Forces of Change facing the Food Industry

1. Forces of Change facing the Food Industry Prof André de Villiers 2011

2. Where we come from (analyse) • What we’re faced with today (understand) • Managing our future (implement) (Based largely on: Tincture – passing the buck and bucking the system, André Gadfly and Peter Smacker, 2010. www.tincturesite.com )

4. Talking as: ‘The Ex spurt Gadfly’

5. Africa and South Africa have changed rapidly since 1960 • British imperialism, Afrikaner nationalism, African nationalism • Pressures for liberation from 1960 – many dictators in Africa • The powerful elite rule Africa • Lost: ‘Ideal of democracy in Africa’ (Smuts was a co-signatory when UN was founded in 1947 – ideal still not in place • Communism was a real threat until 1989 • Leopold Scholtz: Gooi wal teen despote, Beeld, 25/1/11)

6. Two Opposing Paradigms • 1994: ANC is established as hegemonic power during Codesa (Anthea Jeffery: The people’s war); Power corrupts, absolute power corrupts absolutely; arrogance of power • The losers: A truly competitive spirit and non-racialism. Stance: Moral low ground (David Bullard: be glad your head has not been knocked off); future more important than past • The winners: A powerful elite, high expectations, entitlement (now it’s our time), retribution for past suffering, BEE must be applied rigorously. Stance: Moral high ground (Everyone must be equal); the past is more important than the future

7. The Constitution – A lighthouse at the Southern tip of Africa

8. The Constitutional Court (CC) • Laws to be implemented by humans; interpretations? • All avenues exhausted before approaching the CC • Value statements of Constitution can be interpreted very differently depending on paradigm (Equality: Western= before the law, in competition; ANC= eventually everyone is same) • Relief only after a lengthy and expensive process • Only those with deep pockets, the indigent and those with ‘sexy cases’ can successfully approach the CC (State of the Nation, David Gleason)

9. Is government subverting our Constitution? • Clear signs that government pays only lip service to the Constitution • Legal amendments & erosion through ordinary legislation (Scorpions) • SCOPA is now toothless; judiciary not independent • Dysfunctional service delivery • Apathy of knowledgeable people

10. Government’s Load • Has increased sharply – from 10 million to 50 million (dependency breeds dependency) – tax base 6-7 million • Rural communities in Europe and the Far-East were not a load on their governments (Schlemmer) • Africa and SA rural populations are not self-sustainable and are rapidly urbanising and becoming government’s burden • The potential job creators are mainly in urban areas (Intellectual capital prefers bright lights) • High expectations plus materialism (fancy cars)(

12. End Result • Highly dependent population • Limited entrepreneurial effort • Race important to government – not to those at grassroots level • Little competence in government (cadre deployment) • Infrastructure falling apart (including legal controls and governances in food industry) • Dissatisfied & apathetic citizens; low involvement of intellectuals • Slow growth economy; unemployment; growing uncertainty

14. Part 2: What we’re faced with today • Growing income and inequality gaps • Powerful elites: both in government and industry • Poor service delivery - denial and blame abounds • A ‘winner takes all society’; arrogance abounds • Jobless growth; demand for ‘decent jobs’? (Chinese?) • Many who are overpaid and many who are underpaid for their competence (are food technologists fairly compensated?) • Complex systems seldom punish the guilty or reward those that contribute fairly (golden handshakes vs retirement)

15. Systems and System Thinking • Jan Smuts: Holism and evolution (1926); first systems thinker • “The individual springs from universal Holism, and all his experience and knowledge ultimately tends towards the character of regulative order and universality” (Smuts, p225). • System: Any structure or process consisting of two or more interactive elements, created for the purpose of realising specific objectives. • We are developing in the direction of: ‘regulative disorder’

