RHODES’ KNOWLEDGE ECONOMY: Over R746 million in annual direct expenditures

BY TAI CHISHAKWE - JULY 24, 2014

Whether or not business schools had a hand in the 2009 economic crisis, they were widely criticised for unwittingly sharpening the tools and preparing many of the corporate wrecking crews that brought the global economy to its knees.

Ironically, it is also institutions of higher learning that have been responsible for growing poor regions such as the Eastern Cape.

“Prior to the global financial crisis we were already teaching good leadership practices (such as servant leadership) as well as proper corporate governance and ethics,” described Professor Owen Skae, Director of Rhodes Business School.

“We have always maintained that it is not about ‘how much money you make, but how you make your money’.”

Established in 2000, the business school offers several business-focussed courses, MBA’s and a number of customised leadership development programmes for a number of Eastern Cape businesses.

Rhodes University, the province’s oldest tertiary institution, is also among the primary economic activities in Grahamstown - its students, faculties, staff and visitors have been driving the town’s economy, for over a century.

According to the university’s Annual Reports and Consolidated Financial Statements for 2011,direct institutional spending exceeding R746 million (an increase of about R114 million from 2009).

A large percentage of the institution’s direct income (over R324 million) came from tuition and other fees levied from its 7 285 students of whom 59% were women and 40% were African students mostly from the Eastern Cape.

By our estimates, foreign students at Rhodes (constituting 22%) spent over R72 million in living expenses and fees at the institution – excluding expenditure on off-campus accommodation, transportation and indirect impacts like donations in time and money to the university’s charities and community programmes.

Foreign students also often travel for sightseeing – increasing the university’s tourism footprint on the province.

From the government subsidies and grants received by the university, South Africa’s tax-payers got their return too.

“We believe that we exert significant influence, even beyond our province... Last year we launched a new certificate in business modelling which was funded by FASSET and saw us training 90 unemployed graduates from around South Africa as part of a work-readiness programme. A significant number of these learners are now in full time employment.

“This programme will run again this year in five centres around South Africa and so, of course, we are delighted to be making a contribution to helping address what is a critical, national skills shortage,” said Skae, adding that his business school also felt a strong commitment to doing its part in developing the Eastern Cape.

“The critical issues we believe in are effective leadership and job creation. We are doing whatever we can, with the resources at our disposal to teach and research these whilst ensuring that whatever is done occurs in a sustainable manner.”

In 2011, Rhodes’ total payroll exceeded R418 million making it a talent magnet and a major source of direct, indirect and induced jobs in the area.

For example, the majority of Rhodes students live in its 50 residences - which often need servicing and maintenance, and they serve over 10 000 meals daily in its 12 dining halls, making the university an important customer for local vendors, especially in the food and sundries sector.

The university also aspires to be a community partner and development catalyst.

“We also believe that institutions have to consider three pillars and these in effect define our purpose, namely ‘Responsible Leadership’, ‘Engaged Business’ and ‘Integrated Society’,” said Skae, adding, “We were one of the first Business School’s to formally mainstream Environmental Management courses into our curriculum nearly 10 years ago.”

Perhaps, Rhodes’ actual economic impact exceeds our findings. The university also hosts several major annual national, regional and international festivals which bring in visitors and boost tourism revenues in the province.

Another key element is the ‘education premium’ or higher-value economic activities that are undertaken by the Rhodes alumni. Their skills directly benefit the economy and indirectly enhance the capacity of the Eastern Cape’s workforce to confront the challenges of the 21st century.

“We run a number of courses for leaders and managers who are in the private sector, public sector, NGOs and schools … Over the years, one of the most popular courses has been Project Management and we have attracted many public sector managers from all over the province,” explained Skae, adding that students were also encouraged to do work-based research that addresses relevant local economic needs.