Rands & Sense

The Future of COMMERCE

BITCOIN, THE ECONOMIC PLANS OF OUR POLITICAL PARTIES, RENEWABLE ENERGY AND MORE INSIDE

ANNUAL COMMERCE FACULTY MAGAZINE | 2015 • 16

Students dressed in style for our annual Suit Up Day competition, with the winner walking away with a R1000 Cavendish voucher - have a look at some of the outfits.

Michael Wormald, Acting Dean of Com-merce in 2015 takes a look at Business Ethics and the recent Volkswagen scandal

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Is your job safe? We look into the robot revolution that is predicted to cause mass unemployment in the next few decades.

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ContentsCommerce Students’ Council 2015 4

Editors’ Address 5

Business Ethics; a Volksvagen Conundrum 6

Chairperson’s Address 7

CSC Shavathon 2015 8

Suit Up Day 2015 9

The future is ours? A cross-party look

at the future of south african economics 10

Transforming Commerce 12

The Robot Revolution - Is your job safe? 14

The Future of Renewable Energy in South Africa 16

Bitcoin - The New Kind of Money 18

Paying back your Community 19

Talking Entrepeneurship with Emile McLennan 20

Consulting Club 23

Editors: Jembe Moran and Arthur Faulkner

Designer: Qondile Dlamini

Copy editor: Courtney Barnes

Contributors: Michael Wormald, Adam Kleinschmidt, Sindi Nkosi,

Lauren Van Haght, Jarryd Son, Kelebogile Lehasa

Photographer: Jembe Moran

Special thanks to Michael Wormald and the CSC team of 2015!

On the cover: Democratic Alliance leader Mr Mmusi Maimane on his visit to

UCT in August of 2015.

Note: The launch of the magazine was originally intended for November 2015,

much of the content was thus written prior to the events of #FeesMustFall.

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CHAIRPERSONNtshediseng Matla

ACADEMICS-REPPhumeza Jwili

SECRETARY GENERALMarcus Gawronsky

MEDIA & PUBLICATIONSJembe Moran

VICE CHAIRPERSONLouise Bestbier

CORPORATE RELATIONS& EVENTSVuyina Makhiva

TREASURERTanya Oxley

OUTREACH & ITTheo De Beer

TRANSFORMATIONTumelo Machethe

STUDENT LIFEGeonhee Kim

COMMERCE STUDENTS’ COUNCIL 2015

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While working to put this magazine together, the choice of the theme was an interesting one. The theme possibly came from the ever-present uncertainty concerning our future after we leave university, an uncertainty with which we are all faced as students. Where will we find ourselves in ten years? Twenty? Will we face a third world war? An energy crisis (bigger than simply load shedding)? We’ve been told that the jobs we’re going to be doing haven’t been invented yet - but will there even be jobs for us? We discuss some of these issues and more in the pages to follow.

We managed to photograph DA leader, Mmusi Maimane for the cover during his visit to UCT during second semester, but how realistic are his plans? To assess this, we look at the political parties that could shape our future in South Africa and compare their economic visions and plans for a better South Africa.

A little closer to home, It’s important for us as future leaders of the world to know what could be coming, and also whether the job we see ourselves doing after university will still be around in the next few decades. To this end, we discuss the continuing mechanisation of both manual and mental labour and how you might fit into the picture.

We also chat to a student entrepreneur who appeared on Dragons’ Den at the beginning of 2015, receiving a record R5 million for his start-up eShip. We ask him

about his story, what his thoughts are on the future and his advice to budding entrepreneurs.

For some on-the-ground perspective, we look back at the Commerce faculty in 2015, checking in with a society, our chairperson and the events that were run by the Commerce Students’ Council - from the Shavathon to Suit-Up Day - as well as recap the Commerce Transformation Assembly that was held.

It was an amazing year for student activism, seeing the fall of the Rhodes statue and the success of the #feesmustfall movement, but it is important that we look to the future; capable students will still be financially excluded across the country and institutional racism is still present across South Africa’s campuses. These are problems that we as future leaders must continue to tackle in every sphere of life.

Furthermore, having two editors from two fairly diverse fields of study allowed us to have different ideas about what should be included. Fortunately, we managed to see eye-to-eye on most issues. The articles that make up this magazine are intended to be of interest to commerce students and to prompt thought about where each of us want to fit into this evolving world.

Jembe Moran, Editor

Arthur Faulkner, Editor

EDITORS’ ADDRESS

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Economist Milton Friedman writes that corporate executives’ responsibility is “generally to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom”. Of course ethical custom is defined in terms of societal and business norms reflecting the expected behaviour of trustworthy individuals and organizations. So who could be more trustworthy than the manufacture of the “people’s car”? Volkswagen, an icon of motoring quality and the largest motor manufacturer in Europe has recently overtaken Toyota as the largest motor vehicle manufacturer in the world. So imagine the worlds surprise when on September 18, it becomes known that Volkswagen had purposefully installed software in many of the diesel cars it manufactures to reduced nitrogen oxide omissions under dynamometer test conditions but not in real world driving conditions. Was this the work of a rouge unethical engineer or is it a reflection of reduced social norms at Volkswagen generally? Or is it even broader, reflecting a drop in social norms within in European businesses community?

The history of this scandal suggests a broader commitment to unethical behaviour. In 2007, according to press reports, auto electric parts supplier Bosch made the suspect software available to Volkswagen “purely for purposes of internal testing”.

So what is noteworthy here is the external source of the unethical software and how far back ago it happened.

Within a year, Volkswagen begins to install the technology in its vehicles, despite a warning from Bosch that it was illegal to do so in cars destined for sale to the general public. So Bosch was aware of what was happening, must have known that cars were destined for the general public yet chose to do nothing more than to warn Volkswagen. Incidentally, it was around this time that Martin Winterkorn was appointed Volkswagen’s chief executive and the VW group strategy focussed on penetrating the American market and on becoming the world number one motor manufacturer in terms of volume.

