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    Collective Insight September 2022

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    Tiso Blackstar Group
    Collective Insight September 2022

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    Collective Insight September 2022

    Uploaded by

    Tiso Blackstar Group
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    Collective Insight September 2022

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    Collective Insight September 2022

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Download as pdf
    91 views14 pages

    Collective Insight September 2022

    Uploaded by

    Tiso Blackstar Group
    Collective Insight September 2022

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    © All Rights Reserved
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    @ COLLECT Pe, INSIGH GENERATION RESET COLLECTIVE INSIGHT Collective Insights 2 collaborative initiative published quarterly by the Financial Mal. Theatticles included here were selected byanindependent Advisory Committee to reflect some ofthe bestinsights from investment professionals, practitioners, and academics in relation to selected financial challenges. Collective Insight enjoys the support ofthe Gordon Institute of Business Science's Responsible Finance Initiative, the CFA Society (OfSA, the Financial Planning Institute, ABSIP and the Actuarial Society of SA. Our vision was to createajoumal that SA's broader investment community and its stakeholders could collectively own’, carying content totally Independent of commercialinterests. Forinquiies contact Anne Cabotlletzhauser on cabota@gibs.co.za convener: ‘Anne Cabot Alatahauser Proce dro’ ofthe Gordon stl of Business Responsitie rence nniabve Editorial advisory committe: ‘Simon Dagut Exeauthe nthe oftce of hechll executive oficer Stondord@ank A Kelty de Kock (Che operon oftca af Ot Mutua Trust ‘Company Prof Evan Gilbert [Associ professor ot Stlenbosch Univesityand strotegs at Momentum Investments ‘Amandakhors Vice-president and board member ofthe istic of Reteement Funds SA, caret Laubscher ‘Manager Consumer Education Fromework Pinal Sector Condit Athorty David Kop, CFP HOD: potty and engagement Fnonca/ Penning Instcte Fran Troskle eseoren onaiys PPS Datiuevan der Walt Memera!ineASSA Investment camminee heed ofproduct evelopment at M&G Investments SouthemAtnca erna Visser, CFA ETF stoegistand nono vise atfSA This edition of Collective insight provides an alternative starting point to ensure better inheritance for ail South Africans & Eu. 2 Ihe day is April 27 1904. Mil- lions of people are queuing t0 vvote in SA's first democratic elections, Across the country, the atmosphere Is jubilant. The expecta tion is that our next generation will get a chance to start on a level playing field No-one queuing to vote that day ‘would have said that the envisioned future included 3-million South Africans Jacking access to basic water, six out of 10 children being considered multi- ‘dimensionally poor, or more than a (of the population that can work being ‘unable to find jobs. But nearly 30 years later. that is what ‘we have. The inequality that has charac- terised SA's history has resisted any efforts to be overturmed. Our social and ‘economic inheritance is stil prevalent ia the structures that make up our society. What can be dane now to deliver the promised “new” SA? How can a genera- tional reset be delivered that will ensure better inheritance for all South Afric- ‘ans? While there are no straightforward ‘answers to these questions, this edition of the FM's Collective Insight provides an alternative starting point. ‘You may notice that our contributors do not focus on economic growth stim- ulation or job creation. Rather, they argue that "Generation Reset’ needs to Start in a totally different space ~ one that asks: How do we ensure our next ‘generation can even fulfil thase expecta tions? What do we need to “undo” to ‘create a society that can “do”? Our contributors answers cover four broad themes: @ A focus on holistic early childhood development in the cognitive. emo- tional, physical and spiritual spheres ‘can unleash a massive positive multi- plier effect that will also benefit future ied generations. Getting this right will require a systemic approach involving the government, private providers, NGOs, religious and com- ‘munity providers, and crucially, par- ‘ents. In addition, the care economy has long been undervalued and underestimated, without sufficient protections and benefits. The care {economy for the most partis not measured. This means it cannot be properly managed and will remain lunaccounted for in standard policy tools. (© An arguments made that $X's educa- tion system and skills development