500 NEWS

By Daniel Schwartzkopff, Co-Founder: DataProphet

The Fourth Industrial Revolution will dramatically reshape the world of work and force us to rethink our approach to our careers, our lives, and our aspirations. With a global market estimated to reach $70-billion by 2020, machine learning is driving fundamental change in the way every industry operates. Learning algorithms are already pioneering advances in customer service, manufacturing, healthcare, auditing, legal counsel, and insurance underwriting, with more industries to follow.

Old notions of job security have all but disappeared: the thought of working for the same company for 40 years until retirement is laughable. In 1965, corporations remained in the S&P 500 Index for an average of 33 years; by 2012 this had already shrunk to 18 years. With the rapid pace of development bankrupting and displacing large behemoths like Kodak and Blockbuster, no one should be under the illusion that a company is too big to fail.

The rise of the machines

In PwC’s latest report on the impact of automation, up to 38% of jobs in the US are at risk, with Germany (35%) and the UK (30%) not far behind. And it’s not manual labour that is most in peril: accountants, lawyers, call centre agents, machine operators, and insurance underwriters are at or near the top of lists of jobs most likely to become redundant, thanks to machines.

In response, it is likely that the governments will start implementing policies to protect an already fragile job market. However, the commercial benefits of automation are vast and far-reaching. In an example recently cited by the World Economic Forum, a Chinese factory in Dongguan City replaced 90% of its workforce with machines, leading to an incredible 250% boost in productivity, with defects reduced by 80%.

Governments need to take a more forward-looking approach and find innovative ways of incentivising and equipping people to educate themselves. Learning the types of skills unlikely to be replaced by machines in the coming years is critical – especially here in Africa.

South Africa and Africa most vulnerable

South Africa’s latest unemployment figures paint a bleak picture: the official rate is 27.7%, or 6.2 million people who want to work but can’t find employment. A closer look, however, will reveal that the vast majority of the unemployed are without a tertiary education. Among graduates the unemployment rate is a mere 7.3%.

To help stimulate job creation, government and industry have worked hard at establishing a business process outsourcing (BPO) industry as a key job creator and economic driver. One industry body claims the sector already employs more than 30 000 people, and aims to grow this to 80 000 by 2021.

Considering most of the outsourced jobs are in call centres and customer service, it is alarming that so much effort is being put into industries that are most at risk of automation.

Across the continent, explosive population growth is expected to bring a further 122 million people into the workforce by 2020. Due to shortcomings in the continent’s education sector, these workers are likely to be overwhelmingly unskilled or semi-skilled. Absorbing 122 million people into formal economic activity will be paramount to the continent’s on-going development and prosperity.

We need an urgent change in how we approach skills development and work.

Rethinking our approach to work

Those wishing to future-proof their careers should stop relying on traditional notions of work. Many of the skills required for the future – such as data science and machine learning – are not yet formally offered at university level, and even where they are, the industry changes so quickly that by the time a student exits a four-year degree, much of their knowledge is already outdated.

In response, we should all aspire to a lifelong approach to learning. Developing skills in the STEM (Science, Technology, Engineering and Maths) fields, as well as arts and humanities – where machines will struggle with replicating design, creation, empathy, and problem-solving thought – represents workers’ best defence against automation.

Taking up online courses in specific fields that teach you marketable skills, for example, is one cost-effective way of empowering this new wave of jobseekers. Encouragingly, many modern tech companies no longer look solely at academic transcripts and qualifications as the main benchmark of employability. Instead, practical tests are given that gauge a candidate’s actual ability to complete work-related tasks and think creatively and laterally.

New skills for new jobs

This shift in skills development and training may pose severe challenges to those job seekers who are unable to pursue self-learning opportunities. Government, schools, and universities should therefore modernise their approach to training and education to ensure our immense talent pool is not left under- or unutilised.

It is certain that some jobs will be disrupted – even eliminated – by automation. Workers will need to develop a new mix of skills to meet the demands of entirely new job functions created in the course of our technological progress. Opposing progress to preserve automatable jobs is futile – it would not be wise to be remembered as the Luddites of the 21st century.

In a positive sign, 94% of executives surveyed in a recent study agreed that when administrative tasks are automated, the demand for jobs that require soft skills, such as creative problem-solving, collaboration, and communication will grow.

It’s high time we overhaul our education and skills development sector. The alternative – millions of unemployed and unemployable people – is too frightening to contemplate.

Requisite Organisation (RO) is the name given to a holistic body of work that offers proven principles and practices around how organisations should be designed and operated, based on building and maintaining strong relationships aimed at achieving goal directed outcomes.

The following three strands and their specific characteristics constitute a requisite organistaion:

RO, also referred to as scientific management, was pioneered by Dr Elliott Jaques and developed into an integrated set of models, tested principles and global applications across different industries over a period spanning more than fifty years.

RO comprises three integrated facets: Structure, People and Leadership and has documented applications globally, across industries such as Defence, Telecommunications, Mining, Energy,
Construction, Health, Government, Financial Services, Hospitality and Religious Organisations.

This article will largely focus on the first strand – that unpopular but necessary topic of hierarchy and using levels of work complexity, the vertical axis of organisational design. Hierarchy remains the most efficient way of structuring an enterprise, if its basic principles are understood. It is not about power or prestige, but about adding value.

Some theory – The growth of organisational complexity

Organisations are complex adaptive systems and evolve by creating, adding, modifying or discarding pieces on their journey. New levels of work emerge to meet demands generated by higher level of contextual complexity, which may be self-directed or environmentally imposed. Organisations continually shape shift in response to their environments.