More recently, researchers at the University of West Virginia found that the affected diesel cars generated up to 40 times as much nitrogen oxide than is legally permissible in the USA. The researchers inform the US authorities, who in turn ask Volkswagen for a response. The carmaker argues that the anomalies between the tests and the road performance are due to “different technical problems” and unexpected conditions of use. At the end of 2014, Volkswagen USA recalls a number of models for “software updates” and tells the authorities it has remedied the problem.

Then in 2015, in response to a question from the environmentalist Green party, the German government says it is aware of the existence of technologies that can skew the results of emission tests, but says it has no information about whether such devices are actually in use.

Finally on September 3, unable to provide any convincing answers, Volkswagen admits to the EPA that it deliberately installed the software in its cars and the ensuing shake up is history. Sadly, a classic case of a corporate chasing world domination while conforming to neither the law nor ethical custom. But this case also suggests a wider complicity than simply Volkswagen, including both Bosch and the German government.

BUSINESS ETHICS; THE VOLKSWAGEN CONUNDRUM

Michael Wormald, Acting Dean of Commerce in 2015

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When leadership calls, you answer. This was evident when twenty hopefuls ran in an effort to become part of the Commerce Students’ Council for 2015. Ten became victorious, and I have had the privilege of working with these ten very motivated individuals, all with the vision to represent and be the student voice.

Eager to get started, we began by having our first strategic planning meeting. We mapped out a calendar of the events we wanted to have as well as the goals we had for 2015. Our vision as a council was to be “a viable‚ visible‚ reliable and approachable platform for students to voice their opinions‚ thoughts and concerns.” Each member of the council shared their passions and views on student governance. Faculty council induction helped us truly understand the importance of the role we played in student governance at the University of the Cape Town.

This year the CSC saw many successful initiatives put in place. With cooperation from the Economics department, the CSC managed to remove tutorial cover sheets for first year economic courses (ECO1010F and ECO1011S). The first ever online query form was also initiated, in an effort to make communication with the students more efficient and effective. The CSC also worked very closely with faculty management where

we were invited to take part in Open Day, providing information to potential UCT students from a student’s point of view. (Side note, if you haven’t seen the video we shot, check it out on Youtube: Spotlight on Commerce.)

The CSC thrives off events we have organized. This year we saw our very first interfaculty CANSA Shavathon, our first Economic Making Policy Seminar for all aspiring economists, Launch Lab which gave students with entrepreneurial instinct the chance to share their ideas in hope of winning their share of R50 000, Suit Up day: a day dedicated to wearing formal clothes to campus for student morale, as well the awesome commerce faculty Hoodies. A successful post graduate studies evening was held by the Post Grad Commerce Council to inform students looking to further their studies by doing honours or masters at UCT. The CSC also attended the Dean’s farewell as Prof. Don Ross chose to embark on a new journey, and we thank him for the many years he spent at UCT leading the commerce faculty to be what it is today.

With the spear of transformation being the headline at UCT this year, a faculty assembly held on the 29th of September tackled these issues within the commerce faculty. Talks about transformation within the Teaching

and Learning committee have made the staff and management very interested in making a change within the commerce faculty.

With all that has happened this year, as a council we have strived to be more visible. At all times during our time in office, we put the needs of others before our own. It comes with great privilege to serve students, and an even greater privilege to be acknowledged by the students. Thank you to the students, staff and other governing structures who have made our term in office a pleasant one, but above all, thank you to the team! Commerce Students’ Council 2015, signing out!

Ntshediseng MatlaCSC 2015 Chairperson

CHAIRPERSON’S LETTERMichael Wormald,

Acting Dean of Commerce in 2015Ntshediseng Matla

CSC 2015 Chairperson

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CANSASHAVATHONThe CANSA shavathon is an annual event adopted by the commerce student council to give an opportunity to the UCT community to give back to society.

This is achieved by allowing anyone who desires to shave or spray their hair in acknowledging Cancer and making awareness to the society at large. This year we decided to combine the event with other faculty council members in order to create unity among faculties, which was very successful.

The proceeds (R4108) were donated to CANSA SHAVATHON in Cape Town, and the efforts of all the faculty councils and students that participated were highly appreciaited.

BY THEO DE BEER

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SUIT-UPDAYSuit Up Day, an annual event hosted by the Commerce Students’ Council.

This a day where the whole of UCT is encouraged to pull out their best looks and dress as though they were presenting themselves for their first day of work at a prestigious company.

This day aims to bring together students from different faculties for a fun day of admiring each other’s idea of best look, promoting camaraderie and unity at UCT.

The 15th of September saw a number of fashionistas make their way to the Leslie Social Sciences building to get snaps of their dapper looks taken by our house photographer, Jembe Moran. Even those who, for the rest of the year, have been secretly jealous of the Commerce faculty’s opportunities to suit up, came to the party. The rain did not stop the fun, everyone really stepped up to the occasion and expressed a lot of pride in the way they were dressed. Some also took the opportunity to incorporate the coats, rain boots and umbrellas into the photoshoot.

The pictures were later posted onto the Commerce Student Council’s Facebook page and the one who got the greatest number of likes took the grand prize of a R1000 Cavendish voucher. Other prizes included a Sorbet voucher worth R300, a voucher worth R200, which was given as a spot prize for the selfie that was posted to the CSC Facebook page with the hashtag #SuitUpDay, as well as two restaurant vouchers worth R100 each.

Overall, the day was a great success and we look forward to next year.

BY VUYINA MAKHIVA

Both major opposition parties, the Democratic Alliance (DA) and the Economic Freedom Fighters (EFF), have also detailed plans to develop South Africa over the next few decades. The DA’s Vision2029 and the numerous policy proposals by the EFF have taken on the big developmental questions in South Africa. A comparative look is essential, especially on the issues of fiscal discipline, infrastructure development, control of resources, control of economic sectors and the approach the three parties take towards building a more sustainable South Africa.

