The only good thing that can be said about South Africa’s high unemployment rate is that it is so dire that it might finally spur the society-wide entrepreneurial movement needed to fix them, says David Morobe, executive general manager for impact investing at Business Partners Limited.
With 25 million South Africans who are supposed to be economically active unemployed, against 14.9 million employed, joblessness is no longer the problem of the poor – it is clearly everyone’s problem. “This situation is untenable. If we don’t change it, something will have to give,” says David, who believes the solution lies in a holistic programme of entrepreneurial development aimed at the youth that will require participation from all sectors – including government, corporates, schools, unions, communities, and business owners.
It is a movement that cannot wait for our education system to improve, load shedding to stop or municipalities to fix and expand infrastructure. It must happen alongside these improvements or despite the lack of them. It has never been clearer that government, although being the single biggest employer, is in no position to create the required number of jobs, says David. Of the 14.9 million employed South Africans, 2 million work for the government already. If anything, the government will need to implement measures that create enabling environment to grow the economy and create jobs.
Likewise, looking towards the corporate sector for job creation is unrealistic. Worldwide, corporates seek out productivity improvements, not more workers, and emphasise automation to drive their growth.
The answer is to unlock the talent and energy that are present in South Africa’s youth, including among the 63.9% of them who are unemployed.
David points to Lekau Sehoana who, as an unemployed school dropout from Tembisa, one day fixed and spruced up a pair of torn sneakers to sell, launching the Drip sneaker brand and the retail group that has so far grown to twenty stores countrywide. If such examples can spring spontaneously from the fertile soil of innate South African talent, then it can be identified, nurtured and scaled to make a significant impact on the unemployment rate.
For David, such a movement must start at the community level with recognition from local leaders, teachers, business owners, workers and households that required jobs will not be forthcoming from big businesses and government, that we need an entrepreneurial movement, and that it will require input from everyone.
The basis of an entrepreneurial movement must be the development of skills that will allow young people to start producing goods or providing services around which they can build businesses. For this, you need doing skills, business skills and entrepreneurial skills, says David.
Doing skills are technical abilities such as carpentry, plumbing, building or coding. Business skills include basic competence in fields such as bookkeeping, planning, marketing and price calculation, and entrepreneurial skills include the knowledge of where to look for business opportunities, how to spot them and where to find resources to exploit them.
Where schools and colleges already teach these skills, they can be strengthened by, community support and the encouragement of enrolment and course completion. Where such training is not available, community participation can lead to the establishment of night schools and learning clubs for entrepreneurial education.
Unemployed youths who are already trying out some form of business activity must be identified and mentored. The role that successful local business owners can play here is vital. Mentorship can range from occasional advice and encouragement to intense interventions such as apprenticeships. Small orders placed at their businesses can propel young entrepreneurs to the next level and enrich the supply chain of established businesses.
Funds aimed at financing youth enterprises need to be revitalised and expanded, and bank as well as non-bank financial institutions can be incentivised to lend to youth entrepreneurs, says David.
The brunt of South African youth unemployment is borne by the underdeveloped economic nodes, says David. It may be natural for entrepreneurial development programmes to gravitate towards urban areas where resources and markets are concentrated, but deliberate efforts must be made to boost entrepreneurship in the countryside.
If anything, says David, the underdevelopment of the rural areas is an opportunity where certain businesses that struggle in overtraded cities can thrive. The success of major retail chains’ ventures in far flung rural centres such as Thohoyandou illustrate there is still untapped and underestimated potential of the rural economy.
Starting any business is a complicated project that can take years, and many tries to come to fruition. So is the creation of an entrepreneurial culture of resilient, self-reliant individuals. There is no easy fix. It will take whole communities, many attempts, and contributions from everyone to succeed, says David