The essence of the Shared Value business approach is about an economy that invests in social justice, otherwise, it is also referred to as a business model that maximises profit with purpose. In developing African countries where the majority of the people have been excluded from the mainstream economy and many are displaced and suffering from many social ailments, there are ample opportunities for implementing SV approaches. Moreover, most developing countries have untapped potential both in the form of their human capital and natural resources.

The Shared Value approach lends itself to the development of a new generation of entrepreneurs and investors in that it calls for multinational corporations, development finance institutions, NGOs and local enterprises to recognise that they are key collaborative partners in delivering post COVID-19 economic recovery in ways that effectively resolve some of the social challenges, for example, unemployment and climate change. No institutions have all the required capacity and resources to create the much needed social impact by acting alone. As a result, many Shared Value scholars and practitioners argue that to solve poverty, inequality, unemployment and climate change, organisations and investors should invest in future markets, sustainability, and work towards greater inclusivity and economic justice for the marginalised majority.

It would be unfair to expect the government of South Africa to have all the solutions. In fact, no government in the world has ever been able to deliver everything to its citizens on its own. Therefore, collectively, business, government, DFI and NGOs have the responsibility to come up with relevant solutions. Now than ever before, it is necessary to recognise that the old thinking that informed traditional business leadership will not see us through the present challenges of COVID-19 and heightening social gaps. The paradigm shift as advanced by Shared Value should help leaders to recognise the opportunity to implement economic reforms that reinforce inclusivity and sustainability.

While the government is developing a framework to help investors to assess potential long-term returns on public infrastructure projects, that will increase investment in social and economic infrastructure as a key focus of SA’s economic recovery strategy over the medium term, organisations and development finance institutions need to redefine their business. Although the role of Development Finance Institutions (DFIs) in financing infrastructure projects will be particularly important in the drive to kickstart SA’s ailing economy, their approach needs to be inclusive and oriented to addressing some of the social issues. They should provide credit and a wide range of capacity-building programs to communities and SMEs whose needs for capital are not sufficiently served by private banks. Financing emerging entrepreneurs in the green industries such as renewable energy projects is one of those initiatives that will create employment opportunities while addressing climate change and energy security.

In addition, now than ever, it has become a necessity to embrace 4IR, AI and robotics. However, technology advancement that is not supported by capacitation often results in unintended consequences such as layoffs. As organisations accelerate digitisation and AI, reskilling in order to take advantage of shifting modes of consumption, supply, interaction and productivity caused by remote working has become a priority for them and the institutions of higher learning. This way, businesses will be creating a resilient economic society thereby investing in the development of the next generation of talent in and around the communities where they operate. Developing countries must stop the mentality of chasing what is happening in the rest of the world, but rather focus on devising the long-term solutions and long-term interventions that will stimulate innovation by investing human capital as a source of competitive advantage.

In as much as there have been some successes in implementing specific policies meant to give previously disadvantaged groups a leg up, Black Economic Empowerment (BEE) legislation have failed, with mainly the elite and the politically connected benefitting. Most black South Africans remain side-lined from the mainstream economy, hamstrung by a lack of access to capital, land, skills, and product knowledge. Although the COVID-19 pandemic has also exposed the massive inequalities in our society, it could also herald a much-needed rethink of the transformative role of the supply chain. Organisations need to reimagine their value chains and exploit the benefits of supply chain localisation to guard against future disruptions caused by relying too heavily on a limited global supply chain. This can engender real transformation through meaningful enterprise development which will go beyond mere compliance with the BBBEE requirements.

There are divergent views around South Africa’s minerals and energy complex (MEC) growth path. Some scholars argue that MEC has retarded South African industrialisation because growth through harnessing natural resource rents is volatile and transitory, oriented towards growth-damaging rent-seeking behaviour, and discouraging investment in human capital. Instead of chasing shadows and pursuing development through a path that has failed over the last 50 years, the country needs to shift its strategic direction and adopt entrepreneurial orientation (EO) which will encourage innovativeness, proactiveness, and risk-taking, as its new strategic posture. It is increasingly recognised that know-how associated with the generation and exploitation of knowledge is critical for economic growth for both rich and poor countries. Therefore, if South Africa, wishes to foster economic growth and development, the boardrooms and C-suites of corporations need to be filled with new generation entrepreneurs who will have to master new methods of production, introduce new goods and services and conquer new markets. Thus a need new generation of entrepreneurs who see the opportunities associated with every risk and challenge, than just being reactive. Similarly, impact investors are needed, they will create Shared Value through sustainability investing and demanding more accountability in terms of the ESG practices. Otherwise, the opportunities right now, especially in the transition to a green economy, agriculture, mining, manufacturing, healthcare as well as in tradable services, are significant and will go unnoticed.

These are amongst many deliberate Shared Value interventions that will provide people meaningful employment and entrepreneurship opportunities necessary to change the economic trajectory of our country and accelerate the economic recovery. Moreover, responsible businesses have the opportunity to maximise their profitability through social impact, thus profit with a social purpose.

Dr Talifhani Khubana is a Strategic Business Development Advisor at Shift Impact Africa. He holds a PhD (Business Management) and is a qualified as Certified Financial Officer (SA), Certified Independent Reviewer (SA), Professional Accountant (SA) and a Tax Practitioner (SA).