THE AFRICAN NATIONAL CONGRESS

The document produced by the NPC is heavy in rhetoric and in idealistic plans about how the incumbent government will solve the myriad of issues plaguing our nation. Dealing with issues like environmental sustainability, job creation,

and inclusive rural economics, to name a few, the NDP is the flagship of the ANC. Even after 21 years, we are still shackled to the issues brought about by the structural inequalities of apartheid, while also seeing government corruption, mismanagement and the decline of numerous industries and state enterprises. While we weathered the financial crash of 2009, recent indicators show our once booming economy of 2006- 2008 is slowing to a halt.

The NDP was the response to this and to the increasing pressure on the ANC to take a firmer grasp of the economic rudder. A summary of the economic plan highlights a need to raise exports, improve work skills across all sectors, implement projects that will foster infrastructure across the country and use fiscal checks to prevent government corruption. Employment is key to the NDP:

the government aims to quarter unemployment by prioritising smaller industries and firms, while also making South African labour and goods more viable through an added control over the negotiation between employer and employee. This, the NPC claims, will be supported by a more involved government that is more accountable. Rural economics is also addressed, with a greater focus on agriculture and skills development into processing and manufacturing in the rural economy.

Cutting through the detailed plans, it is clear that the NPC has taken the economic issues of South Africa very seriously. However, the government needs to critically analyse two things. Firstly, is this realistic, given the declining support of the government, and with the mismanagement and abuse of office through corrupt behaviour? With a stronger opposition than ever and with civil society protesting every foul move, the government has a huge burden to prevent a failure of confidence. Secondly, will this necessarily take into account all of the flux that occurs in global and local economics in the next fourteen years? While many elements to economic policy can be determined and hypothesised early on, not everything pans out despite how much thought is put into it.

THE DEMOCRATIC ALLIANCE

Since 1994 the relationship between the ANC and its major opposition, the DA, takes a different form to the left-right discrepancy in economic policy during apartheid. It has been stated, in explicit

terms, that the DA supports the NDP. Citing the need for ‘an economic revolution’, the DA believes the NDP will allow for progressive growth

The core of economic decision making in a developing nation is forward-thinking when devising plans for development. South Africa is no exception. The National Development Plan (NDP) proposed by the African National Congress (ANC) is the main development plan of the incumbent government. Set out by the National Planning Commission (NPC) under former Finance Minister Trevor Manuel and 25 other commissioners, the plan details the approach the government is taking to develop the nation by 2030.

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THE FUTURE IS OURS?A CROSS-PARTY LOOK AT THE FUTURE OF SOUTH AFRICAN ECONOMICSBY ADAM KLEINSCHMIDT

of the state in all sectors. However, the main contention is the nature of governance and prioritisation of spending. Take the DA’s Vision 2029 for example: speaking about three major themes – fairness, opportunity and freedom – the body of the DA’s optimistic approach sees them taking on South Africa as they have the City of Cape Town and the Western Cape Province. Their primary focus is on jobs, with free and fair opportunity for all to enter the job market, which they plan to build with a capable, non-corrupt state. A heavy emphasis in their documentation cites a government that is transparent, accountable and free of nepotism, something the ANC is often attacked for at all levels of government. Naturally, these statements are just as idealistic as the ANC’s, but making broad claims is easy when one has no need to be accountable.

What does this say about the DA in coming years? Based off their vision, 2029 will have seen the party in power for 10 years. With growing pole positions across provincial and municipal governments throwing the political security of the ANC into difficult waters, the DA has the potential to form a greater challenge to the ANC within the next decade if they maintain support. This, in turn, will mean more pressure from them to be a government that prioritises public spending very differently. However, the shift from running one provincial government and a number of towns and cities to running one of Africa’s biggest economies will be a challenge.

The DA is optimistic: they’re a strong opponent to ANC hegemony. The main question for them is whether they can make the political and economic decisions to make the party more enticing to the average voter, and whether they will be able to sustain their approach to social and economic spending.

THE ECONOMIC FREEDOM FIGHTERS

Radical politics in South Africa has the tendency to be side-lined by the mainstream. Groups like the AWB or AZAPO have faded into relative obscurity as the political forces around them made their policies irrelevant and their approach too radical to be stomached by the rest. While the EFF can hardly be called the epitome of extreme, they do embody the kind of political wake-up South Africa needs: a step-away from the mainstream DAANC clash and a stronger surge in left wing populism. With strong views on controlling state industries, reforming land and labour laws, and with perhaps the greatest emphasis on social spending, the EFF is the self-named vanguard of the people.

While the EFF has made no formal statements about the NDP to the extent of the DA, they have some counter policies. Again, it may not be in the same format as Vision2029 but it is the base of a party economic plan much like it. Economically, the EFF pushes a strategic approach: in order to prevent corruption and the perpetuation of inequality, the EFF aims to nationalise core sectors of the economy. Additionally, the role of the worker would be enhanced across all sectors by going against the “pro-business” approach of the ANC and DA, with greater powers of negotiation, more social spending on civil issues like housing and education. This, it is proposed, would be accompanied by a more accountable government.

Much like the other two, it is important to pull away the rhetoric. One core issue that is plaguing the EFF is experience in government: both the ANC and DA have more experience in South African governance and have worked the channels to suit them and their policies. The EFF stands a chance in 2016 of gaining local municipalities and this will be their first test of governance. Should they pass this test and those to follow their policies will be moulded by time and popular demand, much like the other two major parties.

CONCLUSIONAs many a commerce student might brush away the importance of the political system in their future, or indeed be filled by partiallyinformed pessimism, a critical look at our future is always important to keep us on our toes. If one thing can be said for certain, it is that much of the major political parties’ planning for the future can be taken with a pinch of salt, but this just means that there is even more reason to stay up to date with what developments are to come. A policy change here or a budget shift there could really do a lot to affect the day to day life of any businessperson. Not only the budget speech or announcements from the central bank are important, though, shifts in social policy could just as easily affect our future ventures and more importantly, our interaction with our fellow South Africans.

