Entrepreneurship key to solving SA's youth unemployment crisis

Mail & Guardian

18-05-2025

Get up, start up: Youth unemployment in South Africa increased to 44.6% in the final quarter of last year.
Investing in young people to help them become entrepreneurs is one of the ways corporate social initiatives can tackle South Africa's youth unemployment crisis, business leaders said this week.
They spoke as
The best way to solve unemployment is by supporting small businesses and through entrepreneurship, said Tarry Blecher, chairperson of the department of education's E3 (entrepreneurship, employability and education) initiative.
'People think jobs are all in the big companies, in banks or in Telkom or in Cell C — that's not true. The vast majority of jobs in the country are in small businesses,' Blecher told a business conference in Johannesburg.
The 2023 — 2024
Eighteen out of 100 people aged 24 to 34 years, and 10% of 18-to-24-year-olds, are engaged in entrepreneurial activity, said Anastacia Mamabolo from the Gordon Institute of Business Science.
'That is really shocking because the stats show that there is a really limited number of young people who are participating in entrepreneurship activities, when we compare them to those that are over 35,' she told the discussion.
'In the ages of 24 to 34, there are a lot of people with the intention [to start a business].
'Those intentions are not translating adequately into action.'
Only 8% of the population is engaging in early entrepreneurial activity or have start-up businesses,' Mamabolo noted. 'This says to us there is a lot of work that needs to be done to translate the entrepreneurial process to ensure that we actually grow the different phases and not only focus on the intention.'
The report showed that total entrepreneurial activity, consisting of active businesses less than three months old and new businesses up to 3.5 years old, declined from a pandemic high of 17.5% to 8.5% in 2022‑23, below the 2019 level of 11%.
Established business ownership (more than 3.5 years) almost halved, from 3.5% in 2019 to 1.8% in 2022‑23, after reaching 5.2% during the pandemic.
The managing executive for corporate citizenship at Absa, Steven Zwane, noted with concern that existing businesses are not growing.
'We are not listing new companies in the
Entrepreneurship requires better training for the youth, Zwane added.
Taking note of the latest unemployment data from Stats SA, delegates said there was a need to rethink philanthropic strategies to support prospective young entrepreneurs, while the education system should also introduce the idea of entrepreneurship at an earlier stage.
'The challenge we have in our primary schooling education is the tension between business management and entrepreneurship education,' Mamabolo said.
'We end up teaching business management while entrepreneurship is a creativity, problem-based education that we need to offer. The other thing is, do we have the appropriate methodologies to train our learners to identify opportunities?
'We lack the mentality of saying, 'Let us shape the entrepreneurs to be high-growth businesses rather than being a business that is there to meet a particular need.'
'We also lack the notion of scaling up beyond the boundaries,' she said.
Blecher also noted many youths believed they could either drop out of school and become an entrepreneur or get educated and get a job.
'The more educated you are, the more likely you are to be successful as an entrepreneur,' he said.
He added that, in South Africa's challenging socio-economic climate, the youth need the support of big businesses to give them work experience, capital, networks and expertise to groom them in building a 'meaningful competitive business'.