Are whites benefiting from BEE/affirmative action?

[duncan drennan]

There is an interesting article on the M&G about how whites are "benefiting" from BEE and affirmative action...here are some extracts

The theory goes something like this: in government as well as in corporates, white managers perceive their career opportunities to be closing down because of affirmative action. For the first time they are considering starting their own businesses as a serious option. In many families they are the first generation to think this way. They leave the corporate comfort zone, struggle -- as all small business owners do in the beginning -- live frugally and plough all they have into their business just to make it survive. After a few years, their now stable businesses allow them to return to some kind of comfort zone -- this time not only earning at least what they used to in their corporate jobs, but also building up capital as the value of their businesses increases. The result is unprecedented white capital accumulation.
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Occasionally, there is an angry denial of this trend, usually from someone who perceives the question as an attack on the BEE movement, and who argues that the economy is growing so fast that corporates are employing all managerial skill -- black and white.

A placement agent in the financial services sector, who does not want to be named, strongly disagrees with this stance. “We’ve had positions where we’ve begged our clients -- I mean literally begged them -- to consider white candidates, and they will not. They say ‘well, if we can’t hire we will wait’, and they wait for nine, 10 months.�
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Says Zuccarini: “They’re struggling. I think one of the problems with being over 40, you know, many of them had been in corporate life for 15, 20 years. They’re used to the daily continuity and assurance [of corporate life]. Their adaptability to the stress of running a small business and setting it up -- it’s a mind shift for many of them. But they’re doing it, and some guys are doing really, really well.�

Full story on M&G

Really? More thoughts to follow later...

[Dave A]

This is the law of unintended consequences hard at work. It's also something touched on in the BEE submission.

One of my departure points is that Employment Equity legislation has hurt entrepeneurship amongst blacks. This goes back to "why do people start their own business in the first place?" And the hard truth is more often than not because they have to. Either by force of need or more commonly by dissatisfaction with their employed environment.

Sure - there are lots of failed attempts, but some will succeed. Looking at it from a national point of view, it's a numbers game.

There are also some wonderful observations in that article. How about this one:

But observers agree that leaving the corporate comfort zone is painful.

Gideon Maas, head of the South African chapter of the Global Entrepreneurship Monitor, says many whites starting out in business have some speciality, but fall short when it comes to basic, broad skills needed in business, such as financial management. “They have skills, but do they have all the right skills? If I’m not good at financial management, what does a corporate manager do? He goes to the finance division. In a small business, you can’t.�

The classic challenge facing small business owners - and exactly one of the areas where this site hopes to add value.

And then there's this gem:

He estimates that he would probably make as much money in the corporate world as he does from his businesses, but that there is more security in running his own show. “In corporate business at the moment, they can pay you big money, but there’s no real security. It’s completely changed.

For myself, I've always seen more security in having my own business than being employed. With my own business, my job security depends mostly on me. When employed, your job is massively dependant on people not under your control (although COSATU would like to change that ).