So, the next time the political news concerns the attitude of the government to protests or the amount of freedom afforded to somebody who isn’t you, turn the volume up, not down, as it could be more important to you in the long run than you may immediately realise.

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THE FUTURE IS OURS?A CROSS-PARTY LOOK AT THE FUTURE OF SOUTH AFRICAN ECONOMICS

Transformation and decolonisation have been hot topics in 2015 at UCT, and the jury is out as to whether Commerce students were sufficiently involved in the conversation. There is a wide-spread stereotype about commerce students that, apparently, we are studying our degrees for well-paying jobs and we are simply disinterested in mobilizing social consciousness. However, as with all stereotypes, there are many exceptions. Many students want more from their education and all-round experience at UCT and so they are more than willing to engage with issues of transformation.

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BY SINDI NKOSI

TRANSFORMING COMMERCE MOVING FORWARD AS A FACULTY

On the evening of Tuesday the 29th of September, the Commerce Students’ Council hosted a Faculty Transformation Assembly to gather and discuss issues pertaining to decolonisation in the commerce faculty. As it approached six o’clock, the crowd, mostly consisting of staff members, poured in. The first member of the floor to speak, Paleo Mokoena from the Rhodes Must Fall movement, called for the white panel members to sit in the audience rather than occupy the front of the room. This introduced the idea that many students feel as if transformation can be a forced assimilation or measure. In such an assimilation, the same authorities continuing to occupy positions of authority, is not sufficient. Therefore, the challenge then is to decolonise, by removing power from the privileged, rather than by simply altering racial demographics in the faculty, as current

transformation attempts to. It was a very controversial move and a perfect example of what student politics have developed into this year.

Thato Pule, who was originally meant to be part of the panel, echoed a disgruntlement of many students: when our education prioritises white, cisgender, able-bodied and heterosexual men, how can the rest of us be properly prepared for the workplace? Many would agree that students do not learn much about social issues from their Bachelor of Commerce or Business Science degrees. The general consensus was that courses need not to be added to the syllabus, but rather that this matter should be addressed in the courses that are currently provided. Unfortunately, there are limitations to this suggestion due to students having to cover a specific set of subject matter to eventually obtain qualifications accredited by the South African Institute of Chartered Accountants and other professional bodies. Nonetheless, lecturers should be conscientised towards social issues, especially given that there are courses that are considered to be for enrichment and extended sociological understanding. Furthermore it is the duty of the faculty to ensure that the curriculum addresses these issues properly.

The panel expressed that there was difficulty in attracting black academics to the university. A concern was voiced that whether or not the culture of UCT is welcoming to black academics, which also demonstrates that decolonisation is not only of paramount importance for students, but for staff too. A member of the floor proposed an innovative idea of bridging language gaps in the tutoring

system by providing tutors who can explain concepts in various African languages. Another student asked for a definite plan in terms of what will be done in terms of creating tutor diversity. The tutor system is an ideal, faculty-specific way for Commerce to transform the leadership structures to which students are exposed.

In other faculties, lectures were cancelled for the transformation assembly and according to a member of the floor, the fact that Commerce did not follow suit was evidence of the faculty’s unwillingness to give the topic enough focus. The assembly clashed with a Mathematics test and a Corporate Governance I test, with other tests on the horizon. This shows that it is possible that students’ absentia may not be down to apathy, but it does emphasise that the commerce faculty itself must try harder in collaborating with students to decolonise the faculty. Students should be given as many opportunities to voice their concerns, in terms of transformation and decolonisation, because it was most likely only dealt with at a superficial level on Tuesday evening.

Commerce is a faculty with very specific challenges, but it is also a large and diverse group of people. We can all agree that business does not occur in a vacuum, and since businesses also include a hopefully diverse group of people, ignoring social issues as future business people is dangerous. The faculty, including staff and students, should work together and disprove the stereotype that Commerce students will be nothing but cut-throat businesspeople.

‘The tutor system is an ideal, faculty-specific way for Commerce to transform the leadership structures to which students are exposed.’

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THE ROBOT REVOLUTION IS YOUR JOB SAFE?

One of the biggest developments of mechanical muscles was the Industrial Revolution of the 1800s which brought about the first mass job loss due to mechanisation. With new technologies such as the stocking frames, spinning frames and power looms, many low-skilled workers who were far more expensive but less efficient, were laid off. At the time though, there was the potential for these workers to skill themselves for better jobs and while many workers feared unemployment at the time, there were new and better jobs for people to take. Output increased and there was greater abundance of resources. This has been the case for centuries, mechanical muscles have replaced manual labour and humans have skilled themselves to do better jobs.

Nowadays, it’s not just mechanical muscles that are replacing human jobs, it’s mechanical minds. Mechanical muscles replaced physical labour, mechanical minds are replacing brain labour. Computers have been already been programmed to replace bookkeepers and now there are robots being programmed to do any number of things, such as write newspaper articles. Many of the more fact-based articles such as some Associated Press sports articles are already being written entirely by a robot.When we

look at robots we see today, they’re complex, expensive and generally not very versatile - but we’re only at the beginning of the robot revolution. One may not realise but there are already self-driving cars that have driven millions of kilometers without major incident. Robots that can cook delicious meals exist and most importantly; learn without having to be programmed. Robots that do not need to be coded for every action are currently expensive yet basic - but improvements are coming in fast. Companies fund the research and development of these new technologies because they can eventually substitute the technology for expensive and unreliable labour.

Take a look at a simple case near to home - we have our coffee baristas at Frigo and Java Junction, but they were definitely turning over a lot more sales before Unicafe arrived - essentially a robot coffee machine that’s cheaper and very easy to operate. It might not make the coffee just how you like it, but these sorts of robots will get better and better and pretty soon you’ll be able to swipe your student card and get your favourite beans, sugar and milk combination. Coffee baristas are not exactly the majority of the workforce, though, - but what is?

