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Over the years young South Africans have proven to be extremely resourceful and dynamic with many having turned their great ideas into sustainable business ventures. It was therefore of no surprise when seven of our very own young entrepreneurs made it into the 2014 Forbes Top 30 list of the most promising young entrepreneurs in Africa. This was indeed a great achievement but it brought into question as to how many of these great minds do we have amongst a youth population of approximately 21.7 million. The harsh reality is that the number of such risk takers and opportunity hunters is simply too few in our current context. To address some of the major socio-economic challenges we face as a country such as job creation and poverty alleviation requires a larger cohort of successful young entrepreneurs. This is simply because entrepreneurs create new businesses, new businesses create more jobs and more jobs leads to more household income.
This bleak picture depicting a shortage of young entrepreneurs and the lack of a culture of entrepreneurship in the youth movement is unfortunately supported by facts. The Global Entrepreneurship Monitor or GEM Report for 2013 indicated that only 13% of young South Africans had intentions of starting a business. This represented a decline from 15% in 2012 and a shocking statistic when compared to the regions’ average of approximately 56%. The report further indicated that the total early stage entrepreneurial activity rate or TEA rate amongst youth in South Africa was only 6.8% while other countries on the continent such as Nigeria, Malawi, Zambia and Ghana all had TEA rates of above 30%. The TEA rate accounted for the percentage of youth in the process of establishing new businesses or running existing enterprises that are less than three and half years old. Clearly we need to do more for youth entrepreneurship in South Africa. Similar sentiments have been echoed by various captains of industry and political leaders that indeed we simply do not have enough young entrepreneurs and more needs to be done to encourage young South Africans to become entrepreneurs. This challenge presents itself against the backdrop of a value system that is skewed towards producing job seekers rather than job creators. Yet many young South Africans possess high degrees of entrepreneurial talent and can easily be groomed into the future captains of industry. The young boy selling sweets to his peers on the school playground may have the business acumen that simply needs cultivation over time in order for him to become the next Patrice Motsepe.
The need to produce more young entrepreneurs and foster a culture of youth entrepreneurship has prompted discussions on how best to complement radical policy shifts with innovative and magnetic support programmes for those aspiring to take a bite at entrepreneurship. The recent launch of the 'Step Up to A Start Up' youth entrepreneurship programme, the brainchild of Primestars Media and the NYDA as the main sponsor in partnership with MTN, ABSA Bank, SASOL and other private sector entities, serves as an example of what needs to be done to get more young people thinking about business. It is a new and unique programme that targets youth in schools across the country using cinema and interactive manuals to encourage them to become entrepreneurs. More than 15 000 learners from a large number of rural schools in particular will go through the programme and be afforded the opportunity to have their business ideas funded if successful. They will also have the opportunity of being mentored by successful business people from selected companies listed on the Johannesburg Stock Exchange. Programmes of this nature provide information and guidance on elements of entrepreneurship to young people while at school thus inculcating entrepreneurial thinking and behavior sooner rather than later. Such programmes play a crucial role in fostering a culture of youth entrepreneurship.
The potential is there for all to see and so too is the availability of support. The availability of financial and non-financial support for young entrepreneurs has increased exponentially over time and today the NYDA, SEFA and IDC partnership that provides loans, business development support and mentorship for youth – owned enterprises is one of the largest state support programmes in existence. A staggering R2.7 billion has been allocated specifically to support aspiring young entrepreneurs. Another example is the new NYDA Youth Entrepreneurship Grant Programme that provides grant finance, business development support and mentorship to micro and small youth – owned enterprises in order to nurture a small business culture amongst the youth. Clearly the availability of support is not an issue. A plethora of financial and non-financial support exists for those young South Africans who want to become entrepreneurs.
The major challenge seems to be a lack of information on how best to access this support. Yes the laborious red tape is another challenge to an enabling environment for the growth of young entrepreneurs but most young people simply lack the ‘know how’ of accessing support more than anything else. Information, guidance and support can go a long in fostering a culture of youth entrepreneurship. No single entity or stakeholder has the resources or capacity to provide the right mix of information, guidance and support. It therefore becomes necessary to forge public–private partnerships for the development and implementation of new and unique youth entrepreneurship programmes. It is then up to young people to take the initiative and seize the opportunity to be a successful entrepreneur. Ultimately success lies in the youth themselves to be brave, bold and courageous and realise that in fact the best time to take a risk is when you are young.
- Yershen Pillay is the Chairperson of the National Youth Development Agency.