The idea, often expressed as an afterthought, is that the increasing number of school leavers who struggle to find employment in the formal jobs market should consider creating their own jobs for themselves and their unemployed peers by starting their own businesses.
The latest shock figures from Statistics SA show that the words “choice” and “alternative” are fast becoming inappropriate, says David Morobe, regional general manager at Business Partners Limited. No fewer than 58% of South African youth cannot find employment.
In other words, for the majority of South African school leavers, there is no choice – the formal jobs market simply does not have space for them. Their “choice”, if you can call it that, is between doing something, anything, entrepreneurial on the one hand, and a miserable dependency on an increasingly strained family support network to keep them fed and clothed on the other, all the while becoming increasingly unemployable as they grow older.
South Africa is at a fork in the road: either put the issue of entrepreneurship and self-employment front and centre of its search for a solution, or lose the majority of the next generation as economically productive citizens.
Morobe says the latest dramatic economic setbacks, the recession and the shock unemployment trend have to become a trigger to unlock the aspirations, creativity, innovativeness and ingenuity inherent in our youth to create a future for themselves outside of the traditional job market.
It is no simple task, and it is far from an ideal path to an entrepreneurial, economically empowered society, says Morobe. Starting a business is a complex project, requiring a range of skills and talents. Under ideal circumstances, budding entrepreneurs should have an excellent basic education that gives them the ability to learn quickly and on their own. Ideally, they should have at least a few years' work experience so as to gain crucial knowledge of the world of work in general and of a specific industry. Furthermore, the ideal environment in which to launch a start-up is an economy where consumers are flush enough to try new services without too much persuasion, and families are rich enough to support new ventures. And finally, the ideal culture for business start-ups is one which forgives business failure, and is quick to give someone a second chance.
It can safely be said that the vast majority of South African young people faced by self-employment have none of these luxuries. Yet they have no choice, says Morobe.
“South Africa has to interrogate what programmes are there to support entrepreneurship. Are they sufficient? Are they working? What more can be done?” he says.
A thorough re-evaluation of the entrepreneurship support structures in South Africa must include state-driven initiatives such as special red-tape exemptions and tax exemptions not only for young entrepreneurs starting out, but also for those who support them with loans and investment.
The private sector must also be activated to support a movement of mass self-employment. Experienced business owners and managers are needed to act as mentors to young entrepreneurs, or to provide opportunities to job-shadow in lieu of formal employment experience. Such initiatives can blossom into learnerships of sorts, even if they are not full, formal apprenticeships.
Established companies must create space in their supply chains for young start-ups.
Morobe says we will also need to rethink the way in which we define entrepreneurship, start-ups and business formation. The urgency is such that traditional ideas of registered businesses funded by formal-sector finance will have to take a back seat in favour of a loser definition, an embrace of the so-called “gig economy” where masses of freelance-type entrepreneurs bid for short-term contracts and opportunities – anything that can keep them economically active, moving forward, and prevent them from falling into the debilitating despair of long-term unemployment.
It is from the seed bed of such a movement that a small percentage of them can sprout into formal businesses, and a handful may even become high-growth, high-impact entrepreneurs who have the ability to disrupt entire industries and drive the economy forward.
Even though youth unemployment is to a certain extent a world-wide phenomenon, the levels in South Africa are unprecedented. What is required is an unprecedented response to the crisis, says Morobe.