The Nobel Prize winner, Ilya Prigogine’s work showed that any system, in response to increasing energy, would eventually implode (fail) or transform to something new at a higher level of complexity. Ashby’s Law of Requisite Variety states that internal complexity must match internal conditions and no perfect state is ever reached or reached for long.

This messy, unpredictable and stressful process of transition offers no guarantee of success. Failure is all too common, but when successful, a new order emerges and a new level of work complexity is created; the organisation moves into a new state of existence.

Successful organisations become more complex over time. Nature abhors scarcity and equilibrium, loving abundance (growth), seeming chaos and simplicity of design.

Levels of work complexity

RO states that in order for an organisation to be successful it needs to have clearly separated Levels of Work Complexity, with each theme performing unique functions:

The Added Value Domain is where operational efficiency, productivity and expertise are critical. It is where most businesses operate and is focused on achieving outputs in the most cost effective manner, providing efficient services and being able to respond or initiate quickly.
Work is about serving a known client base with known products and services and asking if the systems, processes and procedures are still doing what they should be doing and if it is possible to do them more effectively.

Here, pride in the work, its quality and delighting customers and guests is important as it holds reputation, brand and image.

The second “work chunk” is the Innovative Domain and is the executive levels of management. Here strategic direction is set and frameworks created to take the organisation forward over a time span from three to ten years. This domain is responsible for stakeholder and shareholder relationship management, the forging of joint ventures, new products, services and innovative ideas. This is the top end of an independent company or division within a large group. There are two work levels found within this domain.

The third domain is concerned with the management of multinational and global enterprises and has two work levels. The Values Domain is about shaping business units within their individual contexts, sensing changing values, nascent trends and patterns and making them tangible and real to stakeholders and shaping institutions that are able to interact with these new forces.

Changes at these levels are across boundaries and cultures and deals with multiple and diverse unified whole systems. The impact of decisions made at this level may not be felt for 50 years.

Descriptors of work level

Work Level I or Quality is defined as using skills and training to produce an output that is largely prescribed, tangible, measurable and meets a specific need, within a specified time. This work is critical because it ensures the organisation’s viability and represents the first point of contact with the public and needs great care and attention.

Pride in work is hugely important, as is the understanding of products, the value of the company and being embodiments thereof. This Level of Work involves managing oneself or an immediate team on a day-to-day basis.

Roles in this work level would include team leader or supervisor. Work is in the now, with short time spans.

Work Level II or Service work is the application of knowledge and experience to a particular situation or issue. This includes ensuring availability of resources, dealing with and resolving issues so that image and reputation of the organisation is enhanced. This would all take place within the prescribed boundaries and available resources. The concern remains to ensure Quality outputs when managing a permanent team or being a specialist.

Roles in this work level include the first level of full-authorised line managers. Such roles are accountable for task assignments of the team; use of resources and equipment, setting an annual budget, ensuring adequate team members and approving expenditure. It is also the first level where we find specialists and professional services (accountants, doctors, scientists).

Work Level III or Practice is the work theme of senior management and is concerned with the co-ordination, integration, planning and management of people and resources in order to achieve specified outputs in an optimal manner. The issues of systems of work becomes a unique value add at this level.

Roles in this work level include managers who meet, liaise and co-ordinate their work with that of other managers at regular management meetings. The span of decision-making may be at a maximum of two years.

The two executive work levels – Strategic Development (Work Level IV) which translates the strategic intent of an organisation into business plans, performance and operational objectives, manages continuity and change and Strategic Intent (Work Level V), which sets direction and is accountable for viability, establishes governance and regulatory frameworks – are held in a state of dynamic tension. This is where GMs are found (Level IV) and CEOs or MDs of a division of a multinational or international.

Jacques’s research and that of others shows that over time an individual’s capability unfolds at a predictable rate and generates the need for different and larger work challenges as our way of processing information changes. This deep organic need to seek new challenges is often unnamed, but it is a call to adventure that cannot be ignored.

As our capability for decision-making unfolds so our need for challenges increase. In response we seek different roles (paid or unpaid) with greater complexity. This rate of change differs from individual to individual, but all take place within seven Growth Modes. Depending on our Growth Curve we move through different transition points at different ages, entering and growing into new levels of cognitive complexity (our ability to handle ambiguity and uncertainty in exercising judgement when we do not and cannot know the details) and thus work themes or levels.

Entry and exit transition points from each cycle can be traumatic, if we are finding ourselves underutilised. If we are in flow, meaning we are appropriately challenged and enjoying what we are doing, we hardly notice this transition. Sadly, too often this is not the case. The challenge is finding the right roles at the right time. If we do not we become underutilised (not using our given capabilities to the full) or overextended (the work challenges take us out of flow and make us uncomfortable).

“Flow” is a sought after state when we are really connected with our work challenges (paid or unpaid) and find life is fun, stimulating, meaningful and often reflects periods we look back at with fondness. We often tend to forget ourselves during such periods as time and work and fun become one.

This is illustrated in Figure below, the “Flow” graphic below used in the management of Talent Pools: Organisations often map the capability of their talent pools to meet current and future organisational needs. The key reason for this is to ensure availability and “flow” between tasks and those with the need for the challenge.

However while this capability for dealing with complexity is essential it is not the full picture – employees also need to have the knowledge, skills and experience to deal with the specific role. They should value the work (want to do it) and have wisdom (or EQ) to do it in such as a way as to cause no harm.

