We need reforms to give our youths a chance
FAMOUS writer Mark Twain once said: “There is no sadder thing than a young pessimist.” Spare a thought for young adults who are on the cusp of their careers, yet they aren’t landing good jobs. Now that we know that the current economic panorama for youngsters in our country does not leave much room for hope, how can we build a more optimistic future for our youth?
Youth entrepreneurship is the key driving tool for most economies. It facilitates effective economic growth and development for enhanced sustainability. Young entrepreneurs not only become self-employed, but also the potential for creation of other jobs. The young entrepreneurs become economically self-sufficient, create their own jobs instead of looking for them, and potentially also create jobs for other people.
So who are the youth? According to the International Labour Organisation, there are three main phases of youth entrepreneurship, “pre-entrepreneurship” phase (15 to 19 years), the “budding entrepreneurship” phase (20 to 25 years) and the “emergent entrepreneurship” (26 to 29 years).
The first represents a forming phase or some trial period. Young people usually find themselves in this phase during the transfer from “family nest” or educational process to the position of economically active individuals.
The second reflects a growth phase in which young individuals can already possess certain experience, skills or capital, enabling them to run their own business activities.
The third phase is where young entrepreneurs are, thanks to experience acquired in entrepreneurship, more mature than younger individuals, thus increasing the chance that they can successfully manage a vital business activity.
According to Statistics SA youth unemployment rates are now chronic, having reached 48 percent of South Africans between 15 and 34 were unemployed in the third quarter of 2016. The situation has been worsening during the past eight years, despite a great deal of policy attention and the implementation of a range of public and private interventions.
So why is youth unemployment so high? According to the Global Entrepreneurship and Development Institute, the factors that exacerbate youth unemployment are the current recession, the South African economy which has been growing slowly at 0.1 percent, bureaucracy, red tape and large firm dominance. Indeed, despite being well-educated, competent and mobile, they are unfortunately facing huge barriers to entering the labour market. Why?
The truth is potential employers often expect the youth to have previous work experience, even for entry-level positions. So, in many cases, young people can’t get a job because they have no work experience. And yet, they can’t get work experience, because they aren’t being offered any jobs.
The youth face other challenges, including lack of an enabling environment, absence of technical support on how to run and grow a business, regulatory, logistical and infrastructural challenges and the single biggest constraint for all entrepreneurs – lack of access to finance.
The truth is that the youth have great ideas. However, by virtue of age they lack the necessary skills, but are unable to commercialise these ideas into a money making machine.
Also many young entrepreneurs from a variety of backgrounds and circumstances face age discrimination by suppliers, customers and institutions; a lack of support and belief from family or friends; limited sources of training in entrepreneurial skills and an unfriendly regulatory environment. To start something new is rarely easy. It is naive to believe that to be a good inventor and entrepreneur is the same as being a good businessperson.
Mostly, it is hard work, with genuine help and support from parents, friends, colleagues, businesspeople, government, and others – and a good portion of luck and prayers may help, too. This suggested “network” of support doesn’t exist for the average black youth in South Africa.
Black youth make up the majority of the unemployment figures. Ill equipped for the uncompetitive job market, black youth are encouraged into entrepreneurship where the skills deficit widens and existing ecosystem only caters for established businesses.
All sectors of industry are aligning themselves for the “Fourth Industrial Revolution” where the economy will see itself even more digitised as digital innovation permeates all sectors, as we’ve seen with the early adopters of the financial sector. Who is expected to champion this revolution, where the average of software programmers globally is below 30?
Economy of tomorrow
If the jobs of tomorrow have evolved, should not the education/skilling system of today therefore also evolve?
We need reflect holistically on the entire ecosystem, that is intended to solve for unemployment and entrepreneurship, in the context of our current landscape with our eyes set on the economy of tomorrow.
Young innovative minds and hands need to be holistically capacitated. They need start-up capital and start-up skills from the public or private sector to realise their ideas. They need work and business exposure in organisations and administration, marketing, pricing, bookkeeping and other fields.
So how does our Rainbow Nation arrive at a point where young people have great solutions and given the right opportunities and support to become entrepreneurs?
Some of the strategies to reduce the youth unemployment include the creation of apprenticeships enabling young people to enter the workplace, to government funding for small SMME firms who hire young people. Our development finance institution’s and the collective of venture capitalists still profile youth as “High Risk”, resulting in many young entrepreneurs being turned down, running from pillar to post trying to raise “skin-in-the-game” capital.
It must also be observed that the degree risk is a function of the ecosystem in which it exists. A dysfunctional ecosystem produces high risk opportunities, where healthy ecosystems produce high impact opportunities.
Our ecosystem is fragmented and seemingly only having a short-term as priority is on targets for the financial year, as opposed to growing the economy through real tangible transformation at every level.
We have unskilled young entrepreneurs, we also have unemployed graduates. How about we capacitate the entrepreneur with the graduate? Would this not improve the business profile? Would this not start to be a job creation tool?
We need policy guidelines unapologetically focused on youth, to advance youth entrepreneurship, to support the creation and strengthening of national systems that provide young people with the entrepreneurial skills, resources as well as the networks they need to start and develop new businesses. The Employment Tax Incentive should be complimented by a Entrepreneurship Tax Incentive, to incentivises business to drive youth employment and youth business procurement concurrently.
To address youth unemployment, a multi-faceted approach is needed. This approach requires a co-ordinated government and private sector strategy –supported by development partners where necessary – to endow youth with the skills, training and confidence necessary to contribute meaningfully to the economy.
The most immediate step youth can take is to collectively analyse their priorities and rethink how they can solve them – as entrepreneurs of one voice and citizens of one voice.
Building public-private partnerships would improve the overall business environment, enhance network support and ease access to credit and market information for aspirant youth entrepreneurs.
Let governments and big and small business put youth on an urgent pedestal and commit to implementing reforms that resolve the many festering challenges youth are up against. My money is on youth – All or nothing! Luvuyo Manyi is the executive assistant to chief executive and head of Youth Desk at the Black Business Council.
Young people can’t get a job because they have no work experience.Yet, they can’t get work experience, because they aren’t being offered any jobs.
A queue of predominantly young job seekers stand outside the office of the Johannesburg Road Agency after a post was advertised in this file photo.