How, given all the problems that we've all been talking about, how we can still invest in young people?

   

  SK:  Well, if we if we don't do that we're going to fail as a society. I mean the first challenge is the schooling system. So they were talking about maths and science when I was listening and watching the TV at the back and Investec runs a programme called Promaths, which takes kids out of township schools and does an intervention from a Friday to a Sunday and all of a sudden these kids from
  failing dismally are getting A's for matric, B's and C's as opposed to failing. 

   

  Last year we had out of the 1,200 kids that did matric. Out of our 1200, 360 got A's.  They then go on to do, you know Actuarial Science, Finance. All these things that 90% of the people probably aren't that good at, but you can, with an intervention...

   

  RT:   You okay? Look what you're starting now...

   

  SK:  We don't need that. But if you’re an everyday human being - not everyone's Richard and not everyone's very entrepreneurial - then you need to up your education. So we need to fix that. We need to actually change the education system.

   

  Someone suggested that we should just give everyone a grant and let the private sector run with the ball and it's more than 20 grand a pop hey that the government's been an education doing a bad job, and some of these private schools can do quite a good job for 20 grand.  And you create a whole business and employ a lot of good teachers.

   

  Those are things that we have to fix. What we're trying to do on YES [Youth Employment Service], is get the jobs inside the environment inside the villages, inside the townships, so they don't have to spend 40 percent of their salary travelling. Try and create an ecosystem in the environment.

   

  RT:  Richard? 

   

  RB:  We've stopped asking people who're coming for a job at Virgin Group for their exam results. We don't want to know their school exam results. We don't want to know their University exam results. We'll do an in-depth interview, they'll send a video in, we'll find out about their life skills, etc. etc.

   

  But my feeling is that there are people are good at learning facts at school and there are people who are not.  The people who are already good at learning facts, maybe at ten percent and the other 90% are not necessarily good at learning facts, it doesn't mean that they're going to be the better employee.

   

  And I mean our feeling at Virgin Group is that if every company stopped asking people for exam results, then schools would have to reinvent themselves. They would have to turn people into human beings and look for the all the other areas.

• 12:01: A solution for climate change

  RT:  Okay, I do have a final question about what the future looks like. But Richard I can't let you get off the stage without talking about climate change.

   

  And I'm watching the US Presidential race and all these debates and sometimes after two hours not a single candidate has been asked about climate change and sustainability, really, it's not that something that is out there. It's the biggest risk to mankind. How should businesses adapt to that?   

   

  RB:  Okay. Well, very briefly, the idea that I was talking about that we want to, we're putting the government, is that every business every business has a carbon footprint and now taxing businesses for its carbon footprint has not worked. 

   

  The Australian government fell when they tried to bring a big tax in on carbon. In France there were massive riots in the street and so on. So, you know, how can we resolve this problem without taxing carbon?

   

  Anyway, our idea is quite simple and that is, that we work out our carbon footprint and governments say that based on your carbon footprint, a percentage of your turnover, or your profits, and we're refining it at the moment, must be invested in clean energy. 

   

  Now, we're not taking your money, and this is the government speaking, we're not taking your money and losing it in the government coffers, you're able to invest this in solar, in wind, in Memphis Meats, which is a new alternative to, eating beef etc. Beyond Meat, you know, planting forests. But you can also make profits from it and you can get dividends from it.

   

  And if every company in Britain did it, you would have billions and billions and billions going into clean energy which speed up the whole process really fast. And it seems to be a win-win for everybody because from the public's point of view, if you've got more clean energy than dirty energy, the prices are going to come down, and they'll stay down forever. That's the lovely thing about the sun and the wind.

   

  You know, the government's benefit, because they’re actually whipping climate change and they're not taxing people heavily and companies benefit because they can actually get their money back. Anyway, that's our entrepreneurial idea that we're trying to push through. 

• 13:56: Conclusion

  Narrator: Thank you for listening to this Investec Focus Talk podcast. If you enjoyed this conversation, please take the time to rate us and subscribe to our channel wherever you get your podcasts. And stay tuned for more inspirational content from Business is an Adventure including fascinating insights on how diversity can build business advantage, the imperative to reimagine education and what it takes to succeed as an entrepreneur in today’s turbulent economy. Find out more at investec.com/BIAA