South Africa’s Department of Trade and Industry (the dti) developed a strategic framework that guides all stakeholders within the enterprise development fraternity to integrate support programmes with a view of creating the calibre of youth-owned businesses that are sustainable and can contribute meaningfully to the development of the country.
“South Africa is faced with the challenge of limited and poor participation of young people in the economy. A salient feature of this poor economic participation is high persistent youth unemployment, which means that young people are not acquiring the skills and work experience they need to assist in driving the economy forward.
It is also difficult for young South Africans to secure business opportunities to develop their own businesses. The overall unemployment rate in the country stands at 25% and rises to about 36% if discouraged workers are included in the calculation. Youth unemployment constitutes 73% of the total unemployment in the country. Therefore the ratio of youth-to-adult unemployment is about 1:3 (i.e. for every unemployed adult there are three unemployed youth). About 42% of young people under the age of 30 are unemployed, compared to less than 17% of adults over the age of 30. Only one in eight working adults under the age of 25 have a job, compared with 40% in most emerging economies similar to South Africa. Employment of youth aged between 18 and 24 years old has fallen by more than 20% since December 2008.
Unemployed young people tend to be less skilled and inexperienced; almost 86% do not have formal further or tertiary education, while two-thirds have never worked. The overall determinants of the high levels of youth unemployment are a lack of skills for jobs required by the economy; young job seekers believe the probability of finding a job is so low that they do not even look; lack of work experience; lack of job search capabilities and networks; companies find it risky and costly to employ young people; the rate of population growth among youth far exceeds the number of jobs created by the economy and, in certain instances, the low levels of economic growth.
The dti offers this policy instrument in response to the call made by the New Growth Path (NGP) for the state to provide bold, imaginative and effective strategies to create millions of new jobs that would also address youth unemployment and limited participation of young people in the economy. Through this strategy instrument, government intends to foster youth economic participation by deliberately enhancing youth entrepreneurship, accelerating the growth of youth-owned and managed enterprises capable of contributing to the gross domestic product (GDP) growth rate and increasing youth self-employment and innovation.
The youth constitute 41,2% (14 to 35 years) of the South African population, but the number of young people involved in entrepreneurial activity remains extremely low at 6% of the total youth population. South Africa’s Total Early-Stage Entrepreneurial Activity (TEA) index, which currently stands at 8,9% youth, contributes a mere 10%, representing 0,9% of the total TEA index. Women’s TEA Index tends to fare worse than men. Therefore, there is no doubt that accelerating entrepreneurship among young people will have a positive impact not only on the social plane of bringing equity in the economy, but also by raising the levels of the overall economic indicators of South Africa.
The policy instrument intends providing support schemes for young entrepreneurs with an objective of creating and managing sustainable and efficient businesses capable of providing decent permanent jobs and employment growth. These interventions include mentorship and coaching; youth business incubation; business infrastructure support; linkages to procurement opportunities; youth entrepreneurship awards; youth entrepreneurship promotion and awareness; youth special projects and sector-specific enterprise creation; national youth service programme; and the youth entrepreneurship collateral fund.
The youth entrepreneurship data system and research programme will assist with the monitoring and evaluation of this strategy as it will reveal whether targets are being met and suggest recommendations to close gaps. Government believes that enhancing youth economic participation through entrepreneurship and other relevant integrated interventions cannot be achieved by its efforts alone, but is a shared responsibility that calls for a partnership between itself, the private sector and broader civil society. This document therefore should be viewed as a strategic framework that guides all stakeholders within the enterprise development fraternity to integrate support programmes with a view of creating the calibre of youth-owned businesses that are sustainable and can contribute meaningfully to the development of the country.
In conclusion, this strategy is envisaged to be operational for 10 years, from 2012 until 2022. Its performance will be reviewed using three models, namely the annual and mid-term reviews as well as the major 10-year review. More importantly, the strategy promotes and accelerates the development and growth of entrepreneurship and youth-owned and managed enterprises. It encourages the mainstreaming of youth enterprise development in existing core programmes. It also proposes the development of unique support programmes aimed at promoting the development of youth entrepreneurship and youth-owned and managed enterprises to achieve high impact.”
Source Details:
The dti Youth Enterprise Development Strategy 2013-2023, https://www.thedti.gov.za