From its days as a vital link on the East-West trade route for the Dutch East India Company to the current day faith being shown in South Africa by the BRIC economies as a strategic gateway into Africa, the words of Vladimir Lenin have never held so true: “Whoever controls the tip of Africa controls the world.” Recognising the tactical importance of South Africa and how to harness this role is central to the academic focus of the Gordon Institute of Business Science (GIBS).
In a world still flinching from the global economic crisis and the fallout from the sovereign debt crisis in Europe, business and investors are increasingly looking for new markets which can offer growth and opportunities. Again focus has returned to South Africa, along with dynamic emerging markets such as China, Brazil, India, Russia, Nigeria, Angola, South Korea and Mexico.
Africa is an exciting ‘final frontier’, all be it a complicated mix of 54 sovereign nations with their own distinct regulations, cultures, religions and social conventions. Doing business in Africa is not as simple as jetting in and transplanting existing strategies. Africa is a special continent with unique needs, which is why GIBS offers its students entry into a world of cutting-edge approaches to business.
GIBS is strategically placed to offer both a general management MBA and an Entrepreneurship MBA focused on both Africa and the rest of the world. It’s a broad canvas, but one which Founding Director, Professor Nick Binedell, believes is vital in an increasingly connected world. “We are generalists not specialists,” he explains. GIBS’ drive is to be relevant and innovative; courses are regularly updated and the school’s entrepreneurial beginnings mean that fluidity and adaptability are critical.
All certificates and degrees are academically taxing and require a 100% commitment from students for up to two years. It isn’t, however, all about a hard slog, the cornerstone of a GIBS MBA is exposure to international markets. In 2011, students travelled to an array of destinations: The East and West coasts of the United States, Brazil, India and China.
Shireen Chengadu, director: Academic Programmes at GIBS, says: “It’s vital to ensure that the countries we introduce our students to are cutting edge and relevant and they are asked to choose a country that would most suit their areas of interest as well as their industries.”
While GIBS’ courses are structured on Western business practices, students are becoming increasingly interested in Eastern business practices, so students enjoy the option of visiting traditional developed markets, such as the US, or the new crop of dynamic markets, like China. Interestingly in 2011 there was an equal split between students electing either the US or China as their destination.
This process exposes students to global best practice in industry, lectures and insights from leading academics and the cultural and societal dynamics of a developed or emerging dynamic economy. Cities like New York, for example, get their competitive advantage from being melting pots of cultures. “New York City is a migrant city and it works. This could be a vital lesson for South Africa,” explains Professor Adrian Saville. Sitting down with top South African businessmen – like Sean Riskowitz, a leading New York hedge fund manager, and Peter Tollman, MD of Boston Consulting Group – to discuss how they manage to forge ahead in foreign markets, is priceless, he says.
India too holds invaluable lessons. As one of the fastest-growing emerging economies, India has actively established a top-notch education system. India expert Abdullah Verachia says: “India has phenomenal business schools, in my experience some of the best in the world.” This priority spending on education and up-skilling the population has, however, left infrastructure crumbling. “Their airports are awful and your hotel is only seven kilometres away but it takes you an hour-and-a- half to get there,” he says.
India has not only taken state-of-the-art affordable education to new levels, it is also developing affordable medical care. Again, the cross-over for South African business and innovative entrepreneurship is apparent. Take, for example, the work being done by Dr Devi Shetty, founder of the Narayana Hrudayalaya Hospital on the outskirts of Bangalore. The hospital offers top-quality private medical care at a fraction of the cost of global medical facilities. Here they perform open heart surgeries for $3 000 and cataract operations for $15. Abhay Singavi, the 25-year-old CEO of the hospital explained: “Our hospital is the Walmart of India … using economies of scale to ensure the best medical care at a fraction of the price.”
Like Africa, India has a poor security track record and corruption has reached epidemic proportions, but Verachia says that “despite its government, India works”. He believes it’s key to build good relationship between the private and public sector, so they can work together for the benefit of the country. Africa can learn a lot from how India has turned its population from a drain into a productive economic force to become a leading dynamic economy in just 20 years, after all both face similar challenges, including diverse and fragmented societies, high rates of poverty and massive populations.
No discussion on global lessons and strategic thinking would be complete without mention of China, projected to become the biggest economy in the world by 2015. Dr Martyn Davies, GIBS faculty and CEO of Frontier Advisory, is an insightful China expert, who offers students key perspectives on this economic giant which go beyond the negative reporting adopted by most Western media groups. “I am confident China will continue to grow by between 7% and 8.5% in the foreseeable future,” says Davies. And, as such, China continues to be a crucial catalyst for African business and global standing. Already South Africa’ biggest trading partner, this relationship – fed by China’s insatiable demand for raw materials – means that South Africa’s fortunes are inextricably linked to those of China. This symbiotic relationship permeates the African continent.
How the likes of China and India address social problems through genuine corporate social investment (CSI) is another area of focus for the GIBS MBA. Davies says “the new generation (in China) is focusing on CSI, changing the face of Chinese economy”, and in India poverty alleviation part of the business psyche. Take, for example, Tata Group which donates 67% of its profits to charity. In fact, 67% of the company is owned by four organisations that channel their profits directly to the people. Tata Chairman, Ratan Naval Tata, lives in a two bedroom flat and has not drawn a salary for 20 years, believing he has more than enough. He earns just $1 a month for accounting fees.
Closely linked to this are lessons of sustainability, which South African business can both teach the world and learn from markets such as China, which are dealing with the dramatic environmental challenges of such accelerated growth. Davies believes the environment challenges facing China could be the one factor which impacts on future growth; a lesson for both Africa and the world.