The importance of managerial leadership

Requisite Organisation has, through its research and observations, identified a number of core managerial leadership competencies that need to be used in daily and longer-term practices. Many of these practices are aimed at building trust and fairness. RO is formal and clear in the use of how to design a business from the ground up, including structure, role types and authority and accountably mapping to role type; as well as the minimum necessary managerial authorities and in effective tasking.

The Requisite Leadership competencies are regarded as basic essential skills for all who lead a team. All managerial leaders need training to understand the basic competencies and practices needed to be an effective managerial leader. Some examples of these core competencies are:

In conclusion a requisite organisation means doing business with efficiency and competitiveness and the release of human creativity (Jaques, Requisite Organisation, 1992).

The green movement has been long in the making, although it has only recently been adopted as a way of life and indeed, the ‘it’ thing. From your living room, to the South African economy, sustainability is creeping into the very way we live our lives and interact with our surroundings.

These days, an object in a store or online is a part of a long value chain that touches our lives in many more ways than we realise. Where the materials were sourced, how the product was manufactured, packaged and transported all form a part of its story, a story that will come to shape the future of our planet. It is the need for sustainability that has driven many conceptual designers and innovative entrepreneurs to present solutions to some of the most pressing challenges we currently face. As consumers and a country we have many needs, this presents itself as a double-edged sword: how do we meet our needs, but do so in a sustainable and energy-efficient way?

As a developing country, we have a long way to go as far as infrastructure is concerned. The State has already made a lot of funds available for this purpose to address shortfalls in housing, education and healthcare, among others. It is our responsibility however to ensure that we push for these projects to be conducted in such a way as to put minimal strain on the already fragile environment.

Many individuals and organisations have stepped up this challenge, setting an example of how we can be greener. Similarly, innovative designers, who take sustainability very seriously, have blessed the world of interior, industrial and fashion design. Stunning fabrics made from sustainable sources demonstrate that we don’t necessarily have to compromise on aesthetics or convenience.

Making the green choice is by no means easy. It takes time and energy to find solutions and to challenge the status quo. In our fast-paced world, dominated by insatiable consumption needs, manufacturers and suppliers are producing faster than ever, delivering cheap products whenever and wherever we want them. But it might be time to consider that a little extra time and money right now, could be an enormous investment in our future.

The world of interior, industrial and fashion design has recently been blessed by some of the most gorgeous and innovative products for your home, wardrobe and office. Being green has never been so sexy and so smart!

Many sectors are also benefiting from green innovation that is reshaping the way we think of construction and infrastructure.

Hemp has been used as far back as the Stone Age, from textiles to paper. Recently it has gained a lot of popularity and is slowly finding its way into the daily lives of countless people. Hemp products ranging from moisturisers to clothes are now available in many stores and online. What is particularly interesting though, is that hemp has proven itself to be a heavy weight in the construction and industrial space.

It may come as a surprise that this sometimes misunderstood and controversial species of plant can be used as an effective and eco-friendly component in building and construction. Hemp can be used to create building materials that are non-toxic, extremely resilient and puts very little strain on the environment.

The fibres of the plant, when mixed correctly and under the right temperature and pressure, can be turned into a heat- and fire- resistant building material that can be used for flooring, ceilings, walls and insulation. The benefits of using something like hemp in building materials could have a very big impact in our country. It could create a completely new, unexplored industry, bolster agricultural activity and create many jobs and businesses.

It has been estimated that the concrete industry is one of the largest contributors of carbon emissions worldwide. High corporate taxes on carbon emissions are gaining ground overseas, and many experts agree that pressure on these companies will only increase as society starts backing the green movement. This is exactly what is exciting about going green – we have challenges, but there are many, many solutions.

Some industrial designers have even used hemp pulp to build some seriously stunning furniture. The designs are often sleek, stylish but warm with earthy tones. This shows that going green doesn’t mean you’re compromising on luxury and style. You can fill your home and office in a way that complements the environment and your own personal taste in aesthetics.

Only using eco-friendly materials won’t alleviate the impact of construction on our environment. The methods and techniques of construction should also reflect the materials used to ensure that every step along the way is eco-friendly. Often it is the water used, or energy consumed that makes building and construction projects harmful to the environment.

Eco-friendly construction techniques include salvaging old materials that what would otherwise be considered waste or using clever masonry techniques in which to optimise strength and durability but reduce the amount of actual materials that is used. Good examples of this include salvaging plumbing parts that are usually discarded; or even crushing old brick, concrete or stone to use as a supplement for sand usage. Being clever with what you have, can go a long way in saving you money and time.

There are many materials and techniques that have been identified as being eco-friendly. Arguably one of the most interesting materials is bagasse. Bagasse boards are made from leftovers in the production process of sugar or sorghum. After the plants have been crushed to extract all their juices, there remains a fibrous waste – that would otherwise be discarded. It is then used to make boards and panels for building purposes. The best part, bagasse can also be burned for heat and fuel with a clear conscience, as the burning process emits less carbon dioxide than the plants absorbed while growing.

Necessity is the mother of invention, it’s been said. This has never been truer than it is today. It has been estimated by Greenpeace that fast fashion is doing a lot of damage to our environment. The organisation reports that a single pair of jeans takes around 7 000 litres of water to produce. Considering that around 2 billion pairs of jeans are manufactured every year, it’s not hard to see the damage that we are doing. The example of the jeans is only the very tip of the iceberg; and soon we will have no other choice but to seek out alternatives in the textiles that we use.