programmes are no longer fit for pur- ose and require an overhaul. While fining knowledge i important it ‘can no Ionger be the only objective of these systems. We need an orienta tion that creates lifelong leamers, encouraging our people to become Creative, resilient and adaptable thinkers and leaders. New comm ‘ments won't be enough. It will come down t equitable implementation, (© Changes to the delivery of health care in SA are also argued for. fee-fr- service system provides ltl incent- Ive to focus on the quality of out- comes and reduction of casts. On the other hand, under a value-based care system health-care providers are compensated based on the outcomes September22- September 28,2022 of the health care provided rel- ative to cost. Value-based care at scale will require a bold transformation of the health. care system. Similarly, getting to the heart of health-care issues means we need to ensure that men are actively involved in their own and their partners’ and children's health. Young people, too, can be far more involved, especially when it comes to creative rur al delivery solutions, @ How can socially inclusive and ‘economically resilient com munities be built? Across our Cities, we have seen the migra- tion of the most vulnerable to ‘where their potential for casu al employment is the greatest. but where their prospect of affording a house is slim. One contributor argues that a rethink is required where GDP growth cannot be the domin- ant national priority. Smart cit es use ICT 10 increase the eff ieney of government servi and share information with the public. While the creation of a smart city is a very capital intensive project that may at first not seem to warrant pri oritisation, it can have expo- nential benefits in terms of service delivery and citizen welfare, Read, And think again about our priorities for the future. rer UNSHACKLE THE KIDS’ INNER MAGIC Only by thinking without any limitation will we begin to find solutions towards unlocking the full potential of children born today blo Picasso famousty sad that it took him four years to paint like Raphael, but alifetime to paint like a child So ifwe want 10 paint a picture ofa brighter future for our country by identifying new solutions itis plausible that we should think in a new way: Like a il ‘Only by thinking without any limitation vill we begin to find solutions towards unlocking the fll potential of the children bom today. and empower them to create a more resilient, functional, and stable SA for tomorrow. Statistics show that every child hears the words, no” and “don't” on average 48,000 times before the age of six, while hearing the words, “yes" and “can” only 5,000 times. ‘This negative narrative is captured withia the unconscious minds of all children as the conscious brain is only fully developed at the age of seven, “These same negatively conditioned chil- dren, in ime, become the parents of the next generation of children, transferring their learmed behaviour, knowledge and sets of beliefs onto thelr children. ‘Aidt this phenomenon an education system that promotes only one answer per question, and you begin to understand why a study across a sample of1500 young chil dren over a period of 15 years resulted in most of them being “dumbed down’ 0a level of not being able to find more than 10% ofthe solutions they found for the very same question 15 years ear ‘Overlay our various lenses through which we see the world, imparted to each ofus through our cultures, languages, and religions, and you begin to see the dficulty wwe face in creating the change we so des Perately need How then, when we consider this immense depth to the conditioning of the human, do we begin to find solutions to such complex problems? Invest in the development of the being We spend a disproportionate amount of energy on the development of the logic of the human through the various lie stages of their growth journey, systematically imple: ‘menting what we want them to become, ‘what they must believe, and how they must feel, behave and respond to the world But what if we rather invested our growth efforts into the magic of the being? ‘That is, the “why" they will do “what they do in the future. If we could enable our children to define their purpose with clarity, we would empower them with the capacity to create the solutions needed to take our country forward, By giving our children the power of their Inner purpose. we will create a generation who operate from a place of service, and who are capable of planning for the next quarter century rather than merely for the next financial quarter. So, if there is truth to this hypothesis, 10 this incredible driving force of the ling being within the human, how then do we awaken this within the millions of children bor today? Put