In South Africa, we have mining, construction and agriculture - low-skill jobs that robots and mechanical muscles have been already been fulfilling. In agriculture the amount of jobs lost to mechanisation is staggering; 120000 in just the 1990s and even more since then as technologies such as the combine harvester technology as well as centre-pivot irrigation have eliminated the need for much manual labour. Self-driving cars will soon eliminate the need for truck drivers and the like. Throughout history, though, in the technological revolution there have been new, better jobs. Thus, when people hear about robots taking over their jobs they tend to assume that the general trend will continue - you may be thinking that manual jobs may be automated but jobs requiring “brain labour” such as accountants, lawyers, economists and the like will be safe - but there is growing research that shows that even these jobs may be at risk of automation in the next few decades; even now there is an increasing number of university graduates in the developed world who cannot find work across all fields. Computers are getting more and more powerful each year and robots are able to do more and more.

BY JEMBE MORAN

Over the course of thousands of years, humans have gone from a situation where everybody was required to produce food to almost no-one needing to produce food. We’ve done this by creating tools, or “mechanical muscles”, allowing one person to produce food for more and more people, which has allowed others to specialise in different roles that contribute to making everyone better off.

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A great portion of the work done by “brain labour” professions is analytical, and as the processing power of computers increase, it won’t be long until they can do this analysis with more focus and less errors than humans. It is not a stretch to believe that soon a computer will be able to audit an entire company; and with the power of computing it won’t merely be some of the financials but rather every receipt and more.

What takes humans months could potentially be done in a few minutes. Lawyers have to spend a great deal of time memorising case law, but what if robots could be taught to analyse a case and withdraw from any and

all records ever, within seconds, any relevant cases? It is not simply a matter of searching for keywords but rather a matching of legal facts and judgements that future robots could be programmed to do.

We’ve come a long way when it comes to mechanical muscles, but mechanical minds are getting stronger and stronger. Experts say that unemployment could reach 50% in under two decades in developed countries. This is problematic for firms and government. For one, they might be producing more output for less input, but the profits from mechanical minds are predicted to be concentrated - fewer people earning more money. Stephen Hawking iterates that it is not robots we should be afraid of, but capitalism. He says that the trend thusfar has been towards those who earn the profits lobbying successfully against wealth redistribution, driving greater and greater inequality. However, with more people unemployed, aggregate demand will decrease. Firms need customers and those with a low income spend more and save less. A potential solution is to ban the use of mechanical minds to an extent, but this has historically never worked. Trade unions aren’t strong enough and the economic incentive is too strong. Plus: many people don’t enjoy the work they do. An alternative solution, which could be argued is already

happening, is increasing welfare money. If this is the primary method used to address the issue, there will be high salary employed people and low salary unemployed people. This is controversial, but if it becomes evident that there really are no jobs even for skilled and educated workers, policy makers could consider it. This would have massive repercussions for the world. Conservative media makes a lot of the “welfare state” in the US, but this could be a reality in a few decades. There could also be a shift in how people are valued in society; currently people are mostly valued for what they contribute in terms of work and the unemployed are seen as worthless, but we could see people being perceived as far more intrinsically valuable. Given that work gives many people’s lives meaning, the question of what people would do is interesting.

We can’t really tell when this will happen or how it will unfold, but it seems almost certain that a radical change in the labour market and the world as a whole is coming within our lifetime.

In November, 195 countries signed an agreement at the Paris Climate Change Conference to keep global warming below two degrees celsius. Whether or not to think this is an empty gesture probably depends on whether you think the ice caps are half full or half empty, but this, the scrapping of the Keystone pipeline and other recent developments in the climate change debate seem to be a signal that much of the world is ready to move, or start moving, towards an alternative energy solution.

What can certainly be said about South Africa and some of its neighbours is that renewable energy is on the front foot. Despite the recent upgrades to the Medupi coal power station in Limpopo, renewable energy additions to the South African grid have almost overtaken the output of the upgrade in less than half of the time. Despite all this development, the World Bank estimates that only 24% of Sub-Saharan Africa has access to electricity.

There are two reasons for this shortage. Firstly, there is a problem of infrastructure. Sub-saharan Africa has many widely spread and sparsely populated rural communities that aren’t reached by the grid. Even if

Eskom or other power providers could manage demand, they couldn’t be provided with electricity. The cost of getting all of these communities connected to the existing power network would be very high and, given government constraints, highly impractical. Secondly, it’s not possible for a rural community to build a little coal power station outside their village to deal with the problem independently. Power generation has typically been an industry which tends towards consisting of natural monopolies because of the high startup cost of building power plants, to which our own R154 billion Medupi power station bears testament. This means, historically it would be impossible to solve access issues without having to rely

on building the expensive infrastructure or a whole new full-sized power plant.

Renewable energy solves both of these problems. Solar and wind energy, unlike coal, are superbly scalable. One solar panel can run a house, or a few hundred in the middle of the desert can act as a traditional power station. This means that those areas that are far away from urban hubs can generate their own power on as small a scale as they need, lending a great opportunity for these communities to not only have electricity, but be completely energy independent. Secondly, the price per watt of the crystalline-silicon photovoltaic cells required for solar power has decreased from almost eighty US dollars

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BY ARTHUR FAULKNER

RENEWABLE ENERGY

in 1977 to less than one US dollar today. This means that the governments of Sub-Saharan Africa wouldn’t have to spend nearly as much to subsidise the provision of solar power to rural communities. Furthermore, this gives a real opportunity for Non-Governmental Organisations to hit two birds with one stone by providing clean energy to those who need it most.

These developments don’t exist in a vacuum. Students coming out of University now have many opportunities to use these developments to aid them in the future. If you’re the philanthropic sort, you can use these developments to help improve the lives of people in your country. Otherwise, there are also many other reasons to be interested in the rise of renewable energy.

Anybody who is business minded will obviously already have jumped onto the idea of bringing these scalable renewable energy solutions to the free market. As the demand for these products grows, businesses bringing these products to homes in South

Africa will certainly be an integral part of filling that demand.