You can indulge in those leather jackets and shoes with not a trace of guilt. Not to be confused with the polyvinyl chloride varieties (PVC), real vegan leather is often produced using kelp or cork – it’s almost impossible to imagine that! Cork especially, produces a stunning leather alternative, which can be used for anything from a handbag to a belt; some designers have even created beautiful office stationary using this gorgeous material.

It makes sense to seek out alternatives for materials such as leather. The tanning process involved with the production of leather from animal hide has a devastating effect on the
environment, something that very seldom reaches mainstream media. The number of animals that are slaughtered, the water that is wasted, the toxic chemicals that are used in tanning all make for a convincing case to try an alternative.

Choosing eco-friendly materials has a bigger impact than you may initially realise. The True
Cost initiative has reported that more than 90% of cotton used in textile manufacturing is genetically modified; and cotton farming is now responsible for 18% of the world’s pesticide use. Not to mention that the amount of chemicals used to bleach or dye genetically modified cotton is still relatively high, which is scary considering that your skin is the largest organ in your body.

When choosing your eco-friendly material remember that even textiles made from bamboo, hemp or organic cotton, may still be bleached with heavy chemicals or sourced from unsustainable land; so always research the product thoroughly; and ask all the right questions. Choosing products that have met strict criteria also encourages a market that remains transparent, ethical and sustainable.

Alternatives for certain materials will have to be adopted to ensure sustainability for consumers going forward. PVC for instance, is made up of highly toxic ingredients, which during production emit equal amounts of toxic waste into the air, such as dioxins and mercury. In order to make PVC usable and stable, lead and other toxic ingredients have to be added to the already 75% chlorine content. The problem is that no matter where PVC is in its life cycle, its very, very bad news: dangerous to burn, dangerous to put in a landfill, extremely difficult to recycle, the list goes on and on.

Moody’s Investors Service recently announced their confidence in the renewable energy sector in South Africa. According to the agency, South Africa had the highest year-on-year growth in the renewable energy sector in the world. What is particularly positive to take note of is the fact that this sector attracted a significant amount of foreign direct investment into the country,
demonstrating the confidence investors overseas have in the viability of non-traditional sources of energy.

According to a recent study by Friends of the Earth International, 82% of Africa’s energy is supplied by the use of fossil fuels. However, this number could be very different if we were to exploit the non-exhaustible resources that we have on the continent, such as sun, wind and water. In fact, it has been estimated that through solar power alone, Africa could meet around 70% of its energy needs; an additional 18% could be met if we exploited the power of the wind.

South Africa could, by the year 2050, meet an impressive 60% of its energy needs through solar energy; and according to a recent study by researchers from Stanford University, the job opportunities that would be coupled to this is significant, currently estimated at around 600 000.

The study also found that, with a combination of traditional rooftop solar panels, solar plants and CSP plants, the country could meet 100% of its energy needs by 2050.

Noupoort Wind Farm has started operations this year, with an output of 80 MW over an area of 7 500 hectares, which will meet the needs of 70 000 households. The wind farm is situated in Northern Cape and cost around R1.9–billion to build and it is an exciting look at what the future may hold. What makes this project particularly impressive is that operations not only started on the scheduled date, but it was also built completely within budget.

Projects like Noupoort Wind Farm come from the government’s initiative in which it has identified the high level of renewable energy potential in the country. The government has introduced several programmes in the hope of reducing the consumption of traditional energy. The Clean Energy Programme, for instance, will spend around R1.2-billion on 131 146 solar powered
heating units; and over R600-million to subsidise the installation of power-saving lighting in public spaces. South Africa is making wonderful progress on these kinds of projects, and currently it is estimated that we have already achieved 29% of our target for renewable energy sources for the year 2020.

The shipping of containers celebrated its 20th anniversary this year. The concept to use containers to transport goods was developed by trucking entrepreneur Malcom McLean of North Carolina in the US in 1955. He realised that the ability to lift a container directly from the ship to the truck, and vice versa, without having to offload the contents within, was a much simpler solution to cargo transport. This resulted in the next 50 years of international cargo transportation and trade.

Globally and in South Africa

The shipping industry has made headlines in the last year for its decline in growth due to the worst-ever market conditions it has faced since the inception of global shipping trade. Since 96% of South Africa’s exports are conveyed by sea, the challenges the industry faces globally impact directly on our country’s economy. South Africa trades via sea with neighbouring southern African partners, Asia, the Americas and the east and west coasts of Africa, relying on this trade to boost our economy and export levels.

Sub-Sahara Africa’s largest and busiest shipping terminal is the Port of Durban, referred to as Durban Harbour, handling up to 31.4 million tonnes of cargo each year and generating more than 60% of revenue in South Africa. Durban Harbour welcomes approximately 4 500 vessels and 83 000 shipping containers yearly, as reported by BusinessTech in 2015, and conducts trade worth over US$45-billion. A total of 57% of container traffic in South Africa goes through Durban Harbour.

Container traffic in South Africa is handled through installed capacity of about 4.8 million twenty-foot equivalent units (TEUs) in the system and dedicated terminals in the Ports of Durban, Ngqura and Cape Town. The overall installed capacity at South Africa’s container terminal stands at 60%. Durban Harbour is the only port which completely occupies its design capacity for containers – 3 020 000 TEUs out of
3 020 000 – while Ngqura has 491 442 out of 2 800 000 (18%) and Cape Town 900 000 out of 1 500 000 (60%).

