The man to Jack up Cyril’s ideas about business
While Ramaphosa tries to pull SA out of the toilet, he could pick up some pointers from Asia's richest man
It’s a pity President Cyril Ramaphosa didn’t make his scheduled address at a United Nations conference this month because he could have heard Alibaba founder Jack Ma give a master class on entrepreneurship.
Asia’s richest man was in SA in August to launch a $10m fund for entrepreneurs in Africa, the Jack Ma Foundation “Netpreneur” Prize. It will fund 100 young African entrepreneurs for 10 years, hoping to empower “a new generation of entrepreneurs, and focusing on small-business growth, grassroots innovation and women founders”.
It was announced at the Netpreneurs: The Rise of Africa’s Digital Lions conference, organised by the UN Conference on Trade and Development (UNCTAD), the Alibaba Business School and the Jack Ma Foundation.When Ma took the stage at the packed Linder Auditorium in Johannesburg he was given a rousing welcome by an audience that included many young entrepreneurs and start-ups.
The story of Alibaba’s improbable success and Ma’s rags-to-riches story are now legendary, especially in the start-up world. With no resources and working from his apartment, along with 17 co-founders, he launched an internet company that is now among the top 10 in the world.
It’s a striking example of hard work and forward thinking, to create what is among the biggest e-commerce businesses in the world and one of the world’s top-10 most-valuable companies. After listing in 2014, Alibaba’s current market cap is $542bn. In 2017, the total gross merchandise volume on its China retail marketplaces was $768bn, according to its figures.
Ma is now an icon of entrepreneurial success and is feted around the world.
Instead, Ramaphosa is still putting out fires caused by his predecessor, whose nine-year kleptocratic reign left SA’s economy in the toilet. His interaction was reduced to a meet-and-greet, about which he tweeted: “We exchanged views & had a good discussion on the global economy & prospects for investment in South Africa.”Ma understands adversity and how to overcome it. Ramaphosa could have done well to hear these things, as he tries to kickstart two key things every country now needs: a thriving small business sector (where entrepreneurs generally emerge) and stimulating the internet (where even more entrepreneurs are emerging).
“It’s very important for Africa to create jobs. The best way to create jobs is to encourage small business, to encourage young people,” Ma said.
With employment rising to 27.2% in SA, increasing job growth is going to come from small business, as it does the world over. With the moribund mining sector shedding jobs and the government’s lack of coherent vision to grow the economy and reduce unemployment, Rampahosa could do with a few pointers from a man whose business does $768bn worth of business in China.
“If there are more entrepreneurs who start more business, then they will [create] more jobs. Governments should encourage entrepreneurs,” Ma said.To do this the government should give “good tax conditions to the start-ups. Big companies don’t need that. We start-ups need that,” he said.
In the room were entrepreneurs from around the continent, including 52 young Africans who Ma has already been mentoring through his eFounders Fellowship and have been to Alibaba’s home town of Hangzhou.
In an exclusive interview afterwards, he added that the government ought to champion the growth of the internet and the surge of economic activity it enables.
“We are entering a digital period. Governments should focus on the infrastructure for internet broadband, mobile payment and logistics,” he told Business Day.
His argument was echoed by UNCTAD secretary-general Dr Mukhisa Kituyi, who told the conference: “The digital divide is our political responsibility first.”
He said African governments across the continent needed to reduce regulations to starting new businesses and adopt policies for this new digital era. “Most governments haven’t implemented policies for e-commerce. Africa is still the dark continent when it comes to e-commerce,” said Kituyi, who was Kenya’s trade and industry minister from 2002 to 2007.Ma was famously turned down for 30 jobs he applied for, including at KFC, and was refused entry by several universities. Instead, a trip to the US where an internet search for “beer” that yielded no results for China, convinced him he could replicate the internet’s opportunities for business in his own country.
“China was not connected [to the internet] the day I started my company,” he said when he opened his first business in 1994, which had the word “internet” in it but at the time there was “no such word in the dictionary”.
China also lacked financial infrastructure like credit cards and payments systems, he said, but stressed: “Entrepreneurs do the things before everything is ready.”His advice for African start-ups is: “Opportunities always lie in the place where people complain.”
Right now, he told Business Day, Africa has the same challenges that China faced in 1999 when he started Alibaba, which was his third business: “No credit cards, no logistics, no government support.”
He highlighted “that is the opportunity” – which can be seen in the fintech start-ups focused on financial inclusion that are booming across Africa.
“Governments should encourage entrepreneurs. It’s the entrepreneur that will drive dreams in Africa. Small businesses create jobs,” Ma said. Therefore, “dreams drive the economy”.
• Shapshak is editor-in-chief and publisher of Stuff .