17. The Ecological and Resource Sub-system • Global and RSA populations (7 bil; 50 mil); Over-population* • Environmental Burden = Population X Affluence X Tech. • Food security: Low in Africa, RSA declining, rising food prices • Land restitution and security of land tenure; two very different paradigms on land ownership; effect of ‘Kill the boer’ on future food supply? Agricultural policy has negative effects • South Africa remains a mining economy; powerful elite, AMD • Protein: ‘Time to eat the dog?’ (R&B Vale); household the key • Bees (not BEEs); Water quality: E. coli – crops, products

19. The Educational & Knowledge Sub-systems • The ‘human capital development pipeline’ – end streams? • Poor discipline and respect (1976: a watershed, only politics) • High drop-out rate • Mathematics and natural science limitations • Academic/scholarly culture in decline; academic freedom? • Short termism and occupational focus (practice not principles) • R&D in decline (Except: SAN Space Agency); 1,5 researchers vs 11-12 per 1000 in developed countries • Should we have priority research areas for R&D???

20. The Social Sub-system (Zumanomics – Parsons) • Inequality (The Gini-Coefficient: RSA 0,57) • Adult literacy rate (68 vs 90+ for many developing countries) • Low life expectancy (48 vs 70+ for most Eastern countries) • High debt levels (78% of disposable income) • Tendency to stereotype on colour • Clare Graves and the Biopsychosocial Development Model (1970) – developmental stations rather than race count most; lack of communication between different stations a problem

21. The Government and Infra-structure Sub-systems • Cadre deployment policy (Will continue: Zuma- ANC 99th yr) • Cost insensitivity – waste of resources, corruption unstoppable, golden handshakes (SABC: Mpofu+Mokoetle) • Political (legislative), executive/administrative and legal sub-systems without separation of powers; meddling • Lack of work ethic; denial of problems; maintenance lacking • Misplaced priorities (changing names not fixing jails)

22. Government and infra-structure (continued) • Poor service delivery; degradation of infra-structure • Political affiliations rather than competence count (Zuma clean up of civil service) • No urgency, deadlines not met, crisis management abounds • Responsibility not accepted – no accountability (SCOPA) • A complete lack of principled leadership Truly a management catastrophe!

23. The Legal and Security Sub-systems • Violent crime sets SA apart (History of People’s War, lawless mindset) • Police brutality increasing (Growing sense of power) • Powerful elite above the law (Winnie vs a policeman) • Low percentage of successful convictions (jurists not up to it) • ISS: Criminal (In)justice in SA = NPA key problem • SANDF: deployment capacity limited

25. Part 3: Managing the Future • Scenarios not forecasts; being more or less correct better than being totally correct or totally wrong • The Dinokeng Scenarios – 2009; A think tank (www.dinokengscenarios.co.za) - Ramphele Mamphele • Bear in mind ‘Sustainability’: Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet theirs

27. Thinking • “What I propose, therefore, is very simple: it is nothing more than to think what we are doing” (Hannah Arendt, German-Jewish philosopher, 1958) • What we’re doing to each other, our economy, our ecology, our grandchildren’s future, our democracy, our future on this planet (the only habitable one in the cosmos). • I propose that we also start doing what we are thinking! (P) • Do we ever allow any time for it???

28. Triple Bottom Line • Social Imperatives: • Satisfy basic human needs • Health and safety of people • Increase equity & empower • Increase local self-reliance • Guarantee participation and accountability Social Equity • Economic Imperatives: • Sustain economic growth • Maximise private growth • Expand markets • Internalise costs (it is ethical) • Efficiency and Productivity • Shareholder value IntegratedSustainability Economic Prosperity • Environmental Imperatives: • Respect carrying capacity • Conserve and recycle capacity • Reduce wastes/ product design • Biodiversity • Ecosystem integrity • Appropriate technology Environmental Quality

29. Anti-intellectualism vs Scientific mindsets • The process of dumbing down degrees and qualifications to fit (quick) fixed outcomes; academic freedom? • A degree at Wits for Sangomas (Witchdoctors), Power balance bracelets; Muti murders in RSA • Alternative medicines, homeopathy, chiropractice, slimming aids • Indigenous knowledge of plants with active substances (Hoodia gordonii, ‘Kougoed’, sweeteners) • Risks of food poisoning will increase (Luandle, Cape – ‘expired 2003 food’ - Jan 2010)

