SA REQUIRES AN ENTREPRENEURIAL REVOLUTION

In the past the general message to the youth in our country was to “study hard so you can find a good company to work for”, choosing to become an entrepreneur was seen as a risky career choice.

Unfortunately, times have changed, University degrees and diplomas no longer hold the promise of jobs for young South Africans. We currently have 600 000 unemployed graduates in South Africa, and this figure will only increase in the future.

A growing number of unemployed graduates are now forced to either rely on their families to support them or find jobs as unskilled workers, such as waiters, clerks and office assistants and as a result we have tens of thousands of people with suitable capabilities . . . forced to enter second-choice careers earning less than their aptitude and qualifications justify. This is a major concern as automotive technology is predicted to replace 50%-90% of all predictive activities humans currently preform within the next decade.

 The reality on the ground!

South Africa’s universities are currently burning and experiencing extremely volatile times. The words we all know too well being chanted at campuses across South Africa – FEES MUST FALL! FEES MUST FALL! The underlying question is not if fees must fall or not, the real question that should be asked is, will free access to education provide our youth with the right skill set and will sufficient job opportunities be available once they have completed their qualifications or will we hear WE WANT WORK! WE WANT WORK! in the near future?

This ever increasing problem in SA is not just confined to graduate unemployment, but unemployment in general, with a current reported unemployment rate in SA of 26.6% this means that there are approximately 10 000 000 people in SA actively looking for a jobs. With this massive demand and a declining supply of jobs where will we find ourselves in the next few years.

So what are we doing to solve this problem?

Although the National Development Plan (NDP), a government strategy to eliminate poverty and reduce inequality, has ambitious goals for the small and medium enterprises (SME) sector in SA, including a target of 90% of employment opportunities to be created in this sector by 2030, small businesses and entrepreneurs continue to face many challenges. To top this off SA has been rated as one of the worst-performing African countries in terms of entrepreneurship. According to the latest Global Entrepreneurship Monitor report released in February 2016.

A new generation mind-set shift has however started to occur in South Africa, with 73% of adults in SA identifying entrepreneurship as a good career choice and about 45% of the working-age population believing they have the ability to start a business — yet only 9.2% go on to do so. (Global Entrepreneurship Monitor Report, February 2016). The reason this low conversion rate could be contributed to various challenges including the excessive legislative red tape, complicated and time consuming company registration and reporting processes, a lack of access to finance and investment, lack of infinite skills required to successfully launch and manage a start-up company, limited credit lines, limited access to mentors and the generally high cost of doing business faced by small businesses in SA.

So how are we going to create jobs in SA?

Entrepreneurship has the potential to be the main driver for job creation in SA, regrettably we have one of the highest failure rates for start-ups and entrepreneurs world-wide. Reducing the burden on small businesses stemming from over regulation has become a key policy objective in regards economic growth strategies across the world. A new attitude and mind set in regards to becoming more entrepreneurial will only get us so far, therefore it is critical for government to create an enabling entrepreneurial environment, minimising barriers to entry and allowing entrepreneurs to enter the market with less red tape and more support. This will ensure entrepreneurs have the best chance of success, and lead to increased job creation and sustainable economic growth and development in SA.

In conclusion, I believe that not all is doom and gloom and that the current circumstances at our tertiary institutions and the looming job shortage faced in SA will create a natural tendency towards entrepreneurship, as more people look to themselves as the engine to grow beyond their circumstances, as can be seen in the ekasi entrepreneurial movement creating an informal economy with township entrepreneurs thriving and small businesses popping up in informal settlements across SA.

Entrepreneurs see themselves and not government as the answer to their societal challenges. The businesses they create will provide jobs, contribute to economic growth and development. Government just needs to create a conducive environment for both formal and informal businesses by reducing the barriers to entry and red tape faced by entrepreneurs, for the entrepreneurial revolution to boom in our country.

I cannot see into the future and I don’t know exactly what the next few years will bring. But I do believe that South Africa needs to create an entrepreneurial culture supported by government to achieve the targets set in the NDP and to provide all South Africans with a job.

October 7, 2016 | By Raymano Venter

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