The public sector, labour and some civil society organisations must move away from the perception they often have of business as a single entity that they can negotiate with, business organisation Business Leadership South Africa (BLSA) CEO Busi Mavuso writes in her weekly newsletter.

“I understand the temptation to do this – we often think of role-players like labour and capital acting in some coherent way in our societies. It makes us think that we can somehow engage with these entities to change how they behave.

“But when it comes to business, this just isn’t true. All of us are in business to some extent because we exchange our time or assets with others. Sometimes we organise ourselves into companies to do that. There are tens of thousands of companies, many of them in competition with each other. They have many different objectives – some consist only of their owners, others are large-scale employers, some are start-ups and others are mature multinationals,” Mavuso outlines.

She elaborates that sometimes, some of these businesses organise themselves into associations that can represent them in certain forums.

She highlights BLSA as one such example, with members working together through the organisation to engage with others on how to improve the business environment and deliver on the economic potential of the country.

However, she clarifies that while members are aligned in a vision of the country they want to see, they are not a single entity that can be called “business”.

“This is important because there is often a view expressed that business should ‘come to the table’ or deliver some sort of sacrifice to achieve some or other policy objective, like investing or employing more people. But this kind of thinking is incoherent – ‘business’ cannot bind itself to any of these kinds of objectives. Only individual agents can enter a contract.

“Government can and does enter into contracts with companies all the time for all kinds of goods and services. But it cannot hope to enter such a contract with the whole of business in the same way – there is no such agent out there,” emphasises Mavuso.

Therefore, she says, policy makers need to focus on the kind of environment their policies create and in which businesses operate.

“That is the way you get what you want from business. Social sciences like economics research how different rules of the game lead to different outcomes. If you want businesses to expand, employ more people and invest, it has to be profitable for them.

“Not all business is about profits but no business can survive for long while losing money. And no one, in business or outside of it, puts their money at risk without a reasonable prospect of generating a return,” Mavuso avers.

She suggests that government should, therefore, consider questions including: how the environment looks to entrepreneurs who are considering putting their money at risk; what factors make that entrepreneur uncertain about whether investing is a good risk to take; how the cost of things affect their prospect of generating a return; and how the costs of hiring employees will work.

She posits that the answers to these kinds of questions can help government see what must be done to get what it wants.

“To get more, better-quality jobs and faster poverty-reducing economic growth, you have to make it easier for businesses to invest and hire people. You need to do research to understand the impact of different policy decisions and listen and learn from those operating at the coal face about how they perceive the environment.

“BLSA is committed to supporting government. We can draw on our members’ perspectives as major investors and employers to help other role-players understand how conditions are affecting them,” Mavuso points out.