My childhood was an analogue world, but by my late teens the internet was starting to reshape how humanity lived and worked. Fast forward a few decades and an analogue life is a hazy memory. I find myself unable to imagine living in anything but a digital world. Most recently, artificial intelligence has hurtled us forward, without certainty of the destination or even whether we have a working set of brakes. It’s exciting, but at the same time quite scary.
Shaun Smit, director, Transcend Capital
The reality is that technology is moving faster than human productivity. In a free market, this creates a massive disconnect: the returns flow to the capital owners, not the workforce.
The bucks stop at the top
The problem is that this wealth concentrates at the top and isn't cycled back into the economy through spending. We then end up with a dysfunctional economy where the majority are financially insecure, and there is simply not enough consumer demand to drive growth.
There is significant knock-on socioeconomic and sociopolitical risk, and it most likely will not end well. At least for most of society. I believe that governments acknowledge this, but at the same time, cannot afford not to ride the wave and remain technologically competitive with other nations. Literally, you snooze, you lose.
The risk of advancing technology resulting in an increasingly dysfunctional economy is not new and has been flagged by various thought-leaders since the 1950s. But with the pace of technological change over just my adult life, and now with the rise of AI, this feels like a very real risk that may truly come to the fore in our lifetime, and if not, certainly in that of our children.
South Africa is often cited as having the highest wealth inequality in the world. While this is unquestionably significantly a legacy of apartheid, it has remained persistent, with the wealth gap steadily widening since the end of apartheid in 1994. Arguably the ANC government’s Broad-based Black Economic Empowerment (B-BBEE) policy has not been successful, and needs to be reviewed.
A consistent criticism of B-BBEE is that although there has been significant wealth creation by Black people, it has been among a relatively small number of people. B-BBEE has not lived up to its name and been sufficiently broad-based.
If the problem in South Africa, and indeed worldwide, is increasing wealth inequality and related socioeconomic and sociopolitical tension, then anything that closes the wealth gap is a possible solution.
Ownership, involvement, engagement
Employee ownership, whereby employees directly or indirectly share in ownership of their employer, offers an opportunity to broaden capital ownership and achieve a more balanced economy.
From a business owner’s perspective this is not an act of philanthropy – employee ownership makes business sense. This is because employee ownership increases employee engagement and loyalty.
It creates a sense of ownership, which brings better overall strategic alignment and collaboration and results in higher levels of innovation, initiative and productivity. Higher engagement levels plus a sense of ownership in turn brings increased job satisfaction and stronger talent retention.
In addition, from a South African perspective, an employee share ownership plan (Esop) is a good way to drive broad-based transformation, and address B-BBEE ownership, thereby improving B-BBEE scoring and status.
Employee ownership not only offers benefits at societal level, it also offers a vehicle to drive profit at an organisational level, and personal benefits to the people involved. It is economically effective, politically attractive and socially just.
As we try best to steer into an uncertain future of technological shift and related societal evolution, surely employee ownership should be something that governments and business owners take a more serious look at?