our eggs in one basket ‘The education basket. To solve a systemic issue, we need a systematic solution that can operate at scale. But how do we hedge fon a system as broken as our current SA educational system, where 80% of our 25574 schools are graded as dysfunctional? ‘How do we bet on this education horse in a race against time, when even a highly Seplemer22- September 28.2022 + financialmailcaza (57 COLLECT|VE INSIGHT functional education system in any of our developed world counterparts is, Gesigned 10 create factory thinkers? We build a Trojan Horse A new system alongside the current cone, built on the four cornerstones of a wholly developed human being: the Intelligence Quotient, the Emotional Quotient, the Physical Quotient and, ‘most importandly, the Spiritual Quotent, CHILDHOOD oA AE Some estimate that for every rand invested in early childhood development, the country would get R10 back. It's our single greatest opportunity to shift structural inequality e's imagine the journey of the average SA child. Well call her Nation. Within her first few years of life, key features of Nation's emotional, social, and cognitive evelopment willbe set in motion. The stimulation, nourishment and nurturing she receives now will shape her future learning and wellbeing, and ultimately her participation in social and economic Ife as an adult. But with a three in five chance of growing up in poverty. Nation will face major setbacks. In her critical first year Getting early childhood PR eek ey is usually scattered across renee ‘The logical and magical sides of the full ‘make-up of the human being. By radically overhauling our syllabus, ‘we can reduce the amount of academic- ally based subjects to wo, and in doing so, create the capacity 10 teach a new generation a new set of subjects around the power of the unconscious mind, and the potency of the being Oliver Wendell Holmes powerfully _ START of life, she will have a six in 10 chance of accessing the child support grant. This early income support would reduce her chances of nutritional stunting, which affects a quarter of SA's children, ‘When Nation becomes more inde pendent, and her mother needs to find Create, or return to work, Nation may be among, the 35% of children (under age five) 0 be enrolled in an early leaning programme. These are delivered by Wwomen-led, nonstate, and largely Informal NPOs and micro-enterprises. Because Nation has a less than 30° chance of her fees being subsidised by government, this early learning will be costly for her mother. By the time she reaches age five Nation will have a less than 30% chance Be eca) Coen Nice ed stated that most of us go t0 our graves with our music stil inside us, unplayed So, here's to the creation of a School Ing system with the sole purpose of helping our next generation find their inner music. And, in doing so, enabling them to create a mass philharmonic orchestra, playing their hearts out towards the creation of a country that is a shining example to the world. x of being developmentally ready for school. These foundational set-backs will become increasingly difficult ro ‘overcome as she moves through school and into adult life. The multiplier effects of investing in early childhood How then can we hope to curb inequal- ity if itis set in motion from the womb? Research suggests that intervening at critical points in a person's life course particularly in pregnancy and early luldhood ~ can radically shift trajector Jes for children, the country at large and future generations. This is because investing in early huldhood development (ECD) accrues benefits over the life course with returns for schooling. tertiary education, employment prospects and ultimately national budgets. Modelling suggests that the eradica- tion of stunting alone could generate an additional R62bn in GDP a year ‘That's enough to fully fund a national carly leaning programme for 0-5-year- folds and make a sizeable dentin the funding shortiall at tertiary institutions. Some estimate that for every rand invested in early childhood development ‘more broadly, the country would get RIO back. But to approach ECD only in terms of eee aCe PR ee oud SPE eo a rice) Cre) right er ay Coen eee eral ee nd Rec iertea rs Send aN eects based and religious organisations, uni- Reena Baa renee es Crue es ees ei istic development of the child in all areas of cognitive, socio-emotional and physical growth by working in isolation. The lack of Pecan cence straint undermining efforts to boost access, Cree ny eee ie Poeun ESCs ees Poured) September 2- September 28,2022 pr en ee ket Pe rae ences Sec A ee rec eRe stimulation and learning, to primary schoo!; Pune uae Lest tural appropriateness. This creates a sense See es osc Peres oer eee Oe eon een i CEC rer ae et reer Active