A history of containers

The international standard for container size was issued in 1961. Commonly referred to as TEUs, container dimensions set by the International Organisation for Standardisation (ISO) are 20 feet long, 8 feet wide and 8 feet 6 inches high – that’s 6.09 metres long, 2.4 metres wide and 2.6 metres high respectively, in metric terms. The first converted container ship to carry cargo across the sea, Fairland, left from Port Elizabeth in the US to Rotterdam in the Netherlands in 1966 with 236 containers on board. This marked the beginning of global shipping trade, an industry which grew faster and more exponentially than expected. In 1969,18 container vessels were built, 10 of them with the capacity of 1 000 TEUs. By 1972, container vessels could fit up to 3 000 TEUs on board. Today, the biggest container vessel ever built, the Emma Maersk, can fit 15 200 TEUs on board.

The 1970s and 80s saw connections open between Japan and the US west coast, and Europe and the US east coast. Further than that, the Europe-Asia route began to be serviced by a group of carriers sharing ship space and by the end of the decade, shipping between Europe, Southeast and Eastern Asia, South Africa, Australia/New Zealand, North America and South America were all largely containerised. By 1983 there were 12 million TEUs all over the world, including the Middle East, Indian subcontinent and East and West Africa where containers began to arrive.

It was recorded in 2012 that there were 32 million containers scattered across the world – out at sea, on-board trucks, travelling along a train line or waiting in loading bays. Shanghai, China is the world’s biggest and busiest container port, taking over from Singapore a couple years back. According to Forbes, mainland China ports account for 70% of the top 10 ports in the world, with the Port of Shanghai handling the majority of China’s containers.

Technology and shipping

Technological advancement has, over the years, been a hot topic and closely followed within every industry of every economy in the world. Technology is innovating and disrupting what we have always known and the benefits that come with it can certainly be used to advantage within the shipping and container industry – especially when considering the industry’s undeniable slump early in 2016 due to China’s trade slowdown. There is small irony to be found in the world’s oldest globaliser – the shipping trade – relying on the modern world globaliser – technology – for its transformation.

Technology has taken over the world due to its efficiency in driving production, lowering costs and considering the environment, amongst many other benefits. The new technology that has become available for shipping containers has advanced so significantly over the years that the options may seem daunting, particularly for such an old industry.

Traditionally, shippers have needed both satellite and mobile technology, with two separate pieces of equipment to enable that dual-usage. Mobile technology offers real-time data – satellite too – but at a cheaper rate and covering less of the world. Satellite tracking, although more expensive, covers up to 98% of the globe and is the preferred method of choice should cargo have to travel through more remote parts of the world with little to no cellular coverage. Technology has evolved to enable functioning of both satellite and mobile components in the same device, keeping the carbon footprint and cost of equipment manufacture as low as possible. Machine-to-machine (M2M) equipment is one of these innovative solutions, which allows separate pieces of equipment to communicate wirelessly and frequently, without human intervention.

In March this year, French shipping giant CMA CGM unveiled 18 000 climate-controlled containers aboard one of their vessels, all boasting brand new technology. Using the Internet of Things, each container is ‘smart’ and is able to connect and share information such as temperature, location, humidity levels, attempted break-ins, breakages, vibrations and custom clearance status with other containers, the crews’ mobile phones and the company’s headquarters.

Another notable advancement in monitoring the inside of the containers during transport is the use of the piezoelectric effect, by which certain materials generate an electric charge in response to applied mechanical stress: vibration sensors can pick up shifting cargo or help spot stowaways, and are powered
by the very vibrations they were designed to detect. Low-powered sensors then relay this information to port authorities before the arrival of the container, leaving no room for nasty surprises.

Containers are usually scanned at ports to check for illegal and harmful substances and/or, cargo; however, shipping containers are generally made from corrugated steel for extra strength and penetrating a metal such as steel requires high-powered X-rays, even gamma rays, and proves too expensive and often dangerous. In 2014 at a meeting of the American Association for the Advancement of Science in Chicago, Dr Stephan Lechner of the European Commission’s Joint Research Centre in Italy proposed making containers out of carbon-fibre composites.

Containers would be lighter and could, if designed properly, fold in to a flat sheet when empty, saving space; an additional and perhaps the most important perk of a carbon-fibre container is that it can be scanned easily with soft X-rays – which are easier to generate and less dangerous to use – without having to open it.

Containers are particularly well travelled

In 2008, the BBC started tracking a container, dubbed the BBC Box, in order to better understand the distance a container travels, the routes it takes and the challenges it may encounter. The study aimed to shed light on international trade and globalisation (and was open for the public to follow online) – according to Rose George’s Ninety Percent of Everything, containers “have fuelled if not created globalisation”.

Fitted with a tracking device and painted with the iconic colours and logo of the BBC, the Box was followed for a period of one year, as it was transported by the Nippon Yusen Kaisha (NYK) shipping line
using intermodal freight transport with various cargoes.

Starting off empty, the Box travelled to its first destination and was shortly filled with its first
load – 15 120 bottles of whisky from Glasgow to be transported to Shanghai, China. Once the contents were offloaded in China, the Box was refilled with tape measures/cosmetics/gardening products and transported to the Port of Los Angeles, USA via Japan and the Pacific Ocean.

It was then transported by rail from the Port of Los Angeles to New Jersey and by road to Pennsylvania. From there the Box went to New York City where it was filled with ink/spearmint flavouring/additives/
polyester fibre and redirected, by sea, to Santos, Brazil. Monosodium glutamate and auto parts were loaded into the container, which travelled via the Cape of Good Hope and Singapore. It was reloaded at the Port of Hong Kong and sent to the Port of Yokohama, Japan where it stayed for a few months from April to July 2009, and was loaded with various consolidated cargo destined for Laem Chabang, Thailand.
The container received its final load of 95 940 tins of cat food at Lat Krabeng, Bangkok, Thailand, on
25 September 2009 and was destined for arrival at Southampton, United Kingdom – its departure point one year earlier.

