We need re­forms to give our youths a chance

The Star Early Edition - - OPINION & ANALYSIS - Lu­vuyo Manyi

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.

Growth phase

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.

Predica­ment

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.

PHOTO: MATTHEWS BALOYI

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.

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