investing, an yl) for an ever-changing world esi ean With 250 investment professionals in the world’s investment CRN etiam aces cleo Isn't it time to change how you see investing? ninetyone.com/change Des ReeeCaeC) eaeeriee eaten o COLLECT|VE INSIGHT return on investment is t0 miss its real impact, which extends well beyond GDP. Instead, we might think of ECD as our single greatest opportunity 10 shift structural inequality. Not only because it tunlocks the social, economic and phys: leal thriving of children like Nation, but also because it creates a more just and Aourishing society for them to Inherit. This isa sodety in which more women ‘have quality and valued work: more young people are equipped for leaning and earning; and health and wellbeing are a national priority How do we prioritise early childhood? ‘To invest in ECD begins with investing in women. This star's during pregnancy. Children’s early thriving is driven, in part, by their mothers’ mental health and ‘utrtional status. Yet studies from S's poorer neighbourhoods suggest that as ‘many as four in 10 pregnant women face food insecurity while six in 10 experience depression. By extending ‘income support to mothers before they five birth, through the proposed Mater ‘al Support Grant, we Can Safeguard both women and children in radical ‘ways. and start o disrupt pathways of Intergenecational poverty In the critical frst LOOO days of a child's life, home-based support for pregnant women, new mothers, care fvers, and infants is provided by com. ‘munity health workers as pat of gov cernment-provided primary health care Yet community heakh workers — who are among the 270,000 (preominantiy back) women delivering ECD services are notoriously underresourced, underpaid and poorly protected. This is ‘mirrored for early earning practitioners ‘who operate largely iformally As they grow older, children are most likely to receive care outside the hhome from an early learning pro gramme. But, as Nation's case lustrates, limited government subsidies means that this access is often reliant on insec- lure parent fees. Currently, only about 15% of the country’s GDP is spent on, ECD, most of which goes to in-clinie health services and child support grants, A mere 6.5% of this budget is allocates! {or early learning, nutrition support and ‘Supportive parenting programmes. ‘Through quality, remunerated and recognised ECD services, we advance the futures of children: create decent jobs and transferrable skills within a ‘women-led sector; and enable many more parents/caregivers (also usually ‘women) to enter the workforce. What this amounts to is areal disruption of how care, power and privilege are dis ‘nibuted in this country, and the ways in which they have concentrated disad- vantage among poor black women and their children, ‘To be a futurist is not just a matter of robotics and big data, but a deeply ‘human endeavour to build the world for generations in the making. x Caregiving is one of the most important contributors to a future productive fabourforce = moma, \ ‘magine a Davos World Economic Forum meeting where none of the leaders have been potty-trained! ‘The thought highlights the hidlen ‘work that is carried out inthe care eco- rnomy, which we define asthe paid and ‘unpaid labour involved in looking after the physical, psychological, emotional, and developmental necds of children and adults. ‘he existence of the care economy, its value in formal economic activity, and the critical role it plays in maint ing labour force and social cohesion, have systematically been undervalued and underestimated. Despite is critical function itis often unpaid ot low paid. informal, and with no employee bene- fis. ‘AS far back as 1995, the UN Develop- ‘ment Programme estimated women's unpaid work to be worth $1-tilion ‘compared to a global GDP atthe time of $23-million, yet it doesnt feaare in any SET ‘economic plan- ning or meas- ‘urement mod- els. Caregiving and conditioning of children from. birth to adulthood is, arguably one of the mast Important contributors to a furure productive labour force. which Is the real wealth of economies, But if we do not consider caregiving as a sector ‘worthy of measurement and funding ‘opportunities, then litte will change in ‘generational reset discussions. It's worth considering the many bar- riers that exist for workers in the care ‘economy. Unpaid or informal work ‘greatly disadvantages workers from achieving economic and financial empowerment. Those who provide labour in the care economy and work in the formal sector have a fine balancing act to navigate and often suffer ftom ‘what the International Labour Organisa- ton defines as time poverty. ‘This presents itself as a barrier to career progression in the formal sector, ‘which in tara hinders