Programmes such as YES aim to diffuse the ticking time-bomb that is youth unemployment. However, we may be fooling ourselves, argues RICARDO DAMES, if we are not able to improve collaboration between government and the private sector, and if such programmes do not include a sharper focus on entrepreneurial opportunities.
DOES entrepreneurship offer a solution to the hundreds of thousands of young South Africans who are unable to find a job? Many politicians and community leaders seem to think so, but they may be very badly mistaken. Statistics on the level of entrepreneurial activities amongst young people indicate that South African youth are not living up to the potential offered by entrepreneurship. In the 18 to 24-year old bracket only 6.7% of young South Africans are engaged in entrepreneurial activity, compared to the African average of 16.3%; and in the 24 to the 35-year old bracket, it is even worse with only 6.3% engaged in entrepreneurial activity, compared to the African average of 20.8%.
What makes matters worse is that this situation persists, even after the South African government adopted a policy stance in tasking the National Youth Development Agency (NYDA) to place youth entrepreneurship at the core of its programmes so that young people can find ways to participate in the mainstream economy. Having been employed within the NYDA for more than five years in a senior management role, and while acknowledging the NYDA mandate as broad youth development, I can attest to the challenges it faces in delivering on this mammoth task. It will take more than making one agency responsible for increasing the number of young people opting for the entrepreneurial route. It needs to be a national priority where we learn from the mistakes of yesterday, understand what is working today, and prepare ourselves for tomorrow.
So what can we learn from the past? Firstly, we need to focus on the most productive segment of the youth. The National Youth Commission (NYC) Act of 1996 defines youth as people between the ages of 14 and 35, while in its programmes the NYDA had as its target audience the cohort 18 to 35. The NYDA designed and implemented a range of offerings including employment readiness support (such as life skills training, job readiness and career guidance) and entrepreneurial support (such as business development service vouchers, mentoring, grants and access to market linkages). However, little distinction was made in the programmes to consider which segment of the youth market it intends reaching. Programmes need to be more focused so that the most productive age-bracket is targeted.
Understanding educational trends is another consideration deserving better attention. While it is exciting that in the period 2008 to 2014 there was a vast improvement recorded in the educational progress made by young people between ages 14 and 35 years, this, unfortunately, did not prevent their labour market prospects from deteriorating during this period. Despite the realisation that education and training are key services that have the potential to promote sustainable livelihoods, this remains meaningless for youth if the educational outcomes are not linked to opportunities. And so we may continue retaining past mistakes, whereas what is clear is that the challenges relating to youth employment and young entrepreneurship will become more pressing for 42% of the national population who are youth. This implies that almost half of the population remain faced with a daunting future as the impact of joblessness, inequality, poor health and poverty hits them the hardest.
Collective efforts and multi-faceted approaches are a need, where government, private and civic leadership stimulate economic participation and youth absorption by the economy. This then brings us to today, where we have several national policies providing a guiding framework for the implementation of programmes. However, there is often a big disconnect between what policies say and what actually happens on the ground.
As part of my work in the Eastern Cape on local economic development, I had to do a significant amount of research and reading on youth entrepreneurship. The bulk of knowledge suggests that institutional approaches to supply-side and demand-driven mechanisms for youth must be addressed holistically. Every intervention must be linked and realized as a part of a whole strategy. Supply-side and demand-driven approaches cannot afford to operate in isolation – they are intrinsically linked.
We can just reflect on the impotence of several isolated youth support programs that have been launched and implemented over the last five to ten years. Unless anchored within a full strategy they will remain lacklustre. We are aware that the economy does not have the ability to support all the new labour market entrants and therefore we need to glean from the demand-side information as a critical support base to inform more effective supply-side entrepreneurship-related support programmes for youth. I must say that I’m really excited by the very recent utterances by President Cyril Ramaphosa in Parliament, where he reiterated the importance of the recently launched Youth Employment Services (YES) program to meaningfully and massively impact on youth unemployment.
“The private sector, as part of the YES initiative, will ensure placements occur within all sectors of the economy. Big businesses will also facilitate the placement of young people in small, medium and micro-sized enterprises within their supply chain,” President Ramaphosa said.
He also emphasised that government made progress already with YES: “As we speak, we already have 65 000 young people who have registered and 32 companies who have shown a willingness to provide up to 25 000 work opportunities to young people. These 65 000 young people are spread throughout the country.”
While this initiative must be applauded we need to remain pragmatic and accept that it is not going to be a panacea or magic wand to the more systemic problem of youth unemployment. This epidemic call for a system-wide solution and will need the triple helix of academia, business and government to join forces in creating a more sustainable solution. I wish the YES program well. We should do all we can to support and promote it, but it must be anchored firmly within a collaborative ecosystem.
The best solution, however, remains an entrepreneurial activity. The YES programme will assist in providing work experience and even longer-term job opportunities for some, but the real solution lies with enhancing early-stage entrepreneurial activity within the 18 to 35-year age group. This requires a change of mindset regarding entrepreneurship.
The introduction of entrepreneurship as a school subject, with regular entrepreneurship days, will assist to position self-employment as a career of choice rather than a last resort to survive in poverty. The establishment of entrepreneurial societies in all secondary and tertiary institutions to promote and support budding entrepreneurs from a young age and early stage will go far in changing the entrepreneurship culture, entrepreneurial activity and poverty levels in South Africa.
- Dr Ricardo Dames is the Chairperson of Eastern Cape-based Engeli Enterprise Development; and Board Member of the Institute of Business Advisors Southern Africa, which celebrated its 20th Anniversary September 2018; He also hosts a Forum on the topic “Overcoming Current Challenges in Ensuring Quality Business Advising.