30. The importance of Intangible Assets in an Enterprise

31. Intangible Asset Management • Knowledge: only valuable when it is harnessed and used so that it creates value (in the enterprise) • Difference between Knowledge management and Information management (Managing competence vs making decisions) • Negative effects of shortermism, quick fixes and super-charged career expectations • If you can measure it you can manage it • Requirement of understanding the processes and the competencies to deliver each product/service

32. Intangible Asset Management vs Technological Fixes Paul Strassmann* states: “…it is not computers that make the difference, but what people do with them. Elevating computerization to the level of a magic bullet of this civilization is a mistake that will find correction in due course. It leads to the diminishing of what matters the most in any enterprise: educated, committed, and imaginative individuals working for organizations that place greater emphasis on people than on technologies” *(The squandered computer – debunking Grosch’s 1965 law about cost and computer capacity; much of the research was in USA food corporations)

33. "The guy who invented the wheel was an idiot, the guy who invented the other three he was the genius”.

34. Intangible Asset Management – Managing the Higher order competencies of a business • Fusion competence: Opportunity identification, Leveraging opportunity, Initiative and Strategic direction • Technological competence: A product or service to be delivered (factory processes) • Business process competence: A delivery structure • Network competence: Relationships along the value chain and in the market • Human competence: People to produce the output (Brains 90% + Brawn 10%)

35. Challenges facing Food Technologists • The need for professionalism – is it ‘good (sustainable) business and also good HACCP practice’? • The necessity for integrity and ethics – admit mistakes • Design of food products: adding the right amount of value for the market (minimal packaging, semi-processed) • Poisons, residues and additives • Recycling, reuse, landfill impact

37. So how should South Africans think? • The future, not the past is what counts • Our future is in our own hands • Don’t allow politicians to rule us – we rule them!!!! • If they don’t perform, fire them!! • Your vote is your strength • You have responsibilities as a citizen.

38. “I would ask the oracle how we as civil society could best learn to be better stewards of democracy. Because we get the leaders we deserve. I would ask the oracle how we could re-inculcate the values that drove so many of us to sacrifice so much for this democracy to be born. A dream that has been replaced by rampant materialism, greed, corruption and total disrespect for basic human values… We need to get back what we have lost.” ( www.dinokengscenarios.co.za , 2009)

39. It’s about values and paradigms • Richard Dowden: Africa – altered states, ordinary miracles - p336 “In Africa traditional concepts and social controls have been weakened or forgotten, but they have not necessarily been replaced by a new moral code to fit the world’s new realities” • In Science truth is absolute and normative; in African culture truth is very relative; mystical rather than scientific mindset • In ‘truly developing’ countries: ‘Leaders create a better tomorrow’; the work ethic and competence counts • In backward countries: Low respect for life, failing infrastructure, materialism, greed, expectation of miracles

40. Democratic System Requirements • Responsible and Accountable leaders (sound governances, create trust and certainty, not cowboys) • Responsible, & educated/informed voters – demanding performance and discipline (financial and moral) • ‘How’ not ‘who’ of ruling party (Africa and strong leaders) • Investment culture (labour laws, human capital, ethics, government supportive (can’t create jobs)) • Transparency; information used intelligently (illiterates?) • Discipline in the system; shame don’t reward misdeeds!

41. “We the people are the rightful masters of both (Parliament) and the courts, not to overthrow the Constitution but to overthrow the people who pervert the Constitution” (Abraham Lincoln, Congress replaced by Parliament) Do you realise that the government is perverting our Constitution in many ways? Can you recognise a perversion? Are you willing to do something about it?

42. Note from Israeli prime minister to the Egyptian government in February 2011: “Please don’t break down the pyramids - we’re not going to help you again!”. And South Africa? That’s it - Thank you!