The BBC Box travelled for a total of 421 days, covering a distance of approximately 83 129 km. Of those, 75 761 km were done by ship, 5 196 km by train, 2 171 km by road – a cool 2.08 laps around the world. The BBC and their project partners, NYK, decided to donate the container to charity at the end of the project and sent it to South Africa, in the Cape Flats, and turned it into a permanent soup kitchen for those who were most affected by the global recession in 2008.

Containers repurposed

Even old, battered, well-used shipping containers have a second chance at life. Repurposing old containers has become somewhat of a trend over the years. They’re strong, mobile and stackable, making their uses various and unlimited. If you type into Google “what can you do with shipping containers?” over four million search results come up, all demonstrating the various uses of old shipping containers.

Brad Berman, of Berman-Kalil Housing Concepts – a Cape Town-based company specialising in the utilisation of old shipping containers to build inexpensive, high-quality sustainable housing – is an expert in the field. In a place like South Africa where basic housing and unemployment are major problems, the use of second-hand containers, which can no longer be used for their intended purpose, could transform a community and improve the standard of living. Container homes can replace informal housing, shacks and settlements to provide safer and better quality housing – as well as clinics, schools, stores and almost any other structure.

In 2014 Maersk caught on to the trend and subsequently branched off with a sideline establishment, Maersk Line Container Sales, to provide customers like Berman with second-hand containers. According to Rune Sorensen, Managing Director of Maersk’s new company, “the market doesn’t know itself”. This means that people are still exploring the industry and the uses of shipping containers.

How containers work in 10 steps

1. A South African shoe store places an order with a Chinese manufacturer in China for 500 pairs of the latest, trendy shoe. The shoe store collaborates with a freight forwarder to arrange transport of the shoes from China to South Africa.

2. A trucking company arrives at the Chinese manufacturer and loads the 500 shoes ordered by the shoe store, as well as any other cargo from various other companies arranged for the same shipment. The container is bolted shut and fitted with a high-security seal. The next time the container is opened is at the distribution warehouse in the destination country, unless customs officials decide to inspect the load beforehand.

3. The truck carries the container to the closest and most accessible, efficient and appropriate port for it to be shipped. The freight forwarder usually has a contract with a shipping company and all documentation about the shipment to government authorities in the exporting and importing countries. It includes information on the exact cargo contents, the exporter, the importer and who is transporting the cargo.

4. The container, which holds the 500 pairs of shoes destined for South Africa, is loaded onto a container vessel.

5. A few days before arriving at the destination point, the captain of the vessel provides a report to the government of that destination country that details the ship, its crew and its cargo.

6. The vessel has to receive proper clearance before it can enter the port. Once it has received permission, the vessel docks at a berth adjacent to large cranes that are used to unload the containers of cargo.

7. Dockworkers arrive at the ship to get to work.

8. Customs officials who have specified information pertaining each container have the authority to further inspect any containers.

9. Once the container carrying the 500 pairs of shoes for the shoe store is cleared by customs, it is loaded onto a truck trailer and can be transported to the distribution centre.

10. From the distribution centre, the shoes are separated from the rest of the content to be packaged separately for delivery to the shoe store.

Despite tough trading conditions across nearly every sector of South Africa’s economy, there are still companies who continue to demonstrate a commitment to corporate social investment (CSI). Here are South Africa’s most generous companies…

Several rich South Africans looking to get their hands on U.S. investment visas more than doubled over the last three years. During economic and politically unstable times, many South Africans are considering the benefits and advantages of having an exit plan.

When Asher Bohbot founded technology services group EOH Holdings 19 years ago, he instilled an ostensible company culture that is lived and breathed by every EOH employee – from the top executive to the mailroom clerk.

He still considers a definitive ‘company culture’ as the concrete foundation (or building blocks) for any organisation that strives to be successful. EOH has delivered impressive returns for shareholders for many years, and Bohbot’s influence will be sorely missed (he’ll step down as CEO at the end of June). During his keynote speech at our Top 500 Awards earlier this year, Bohbot shared with delegates his six key secrets to starting and managing a successful company. They are:

#6 BUSINESS CONDITIONS: “There is no good or bad reality, only reality. If you are willing to say: “This is the reality. I’m going to grow and develop my business, and look for new opportunities within the current economic conditions, then your company will enjoy grow! But if you’re going to sit around and wait for conditions to be conducive, I can guarantee you that your business won’t be around for long. There are no good times, no bad times, just the conditions that are prevailing now. As a business, you have the responsibility to say, “How am I going to grow the company in these conditions?” We don’t know if conditions will ever improve, so make the best of what you currently have.”

Despite the headlines, foreign and local investors should not lose sight of the fact that South Africa remains a highly attractive – and sound – investment option. But which sectors offer the best opportunity for international stakeholders?

Murray Legg is an entrepreneurial thinker with a track record of growing innovative technology businesses. He holds a PhD in biomedical engineering, has four years of experience as a corporate financier and co-founded a business that develops polymer heart valve replacements, SA Cardiosynthetics; and an influencer-marketing platform and digital agency, Webfluential.