Furthermore, in the time that it takes the government to cater for demand, load shedding will be an inevitable part of our lives. This can lead to huge losses in profit and potentially catastrophic delays for businesses. On top of this, electricity is a very large expense for many businesses, particularly in the manufacturing sector. The use of private solar or wind power is an excellent opportunity for businesses to free themselves from the constraints of a state monopolised industry. Past the initial capital investment, these sources of power are virtually costless, meaning fewer expenses in the future. Renewable energy, despite its initial cost of capital acquisition, provides people with cheap, clean energy. Furthermore, it offers rural communities and businesses a chance of energy independence,

reducing the need for the government to run a loss subsidising inefficient parastatals and allowing it to invest its money elsewhere. A step towards greener energy in Sub-Saharan Africa is another step towards us developing to become the continent of the future. However, it seems that, like in many other enterprises that are doing so well, development will be fuelled by forward thinking minds in the private and non-governmental sectors. This certainly isn’t a downside, as despite our mineral wealth, we can be sure that our most valuable assets are the young minds our continent produces.

‘A step towards greener energy in Sub-Saharan Africa is another step towards us developing to become the continent of the future’

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Banking has certainly been revolutionised, moving away from the frustrations of queuing at physical stores to transacting with a computer and, finally, to cell phone banking. Now imagine your future grandchildren giving you the same look you give those folks who still withdraw cash from a teller. While still relatively unheard of, cryptocurrency is decentralized, open source, peer-to-peer digital currency that does not go through any middle-man exchanges like a bank. This is why it is likely to be incredibly popular one day due to the ease and cost effectiveness of transactions. Paying with something like Bitcoin is not much more complicated than it is to send an email, making it convenient for consumers.

In order to facilitate these transactions, the network is secured by “miners” who run software programmes to decode the encrypted transactions. When running, the software does computations and each

complete one brings you closer to “finding” monies. Almost anyone can be a miner, although you are more likely to be successful when using hardware that is more sophisticated than your competing miners. For verifying these transactions, miners are rewarded newly generated Bitcoins which they can use as currency or hold as an investment like you would with gold, for example, in the hope that it appreciates.

Cryptocurrency has opened a door to a new world of investing, whereby holders bet on the value of these monies increasing as they gain popularity. Many prefer to join a “pool” online in order to benefit from more computing power and earn a percentage of the entire pool’s earnings based on the work you put in. This is comparable to insurance, whereby funds are pooled together to minimise individual risk. This feature offers Bitcoin a greater market share as it caters for the more risk averse investors as well.

If you are more risk seeking you can trade currency on certain exchanges as you would with real money. There is another option to get currency for free using “Faucets” where people have donated money to be distributed to anyone who is interested. The purpose of this is to increase popularity of a particular currency in the hopes to improve the actual value of it in the long term.

Bitcoin is the “category creator” (weusecoins.com) of blockchain technology which is the public ledger where all completed transactions of Bitcoins are stored and enables computers to verify the validity of transactions. However, there are hundreds of different types of cryptocurrency other than Bitcoin (of which one coin costs just under $230). Examples are the fast growing Litecoin, Dash and Dogecoin (yes, like the meme). As revolutionary and convenient as decentralized digital currency may be, South Africa is a very traditional country. Cash remains king, partly because of the electricity crisis but mostly because of people’s scepticism towards transacting over the Internet. Cutting down on transaction costs will certainly help smaller businesses flourish; however, if consumers have the final say it might just mean banks are here to stay.

“Cryptocurrency has opened a door to a new world of investing.”

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BY LAUREN VAN HAGHT & JARRYD SON

THE NEW KIND OF MONEYA FUTURE OF DIGITAL CURRENCY

Reflecting back to 2013 when a lecturer announced that she had to study B.Com Accounting, in order to pay her mother’s mortgage, I could not help but wonder if most of us are studying what we are studying because we want to or because our degrees have become a necessity. And by necessity I am not just talking about earning respect from your mother’s “stokvel chomi’s” or your grandmother’s tea club, but the necessity to try and repair the on-going socio economic issues that have been weighed upon our communities.

Speaking to a wide variety of students, I could sense that a portion of us are driven to study our commerce degrees because of certain socio-economic issues that we witnessed in our communities. It is quite interesting that students study commerce degrees because they have witnessed a major mismanagement of finances back at their homes. A lack of drive to obtain self-dependence and financial security, but an increasing desire to depend on the government for grants and assistance.

According to Cebolenkosi (Final year Economics and Finance student), he opted to study his degree with the hopes of obtaining financial security for himself and his family. He mentioned that it would be pleasing to him to move from the current low economic class that his family is “stuck in” toa more high income economic class. Cebolenkosi also noted the significance of how he could one day suggest investment plans to our local banks that can be aimed at rural communities and basically fit their needs as individuals. Through earning his degree, he mentioned that he would be able to encourage firms to change their perspective on corporate social investment programmes, by obtaining insight and guidance from individuals “such as us”, who have experienced life in these communities and basically know what these communities are about. “Firms tend to just invest in programmes but are unaware of the backgrounds of the communities they are investing in.

How about we get our degrees, work for these firms and use our raw talent to advise them on more suitable ways of assisting people who are like us?” said Cebolenkosi.

Adding on to Cebolenkosi’s story, I got the opportunity to explore another side of the equation. I was captivated by Rorisang ‘s story (Final year, Finance Student), who was not only driven by the necessity to repair our society’s difficulties ranging from lack financial security and mismanagement of funds but rather the need to use a degree to encourage the growth of small self-sufficient businesses. Ones similar to the businesses that her parents own. Her perspective was shifted from identifying the problem and gaining a solution, but to rather create a better solution with the existing solutions that were already in place. She mentioned that the best way that she would contribute to the future of economic growth within her country with this degree, that had become a necessity for her; was to start a company that could grow these smaller companies and basically achieve this vision by cultivating, empowering and sustaining the small talent and efforts that are invested into these business. Also another way to incentivize “her people” to not only focus on businesses just to make sufficient profits but to contribute to the country’s overall growth.