personal ‘and financial empowerment. The feedback loops in this existing system ‘need to be broken through finance and investment packages lato this sector. An attempt needs to be made to alleviate the tensions between paid work and family ‘work allowing individuals to reach thelr full potential. Productivity i the paid economy depends on this! ‘All t00 often we see thatin the name of financial austerity, governments cut Spending on community services and childhood development, or we see the private sector dramatically increase health-care costs in the form of medical aids and hospital and nursing homes fees. Mis does not make the need for caregiving disappear. It invariably pushes the work back ino the family, {aking us back tothe beginning of the pegonal franca empowerment ed Toop. Let us rather start seeing the opportunites that financing and invest- ‘ment provision into the childeare and. September22- September 28,2022 ‘One of the main causes of our woeful unemployment rate is a lack of skills. It means a total rethink of how we ‘approach education he most problematic unem- ployment rate in SA is among, ‘our youth: 66.5% for ages 15- 24 and 43.5% for ages 25-35, ‘according to the Stats SA report for the fourth quarter of 2021. The formal sec tor, which makes up more than 90% of ‘economic activity, should have the abil lty to create job opportunities for the L2- million youngsters entering the job mar- ket each year, But anaemic economic ‘elderly caregiving sectors can bring, An effectively trained caregiving sector can assist with job creation, keeping overall, health-care costs lower in society and ‘economy, In her book The Value of Everything, Mariana Mazzucato notes that in mod= ‘ern capitalism value extraction receives: greater reward than value creation, yet is value creation that drives the pro- ‘ductive processes of a healthy economy ‘and society. She argues that we need to drastically rethink where wealth comes from. As we continue to emerge from the pandemic we are reminded of the fragiy fife andthe importance of — a critical com- ponogiimrn ee ome ‘The labour that is given in the care eco- ‘omy could arguably be one of the largest value-creating and wealth-gen- ‘crating activities; without it work in the {ormal sector would not be possible. If we want to rethink the role of fin- ‘ance, let us remember that money can bbe everywhere and nowhere at the ‘same tlme. Generational reset in relation 1 finance should be seeking to make the invisible visible. In the case of the ‘care economy the question remains as to how we can unlock finance and fin ‘ancial products to allow workers to hhave better job and financial security. ‘This all begins with redefining the value of this work. ‘owt, the pandemic and a struggling ‘Gducation system mean that less than 20% of new labour market entrants are ‘projected o cater formal employmcat ‘What isthe roadblock? A lack of skills, Fora start. SA's skills develop- meat landscape has transitioned into a ‘vast but disconnected space, with mul- tiple players from the SA Qualifications “Authority. the Quality Counel for Trades ‘& Occupations and sector education & ‘waining authorities (Seta). “There have been efforts to formalise ‘vocational qualifications in the past. In 2008, the Gccupational Qualifications ‘Sub-Framework was established to replace ‘apprenticeships’, under the aegis ofthe National Qualifications Framework. “The aim was to provide an avenue for direct entry into the workplace for a larger group of students. especially pre- viously disadvantaged ones. These stu- dents would reecive a formal. ransier~ able and recognisable accredited ‘qualification to fall back on oF to use to progress to addtional and higher quali Feations. skilled worker with numer ‘ous years of practical on-the-job exper- fence would get the opportunity to ‘wanslate that into a recognised accred- ited qualifcation, This would have given ‘workers immediate access to the work- place, as well as additional mobility there. But either the implementation of the practical component ofthe pro- sramme nor the subsequent matching to ‘workplace experience opportunities really gained traction, Getting to the root of the problem ‘Our thinking about education, skills ‘development and lifetime learning has also become too fragmented. More importantly, we appear © have missed the mark completely for defining. “success” at each phase in the learning process. Let's follow that fll learning? eocess from its roots, "€ While we know from global research dren off on the right foot, we have litle research about thelr effect here in SA. That Said, separate studies by academics Nich- las Spaull and by Stephen Taylor, Servaas vvan der Berg, Vijay Reddy and Dean Janse vvan Rensburg confirm that educational ‘inequalities from