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Job shaving means entrepreneurship skills more important for SA youth

Jun 27 2017 18:25
Carin Smith

Cape Town - South African youth will increasingly have to explore entrepreneurship for employment opportunities, according to Adv. Kobus Engelbrecht, spokesperson for the 2017 Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS.

“Given low economic growth, companies in the private sector are either shaving jobs or not hiring as they try to prevent further retrenchments. As such, the majority of jobs currently being created are in the public sector, which is counterproductive as this doesn’t contribute to gross domestic product (GDP) or job figures,” said Engelbrecht.

“Currently, young South Africans are not adequately equipped with the skills necessary to start and run a business. If young entrepreneurs are to realise their full potential and contribute to the greater economy, the country needs to mould the youth’s talent, skills and ideas with supportive training and mentorship.”

That is why he claims the national attitude towards entrepreneurship in the country needs to be shifted, especially in the minds of the youth.

SA currently possesses below average entrepreneurial activity levels for young people between 18 and 34 years. Statistics show that many young people in SA will never experience gainful employment. The availability of jobs is expected to diminish even further, given that SA is in a technical recession after the economy contracted by 0.7% in the first quarter of 2017.

SA ranks 58th out of 65 economies in terms of entrepreneurial participation for the age group 18 to 34, according to the 2016/2017 SA Global Entrepreneurship Monitor (GEM). It shows that youth unemployment in SA remains at a high rate of over 60%.

Smart strategies

Engelbrecht wants to see smart strategies identified to bolster youth participation in entrepreneurship.

He points out that entrepreneurship doesn’t appear to be an option driven by unemployment, judging from the results of the 2016 Seed Academy Start-up Survey. Surveying 1 500 start-up entrepreneurs in SA, the survey revealed that only 4% started their business as they were unable to find a job and more than 80% had over a year of work experience before venturing into entrepreneurship.

"If you put the various studies together, you see there are many unemployed people in SA, but few start business because they are unemployed. In comparison to other countries and the rest of Africa it shows South Africans are not engaged in entrepreneurship to the level we would like them to be," Engelbrecht told Fin24.

"It means the youth of SA are sitting there, trying to get employed. Yet as an employer our government is already bloated and big companies have to re-engineer all the time to be more competitive and efficient. So, if government can't employ the youth and big companies cannot either, they have to become self employed by starting their own businesses."

According to Engelbrecht, the problem is that South Africans are told from a young age that they have to study and qualify or just get Matric and go and find a job.

"That is not a recipe that will work for the future. What we as a society has to do, is to train our children about self-employment and starting your own business. Instead of being a nation of employed we must become a nation of employers. For example, in Europe and North America the backbone of the economy is formed by family-owned businesses," he explains.

"We have to teach our kids to have the mind set of an entrepreneur. Find something you like that you can turn into a business. We also see in SA that there are lots of unemployed people, while employers are looking for people with skill which are not available. So, be careful when you choose subjects and your direction of study. Ask yourself if you will find employment if you choose that direction."


Engelbrecht says the SA government has recognised the need to empower young South Africans to explore a career in entrepreneurship and, while there is no simple solution to the poor youth entrepreneurial levels, the more inclusive initiatives that are introduced to encourage young South Africans to participate in the economy, the faster this rate can be improved, in his view.

“The implementation and access to existing youth entrepreneurial programmes has to be improved in order for youth to benefit. Further, more sustainable, long-term measures are needed to encourage young individuals into entrepreneurship and ensure that they have the skills necessary to succeed," said Engelbrecht.

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