As I continue to explore this topic, I am more aware that a degree is a necessity but most of us will be exploring other interests through our degrees. This piece of paper costs ones three to four of their lives and I am quite enthused to see that some of our peers have already paved their way to use their “necessary” degrees to contribute to the overall growth of our economy. Not a direct way to assist but rather an indirect way that perhaps employers will explore in the near future..

“Firms tend to just invest in programmes but are unaware of the backgrounds of the communities they are investing in. How about we get our degrees, work for these firms and use our raw talent to advise them on more suitable ways of assisting people who are like us?”

RANDS & SENSE 2015 /16 • 19

BY KELEBOGILE LEHASA

PAYING BACK YOUR COMMUNITY

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TALKING ENTREPRENEURSHIPWITH EMILE MCLENNANEmile McLennan is a 20 year old UCT student studying BBusSci Finance with Accounting going into his third year. He is originally from Durban and was schooled at Hilton College in KZN. Emile is the CEO, tea-maker, sole-founder and managing director of his business, eShip, which he pitched as a startup idea at the beginning of 2015 on the South African version of Dragon’s Den, a popular television programme where entretreurs pitch their ideas to seasoned investors and offer a stake in their business for capital contribution. He made headlines when he secured a SA television record R5 million for a 30% stake in his business, as a teenager. We sat down with Emile to discuss his story and what it takes to become an entrepreneur in the ever changing business world.

RANDS & SENSE 2015 /16 • 21

What is eShip?eShip is an online transport marketplace and freight aggregation engine. In the simplest sense, it’s a platform that connects consignments to transporters who have the capacity to fulfill the load.

What inspired the idea?There was no single eureka moment to be honest, I was speaking to people in the industry who explained how they struggle to find work. Their companies have rooms of people who call businesses asking them if they want to move items, there is a lack of access to market in the delivery business. Their form of advertising; calling, trawling online classifieds and newspapers is archaic and inefficient. There is no truck in South Africa that runs at full capacity, many do the return leg empty. I figured that there must be a way to fill these trucks, and the internet was definitely the most efficient way to do it. It was basically formulating the idea, investigating the problem - speaking to companies. Once I got to the point where I was ready to invest real time and money, where I had to develop the technology, I started interviewing transport companies to get a better idea of what was required to get eShip going.

What has happened since Dragon’s Den?I began to work on eShip in 2013 and it was officially founded in 2014. In terms of the Dragons’ investment, they had to properly examine the business before everything was finalised. At the time it was extremely small and had no tangible assets. We then expanded the site, redesigned it with contractors and it looks a lot better now than it did back then. eShip is a marketplace and thus the biggest issue was getting the right balance between consignors and transporters. In the beginning there was too much demand for transport, and then too much supply. We eventually got to a point where a competitive quote could be delivered to a prospective customer very quickly.

Since the show I’ve also branched eShip into e-commerce - basically by negotiating contracts with courier companies we can give an affordable rate to small online shops that would otherwise need to be shipping thousands of parcels a month to get a good deal, and we can do this in real time.

What hurdles have you faced getting the company off the ground?Building the marketplace was very challenging; synchronising the supply and demand. As the concept is very new, people don’t know that this exists, so we have to inform people about the solution before they can use it. The problem exists, but people need to be shown how the solution works and at the right time. It’s a unique idea, but there are some other issues; on the transporter side it’s very difficult dealing with the companies as it is a dinosaur industry, all their structures and technology are very archaic.

How big are the companies?We have a big range, there are small independant guys doing local, short haul routes. A one man, one bakkie operation. On the other side, there are the big national freight companies who haul tons of stuff per load. We can pretty much move anything; we have the capacity to pick up and deliver a document within 40 minutes in town and we can also move 40 tonnes of bitumen from Durban to Grahamstown.

Do you have international ambitions?I want to take eShip cross-border first, then further into Africa. Cross-border trade is massive, but much more difficult. Internationally, there’s a big player in the States and a smaller one in England so I’d rather focus on developing countries where the challenges are unique. There are also shorter term goals that I have; like making financing available to small operators to get a truck (as currently many drivers don’t have access to credit and rely on loansharks), so we negotiate on their behalf and get them great deals. Similar to uber, we want to build an ecosystem and get to a point where 100% of income for the small providers comes from eShip.

“When I was 5, I thought it would be great if I could charge my family to use the bathroom”

Where did your drive to be an entrepreneur come from?From a very young age I always knew I was going to be an entrepreneur - it was never really about the money but rather the will to do something substantial. When I was 5, I thought it would be great if I could charge my family to use the bathroom which was very short lived. The year later I wanted to save up some money so I said to myself; let me see if I can do work, manual labour like household chores to earn money from my parents - but I found it very unrewarding as well as uninspiring,

there was a very low return & that’s when I realised you have to be an entrepreneur. It all comes from having a very independent upbringing; if I needed anything done, I did it myself; if the geyser wasn’t working I wouldn’t wait for someone else to go fix it, I’d go into the roof and have a look. I would find the problems and solve them myself and that’s key to becoming

an entrepreneur.

What was your start to entrepreneurship?I initially started a business that sold health products online. At that stage, we were the only people doing it online and subsequently sold that in my matric year. I started it when I realised the need; why can’t I buy health products online? It was more of learning experience. I did it basically to see if I could build an online store and it worked. I remember the day of my first order, and how excited I was. In one month I made R100

profit and I was ecstatic.

How has UCT or school helped you? Has it given you anything tangible towards running the company?That’s an interesting question. I’m studying a business orientated degree so there are some things that do help - however there are many courses that do not help in business. It is difficult to say. The problem at the moment is that currently we are studying broadly based concepts, and not getting into the finer concepts. First year economics taught basic principles, for example. Accounting helps to interpret financial statements but I still have a reputable accountant that does my tax. It’s hard to pinpoint what helps but there are definitely some aspects that help, but some do not apply. A degree is more an indication that you are someone who can get a degree - you are able to work under pressure and cram before a test. That I feel is a bigger takeaway than what it says on the degree itself. I think university helps you to work hard and efficiently, whereas running a company there is no handbook that tells you what do and when.