SA Cardiosynthetics is a venture business looking to develop, and one day commercialise, a polymer heart valve replacement designed for emerging market patients. Rheumatic Fever causes valve disease in over 500 000 people annually that goes untreated because no product is currently available. Murray and his surgeon co-founder are working on addressing this need.

Webfluential addresses market demand for access to digital influencers and their audiences so that brands and consumers can interact on the web. The platform has grown globally, providing access to brands for over 10 000 influencers, with a combined digital audience of over 350 million people.

We asked Murray about African unicorns, Silicon Valley and the digital revolution.

A unicorn is a start-up worth $1-billion or more. What is your take on the potential for African unicorns?

Africa contributes about 2.4% of the global GDP. So as a player on the global stage, any business starting in Africa will reach a ceiling in terms of its capabilities on our continent. However, there’s nothing stopping applicability of locally grown businesses expanding into countries outside of Africa – the key is being able to understand what the world needs, and address that need appropriately and at scale.

We’ve seen SAB recently in a trillion rand deal, never mind a billion. Yet that business was founded 120 years ago. Reaching a billion dollar valuation for the sake of it shouldn’t be a goal, in my opinion. There are some great businesses that are worth a fraction of that but provide all the right experience to local entrepreneurs in learning about their product-market fit, working with technology and people, and not worrying about valuation.

I think there’s potential for an increasing number of African unicorns in the next five years, but it will be as a result of funding rounds where investors are happy to pay around R150-million for 1% of a company – a unicorn – likely to show revenues in a year of R3-billion.

You were one of 22 South African entrepreneurs sent by Investec and En-Novate to Silicon Valley in the US. What were your four key takeaways from that experience?

Seeing and speaking to the entrepreneurs there – the daily challenges that they face and the small wins that they celebrate, their degree of ambition and the skills and grit of their teams – all make me believe that we as South Africans have what it takes to make brilliant businesses ourselves. So much content and hype exists around the “untouchable” Silicon Valley entrepreneurs, but if we really get our minds focused we’re not far behind them.

Something the entrepreneurs there take very seriously is the feedback from their customers on how they use their products. Empathy as a part of the creative product process is crucial to finding product-market fit. Assuming that your product will be adopted the world over without asking a lot of questions from the people who use it, is a fatal flaw.

So much effort is put into believing in their mission as entrepreneurs. People really believe that they can put a dent in the universe – even in their daily tasks – and they live and breathe their company mission. We met with Google Maps team – the team consists of 100 people spread across the whole world. But they’ve been able to do all of what Maps offers (including the project of Streetview and public transport system integration) because each one of those 100 people believes that their work makes the world a better place.

They set 10X goals. Whether it’s user numbers, page views, revenue or profits, each company we spoke to have a target of what they were working on to scale 10 times within a year. Many have electronic dashboards in the office to track these, how they’re broken down into one-week metrics and if they’re ahead or behind.

Please speak about the opportunities afforded by the digital revolution and how technology is changing the business landscape, using Webfluential as an example of a success story.

If there’s a book to read that looks into the future and maps out the possibilities of the impact of technology, it’s The Rise of the Robots, by Martin Ford. In it, he outlines how it’s more the white-collared worker, than the blue-collared, that should be concerned about the effect of technology.

Artificial Intelligence is going to be the biggest theme of our generation, and it will be used in all sorts of interesting ways that we haven’t even considered. I attended a talk by the head of IBM Watson, where he gave an example of the use of AI in cancer research. They’ve fed in all the literature on cancer, as well as patient files from around the world, and the insights about early detection and treatment are just remarkable.

Google recently handed over the running of all its data centres to Deep Mind, its AI engine. Within the first month, the technology saved 15% of the energy bill.

In our influencer marketplace called Webfluential, we’re excited about all the new earnings channels we’ve created for people and the commensurate value we’ve created for brands that now have an additional method to reach an audience. On our platform, we’ve been able to reduce the degrees of separation from micro-publisher or celebrity to a brand, and automate the performance tracking of digital content.

It’s great for us to see the medium of communication changing from a uni-directional “spray and pray” approach of television and radio to an intimate conversation on platforms you heard about less than a year ago (like Snapchat).

If you were to advise anyone on starting up his or her own business, would you add anything to “work hard, dream big”?

Maintaining a great work ethic and chasing your dreams I think could be a reasonable motto for someone in their life; it’s certainly mine. People tend to get caught up in the human race, believing that they can only go Faster, Higher, Stronger, and sometimes take for granted that the challenge in work is the reward, not the financial or fame aspects that often come with it.

Through our lifetime the disruptive effect of technology will rip apart normality, as we know it. People will be replaced, companies will fall from grace, and careers will become obsolete. If I had more advice to give, it would be being humble, because sometimes you’re ahead, sometimes you’re behind, and you’ll always either need a favour or have reason to deliver on one.

It’s true: Income is scarce and global growth is sluggish. Tomorrow’s returns may not match yesterday’s. In light of all the crises of the past two years (think Eskom, NeneGate, NkandlaGate and #CabinetReshuffle) – throw in the recent downgrade from ratings agencies like S&P and Finch – investor’s confidence has hit an all-time low in South Africa. Despite the gloomy forecasts, we’ve been keeping a close eye on a few companies currently trading on the Johannesburg Stock Exchange (JSE), and four of them, we believe, will offer investors great value in 2017.

