Masterclass by Ma has key to SA’s growth
Asia’s richest man was in SA in August to launch a $10m fund for entrepreneurs in Africa
It’s a pity President Cyril Ramaphosa didn’t make his scheduled address at a UN conference in August because he could have heard Alibaba founder Jack Ma give a masterclass 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.
THE BEST WAY TO CREATE JOBS IS TO ENCOURAGE SMALL BUSINESS, TO ENCOURAGE YOUNG PEOPLE.
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 is now legendary, especially in the start-up world. With no resources and working from his apartment with 17 cofounders, 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 10 most valuable companies. After listing in 2014, Alibaba’s current market capitalisation 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 he 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 a thriving small business sector, from which entrepreneurs generally emerge, and to stimulate the internet, from which 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 unemployment rising to 27.2% in SA, increasing job growth will 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, Ramaphosa 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 the continent, including 52 young Africans who Ma has been mentoring through his eFounders Fellowship and who have been to Hangzhou, Alibaba’s home town.
In an interview afterwards, he said 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 Mukhisa Kituyi, who told the conference: "The digital divide is our political responsibility first."
African governments across the continent have to reduce regulations to starting new businesses and adopt policies for this new digital era, he said.
"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 minister of trade and industry 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" 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 about the time he opened his first business in 1994 that had the word "internet" in it but at the time there was "no such word in the dictionary".
China also lacked financial infrastructure such as credit cards and payments systems, he said, but added: "entrepreneurs do the things before everything is ready".
His advice for African start-ups is that "opportunities always lie in the place where people complain".
He told Business Day that 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", that 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 (Stuff.co.za).