approach is more sensible than betting the shop on a single forecast. It makes you more nimble when things change.
The gypsy lords
One of the most important roles of a scenario planner – especially a foxy one – is to pick up the megatrends which are reshaping the world. They become the new rules of the game, according to which the future may play out. In this article, the trend chosen is the growth of super-rich families on a cosmopolitan scale. They are immune to economic cycles. On a recent visit to London, I heard of a house that had been put on the market in Kensington for £75m. It needed another £10m spent on it to restore it to its former glory. No wonder one estate agent in the area said that every one of the last 60 houses she had sold was to foreign families. Not one British buyer could afford the asking price. Last year, sales of Rolls Royce and Bentley cars worldwide increased by over 30%. Life is unfair, isn’t it?
I call them the “gypsy lords”. They are the roving kind and they have the money and the talent to wander wheresoever they choose.
In South Africa, you will find them in the gated golf estates or suburbs like Kloof in Durban, Hyde Park in Johannesburg and Constantia in Cape Town. Basically places where you can lock up and go away for six months of the year. We used to call them “swallows” when it was just English people following the sun; but now it is a variety of nationalities that find South Africa a favourable place to chill out with their preferred glass of champagne in hand while texting their private banker.
They have no allegiance to any particular country – only their own families and friends. They schedule their stays in each country to minimise their tax. Some spend part of the year in luxury cruise ships where no official can claim them as a resident of anywhere. Others fly their luxury cars with them as they cannot do without their pet wheels. Of course, the richest of them all have their own private jets as caravans to ferry them to any destination at a whim.
South African-born gypsy lords usually have houses in the south of France, flats in Chelsea and one or two exotic pads elsewhere in Africa. Virtually the whole of Knightsbridge and Kensington is in the hands of Russian and Middle Eastern gypsy lords. They have driven up real estate prices to a level which not even wealthy English people can afford. How about £20m for a nice house or £1bn for a Premier League soccer side?
The new emerging class of gypsy lords are from India and China with a sprinkling from South America and Africa. In Johannesburg, you know you have a gypsy lord next to you when you have a permanent security presence in the street made up of men in dark glasses with tinted-windowed BMWs.
For the gypsy lords, the recession is an opportunity to spread their global footprint. They snap up businesses which are famous brands that have hit hard times. Some ostentatiously display their wealth at charity functions and by hitting pole position in lists of richest families. Others hide behind a veil of secrecy and nominee companies. They do not want the grey side of their businesses to surface in the public domain. They shun the media or own it.
Globalisation has weakened the power of governments to hold the gypsy lords accountable. Indeed, the tough financial circumstances and growing debt problems of nations worldwide have turned the gypsy lords into some of the most influential powerbrokers in the universe. Forget presidents and prime ministers. The gypsy lords and their purses hold sway. They follow one step behind and issue the instructions.
So in future, please don’t talk of gypsies in derogatory terms or picture them only in barren fields surrounded by hostile homeowners. Remember that mobility has become a key characteristic of the Internet and Twitter age. Somewhere a gypsy lord is pulling strings which somehow will have an impact on your life. If things get really nasty, he will simply move to another country and pull the strings from there. That is the reality of existence in the teenage years of this century.
Small is really beautiful
You will see that small business is a recurring theme in this book. Its encouragement requires a change of heart from the powers that be.
Let a million small businesses bloom. I know this sounds Maoist, but it is a lot more inspirational and realistic than saying “we are going to create another five million jobs by 2020“. The latter implies that you are in control of the situation: if you target a high economic growth rate, add a public works programme here and there and select one or two industries that are in the public eye like green technologies, the result is assured.
Actually our economy is closely correlated to the performance of the world economy. When the world booms, we boom. When the world goes through hard times, so do we. Yes, it would seem that we are moving into a two-speed world where emerging economies will grow three times faster than advanced economies. Nevertheless, it would seem that we are caught somewhere in the middle – we will grow faster than Europe but we won’t grow as fast as China, India and the rest of Africa. We are not a cheetah but nor are we a tortoise. I guess we’re a buffalo which is quick when it wants to be but can be chased down by other animals.
All this adds up to the fact that, in the current global environment, a goal of 6 to 7% economic growth is pretty stiff for South Africa. For that is the rate that many economists quote is necessary to lead to significant job creation. It may happen but, in my book, it would only be in a scenario of a renewed economic boom for the world as a whole.
Meanwhile, we cannot just sit on our hands and hope for the best. Two statistics suggest that we have to do something which is radical and far-reaching. The first is that there are 14 million South Africans on welfare and only five million taxpayers. The second is that the unemployment rate among 18–24 year olds is 42%.
My recommendation – and I have been making it for a long time – is that we have to create a whole new environment in South Africa which is favourable for entrepreneurs. My 2020 vision is for rural and urban communities to be teeming with small businesses, buying and selling from and to each other; and this activity is the key driving force behind the African renaissance rather than the expansion of government and big business. Obviously you need effective government and a thriving big business sector to make it all happen. But the focus is on empowering ordinary people to do extraordinary things.
The word “job“ implies subservience to someone else. Five million jobs conjure up the picture of five million “employees“ in hard hats slaving away in the sun on grandiose projects selected by some well-meaning committee full of policy zealots. “We know better than you,“ they smugly say. “At least you have work now and belong to a trade union.“ In other words, it is a collective vision based on the “Walk Behind“ scenario where the common people walk behind the so-called elite or, as George Orwell put it, some animals are more equal than others.
The alternative, as the Old Mutual Dinokeng scenario exercise suggests, is to walk together where the majority of citizens choose their own direction in a framework that supports them to do so. They don’t walk apart because there is enough synergy in the system for them to want to walk together voluntarily.
Intellectually and spiritually, the idea that small is really beautiful is so far apart from the way we conduct ourselves today, where public/private partnerships essentially mean political and business leaders deciding what is good for everybody else. An entrepreneurial society is a truly democratic society where the economy grows organically as a result of the millions of smart business decisions made by individuals who are both liberated and empowered.
At least, let us have a debate now about which is the best vision before committing ourselves to a new path.
The many faces of Mark Zuckerberg
The challenge for Mark now is to keep re-inventing new applications for Facebook or maybe some completely different form of social interaction on the Internet. He still has to prove that he can walk the path trod by Steve Jobs who never quit being creative.
If Descartes, the great French philosopher, were alive today, he would change his famous mantra “I think therefore I am“ to “I click therefore I am“. That is the message I took away from a stunning movie I saw last week called The Social Network.
It revealed how powerful a force the Internet has become in our lives and how fast a good idea can spread through