Company #02: Metair Investments. Although down-rated significantly over the past few year, mainly as a result of its struggling European operations (on the back of deteriorating political relations between Turkey and Russia). With the tension behind us, business as usual conditions will restore confidence in Metair and improve margins. Alwyn van der Merwe, director of investments at Sanlam Private Investments, told BusinessTech.co.za that he expects Metair’s earnings per share to jump from R1.50 in 2016 to R2.44 in 2017 – an immense 62% growth. “This puts the share on an 8 times forward earnings multiple, which is very cheap. If Metair’s operational results do turn around as expected, this share will certainly reward investors,” he says.Dividend Yield: 2.86%

South Africa had some difficulty going online and connecting to the rest of the world. But progress to Internet connectivity began when three pioneering Rhodes University students – François Jacot Guilarmod, Dave Wilson and Mike Lawrie – used salvaged and donated equipment to create their own gateway, giving Rhodes University its first IP number and established the first email link in South Africa. That was in 1988, one year before Berners-Lee invented the first ever web page, and in 1990 the first TCP/IP connection attempt successfully linked Rhodes University to the University of Cape Town, after which all universities across South Africa were similarly connected, creating the ZA domain which was officially registered in that same year.

Although progress was being made, there was a series of difficulties that had to be confronted, all within the same timeframe: South Africa was not yet connected to the rest of the world, despite the email link and domain support; and although the establishment of Telkom happened in 1991, the cost to lease a line to the USA was still too exorbitant; all the while, dial-up costs were getting costlier, with Rhodes’ bill reaching the thousand(s) rand mark; and the ZA domain was also giving its fair share of trouble causing “domain storms” – with multiple requests being triggered by unresolvable ZA domains. Eventually, in 1991 the first Internet protocol connection was made to Portland, USA; in 1993 South Africa’s first commercial Internet service providers popped up, a turning point in South Africa’s internet connectivity; and the co.za domain was established and administered with UNINET.

<Why did the Internet have a slow start in South Africa?>

Sanctions against South Africa meant that countries such as the USA were reluctant to, or couldn’t (by law), cooperate with South Africa to establish an international Internet connection. Email was already around in the States by the mid-seventies, only arriving in South Africa in 1989. The apartheid government also placed restrictions on the South African public, stopping communication and international relations, with strict censorship policies on information sharing. The government banned the use of thousands of works of literature including books and posters, films and music; newspapers and television were banned from publishing the goings-on, further isolating a country already denounced by the rest of the world.

Mike Lawrie writes in his account of the Internet’s beginnings in South Africa, The History of the Internet in South Africa: how it began, that their bringing the Internet to South Africa was done so at the country’s most turbulent time, with the government “doing its utmost to control the flow of information out of the country”. In an article explaining the emergence of email published in Rhodes University’s newspaper, Rhodos, in 1989, entitled “Email: A major breakthrough”, it is explicitly explained by the author that email “use is restricted (by law) to messages relating to your function at Rhodes University, and you may not send or distribute messages that are unrelated to this”.

<South Africa connects to the world>

Up until 1993, the only people to have access to the internet (email) were university bodies and academic institutions: matching Berners-Lee’s vision of free access for educational purposes and information sharing. When South Africa’s first commercial Internet Service Provider, The Internetworking Company of Southern Africa (Ticsa), came to fruition in 1993 it released a statement to communicate its intention to “extend Internet services in the region to those who have previously not had access, such as commercial organisations and other non-academic bodies, as well as those in neighbouring countries”; the service provider already had four companies connected to the Internet and advised the public that it was a not-for-profit organisation, based on the founders’ wish to keep the costs as low as possible.

<Remember the Big Black Box?>

Dial-up connections were the way of the day in 1997, with ISPs such as MWEB offering dial-up packages such as the Big Black Box. Throughout the 1990s and early 2000s, most Internet users connected using dial-up connections which consisted of a telephone landline, a computer and a modem – typically slow and temperamental, and limited the kind of access to the Internet that broadband brought to the table a few years later.

Telkom brought broadband to South Africa in 2002, launching their first commercial ADSL product, with faster download speeds and a permanent connection to the Internet, without having to dial-up through a modem. Soon after, in 2004, companies such as Vodacom 3G and iBurst began offering broadband wireless solutions, moving South Africa into the era of Internet we enjoy and rely on today.

<The Internet of today and tomorrow>

2016 saw an increased rollout of fibre-optic cables throughout South Africa. Although fibre-optic technology has been around for almost a decade, its accessibility and visibility is only recent. The South African government announced its national broadband fibre-optic policy, South Africa Connect, in 2014 and aims to provide fibre connection to every home by 2020, ensuring faster, more reliable, stable, affordable and accessible Internet services. Currently, most South Africans are connected to the Internet through ADSL lines, and replacing those five million (ADSL) copper lines with fibre-optics is both an expensive and time-consuming project. However, research shows that developed countries owe more than 50% of their economic growth to technological progress; therefore the long-term benefits of fibre-optic broadband Internet connectivity will see major advancements in technology, which will contribute to growing our economy.

Top500 is growing by leaps and bounds. The eighth edition has 25% more content and five times the number of clients than its predecessor. This is a fine reflection of the robust nature of the best-managed companies in South Africa, many of whom have shown remarkable resilience, and indeed growth, under difficult global, regional and national economic circumstances. With the flux in the economic landscape in 2016 came opportunities for shifts in the rankings amongst the sectors and we noted with interest that there was a 17% change in the number one position for the period under review.

It has been a pleasure compiling the content of this important annual B2B publication – and my heartfelt thanks goes to the team who worked tirelessly ensuring cover-to-cover quality.
We look forward to seeing you in 2017.

FIONA WAKELIN
Group Editor

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