our two-tiered school ‘system start as early as at primary school Unfortunately, a child's experience of ‘education sill very much depends on ‘where they are born, how wealthy they are and [what] the colour of their skin research by Amnesty International reports. So, while privileged children access to high-quality schools and teach- ‘ers may exit school having benefited from fan education system that has nurtured thelr full personal development, most SA learners do not have that privilege. By grade 3, these inequalities have been Showa fo have accumulated into an edu- cational differential of more than three ‘years. By grade 9, the differential is five years. Clearly the trajectory is now firmly ‘entrenched. ‘After primary school, the focus shifts 10 spoon-feeding students to pass examina- tdons and for Schools to reach 100% grade 12 pass rates, with litle consideration of what subjects the students pass or gradu- ate with. Complying with these flow- through criteria influences the subsidies schools and training centres receive from the government. Many of these students centering tertiary education stil have little insight of what field to enrol in, Getting access to a certain field of study is gener ally a function of their school marks (pass ‘marks) and school subject choices. Universities have watered down the core idea of a leaming institution that. through exploring different fields of study across disciplines, prepares students for the world of work and the skills required to find employment and apply their know- ledge in their field of study. ‘The problem is further worsened by the way our Setas function. Theoretically. they act as the bridge between the jobs indus- tries need to fill and the training required to produce that skill set. But the world of work is now evolving so rapidly that applying the old German model of defining the set of skills that a specific job requires and then training individuals to develop those skills becomes more of a barrier than a facilitator in the employment game. How the game has changed ‘The current education and skills develop- ‘ment programmes could never have pre- dicted the unprecedented change that has, September22- September 28,2022 + financtalmatcoza (61) 2° COLLECT/VE INSIGHT been a result of the pandemic and the technological advancements that had 10 be implemented. Consider how many ‘assumptions that underpia their cur ricula have been completely upended ‘over the past two years. More concern. ing. hough. is that turnaround times for ‘updating these curricula are estimated to be between three and seven years, ‘depending on the subject. The education system of today almost ensures built-in ‘obsolescence. ‘There isa growing gobal movement advocating a broader range of skills, ‘competences and values, beyond ‘numeracy and literacy, in educat policies and curricula, Though this is not ‘something new, it has become increas- ingly important as we observed the cffect of Covid, which brought a ‘complete overhaul to the way we live ‘and work. ‘The nature of work during the pan- demic called for more adaptability, problem solving, creativity. resilience ‘and communication. The World Eco- nomic Forum lists these skills, as well as critical thinking, innovation, leader- ship and technology use, as some of the ‘most coveted for the future of work. It predicts a reskiling revolution of people having to be retrained for new job opportunities, the normalisation of remote working, freelance work as the dominant mode of work, and the Increasing use and spread of techno- logy. ‘The missing link ‘What is cleariy missing in al of this is a perspective that says we need to teach Individuals how to learn — about any: thing. at any time in their lives. Educa tion is not something one “passes through’ during the ages of five t0 2 Rather, i's an integral part of one’s life- time development without having to go. back to formal academic structures. Our two years of learning from home during the pandemic have taught us that these avenues are increasing exponentially — ‘we just need to teach our children how to get access to something that should be an ongoing part of their lives. More importantly. we need to teach local employers and their human resources departments not to be so x. ated on formal educational qualifica tions. What they need to start looking for are those candidates who have the potential to constantly “pivot” — to learn ‘and grow into whatever the job of the future requires. What they need 10 provide as employers is the means (and time) for their employees to use the ‘opportunity to develop their personal ‘human capital. I¢s a dramatic mindset ‘change: one that demands that we focus four training on an individual's self-sufh-

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