How do you a balance a degree and a business?Million dollar question! Proper time management - I always have to be organised. Prioritisation: I’ve had to make sacrifices. One of them was Dean’s Merit List. I knew from the beginning that that was out of the window, you have to be realistic. What can I achieve and what is the best outcome? So it’s basically staying organised and staying on top of everything which is difficult at university because I miss lectures and don’t have the time to revise which I would normally need to do. The minute you let things slide, things don’t work.It’s also about just becoming okay with being uncomfortable. On a Thursday night when everyone is going out, you have to sit down and finish this week’s tut, as well as the next two because you know it’s going to be a hectic two weeks ahead. You just have to carry on. And

you also have to still find time to unwind at some point. There has to be a balance.

Are you currently doing anything to give back to the community?I don’t run a charity or a nonprofit, but I do help out organisations, like one which teaches girls from underprivileged schools. I give talks to them, teach them how to code, teach them about technology - enough to pique their interest and show them where they can learn more.

Also, I help grow young entrepreneurship - every other night I’m helping another young entrepreneur with their business plan; if anyone asks for help I always make an effort to assist where I can; and I get a lot of emails asking for just that.

Many people are afraid of entrepreneurship because of its insecure nature, what would you say to them?What’s the worst thing that could happen? You fail. You have to lose the ego because you have to be prepared to fail as an entrepreneur - failing is not a bad thing and you have to believe that. If you lose everything, just start again. If you’re 50 and you’re gonna gamble your retirement it’s probably not a great idea, but as a young person you have very little to lose, you can always make it work. Once you’ve accepted failure there isn’t anything stopping you.

How do you think a student can best go about starting a business?Talk to people who have already done it, get advice, make sure you have a product or an idea that will work (test on a small scale, try get validation from peers), find a mentor, preferably someone who’s started a business or something similar. If you want advice from someone high up, add them on LinkedIn, email them or tweet them and you could get a response - just

do it!

Are there any specific skills or traits that you think an entrepreneur should have?Determination is one of them, you need to put your head down and

go. As an entrepreneur, one day you’ll feel on top of the world the

and the next day as if the world is falling in all around you. Don’t lose

sight of what you’re trying to do and go for it. Also, self belief and self

confidence is vital. You have to back yourself: this is how something

has been done forever but I believe that there is a different and better

way of doing it and can convince people of that. Make sure you make

extensive use of the internet though, google can be your best friend!

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Choosing a career to pursue after university certainly must be one of the most difficult decisions students have to make. There are often several barriers to us pursuing what it is we really want to do. Firstly, given that there are so many different career opportunities that exist, how can one know exactly what it is that one really wants to do?

Secondly, many of us find that the degrees we anticipated to suit us, actually don’t and in second or third year we have less career direction than when in matric. And lastly, even if one is fortunate enough to find a career that one is truly passionate about, study loans and commitments are constraining factors that limit one’s freedom to choose a career path.

The UCT Consulting Club aims to empower members through providing insight into the career of management consulting. Although the Club may not be a silver bullet to solve all of your career problems, it allows students to explore an alternative career path. The Consulting Club was founded in 2012 and aims to be a bridging mechanism between management consulting firms in South Africa and interested UCT students. What is management consulting? Consulting companies work with the biggest organisations around the world to help them create high levels of values and improve organisational performance. That may sound a bit fuzzy, but even the biggest companies in the world need an external perspective on their company and consulting companies offer this perspective by providing unique insights that help solve pressing business problems.

Why was a club established to promote management consulting? Consulting is a niche industry – it’s competitive and getting into a top consulting firm is very daunting. There are lots of different consulting firms, the interviews are tough and limited resources exist to help provide you with support if you are interesting in consulting. By holding a wide range of events and workshops, the UCT Consulting Club equips its members with the necessary skills and opportunities to pursue their interests in consulting. We are the first point of call for consulting firms that want to interact with students on campus and have been sponsored by, and continue to work with, the biggest consulting firms in South Africa, including Bain & Company, the Boston Consulting Club, Analysys Mason and AT Kearney, among others. The Club also exposes members to the business environment in South Africa, enabling them to be well-rounded business leaders. We attract a wide range of speakers, such as the CEO of Woolworths

Holdings and Guy Lundy a professional head-hunter, and this allows members to get an in-depth understanding of the business world in South Africa.

Consulting companies value diversity and, as a result, there is no ‘correct’ degree for those wishing to pursue consulting. An Organisational Psychology major is as likely as a Finance & Accounting major to get a job at a top consulting firm. Also, if a student loan or work agreement is holding you back, consulting firms are often willing to help out in repaying the loan if they believe in you. Lastly, all big consulting firms are international and have no bias towards South African citizens – whether you are from the African continent or abroad, you can pursue a careerin consulting.

A career in consulting often carries a very elitist connotation and many students don’t even try to pursue consulting because of this. Firstly, it is true that consulting is a difficult job. The hours are long, the work very challenging and the environment very fast-paced. But the truth is consulting is a viable career for anyone who is looking for rapid personal and professional growth. Consulting is growing in South Africa and firms are hiring more than ever before. As South Africa’s premier university, UCT is the first point-of-call for consulting firms looking to hire and it is up to UCT students to equip themselves with the necessary skills and engage with these firms to enter the consulting industry.

Importantly, the Consulting Club isn’t just for those who are set on consulting. At its core, management consulting requires strong problem-solving skills and cogent analytical skills – these are skills that are required across many different careers. If management consulting sounds like it may be a possible career path for you or if you’re up for learning some real-world business problems, make sure you sign up for the Club in 2016 at Plaza Week. 2016 is going to be the Club’s best year yet, with a top-tier firm already confirmed as our sponsor for Plaza Week and an exciting opening event on the cards.We look forward to seeing you in 2016 and hope that you take advantage of all the opportunities consulting has to offer.

Regards,UCT Consulting Club Executive

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Brought to you by the Commerce Students' Council