Recent unemployment stats released by Stats SA showed that the unemployment rate in South Africa increased to 27.2% in the second quarter of 2018, from 26.7% in the previous period. The number of unemployed increased to 6.08 million while the number of those employed decreased by 90 thousand to 16.29 million. In addition, youth unemployment rate in South Africa increased to 53.7%.
This does not make for happy reading. Even with all the interventions that the government is trying to put in place, these numbers make it very clear that more needs to be done.
And so, it is only logical to look to the next generation. With youth comes new ideas, positivity and modern education. Africa is said to be the youngest continent. If youth run businesses can positively impact the economy, they might be the answer to South Africa’s unemployment crisis.
60-70% of new jobs are created by SMEs in most economies, including South Africa. It then means that the best way to increase the rate of job creation is by having new businesses started and enabling existing businesses to expand so they can hire more people. So what more can we do to foster entrepreneurial skills for the youth in South Africa and how can we help to realise their potential?
The Universities Business Challenge
As many African countries are grappling with high levels of unemployment, the need for skills development to enable young people access job opportunities or go into self-employment is crucial. Luckily, some of the world’s biggest enterprises agree. General Electric tasked Cognity Advisory with a challenge: to develop programs that give practical expression to the company’s commitment to skills development and reinforce its support for universities in Africa. As a result, the Universities Business Challenge (UBC) was born.
The aim of the Universities Business Challenge (UBC), now in its 20th year, is to tackle South Africa’s high level of youth unemployment. The competition simulates a business environment and students are given a problem to solve. The simulation is designed to foster skills such as analytical thinking, problem solving, commercial awareness and team-working. The teams taking part also have a chance to win up to R50,000.
In South Africa, the schedule included the first comprehensive training programme for lecturers in entrepreneurship and business management, on integrating simulations into their course delivery. Participants were drawn from all South African universities and we established a collaboration with ENACTUS in South Africa.
Over the years, the UBC has helped over 26,500 students in South Africa, Nigeria and the UK gain necessary skills to improve their employability. But this is only the starting point. To create real change and encourage entrepreneurship from a young age, South Africa’s youth need encouraging at school and university.
Creating start-up accelerators at university
Academic institutions must focus on creating real solutions that tackle graduate unemployment. One way to do this is to create start-up accelerators at universities. This is popular in the US and the UK – for example, UC Berkeley launched its SkyDeck accelerator program, where each of the 20 startups accepted received up to USD100,000 in funding from leading Venture Capital investors. Oxford University has The Startup Incubator, which is free and aimed at students and alumni wanting to start or grow entrepreneur-driven ventures. The incubator has been in operation since 2011 and has taken in over 70 startup ventures ranging from the medical domain to social media data analysis. The University works with the companies on minimum viable product development and initial commercial traction has so far attracted over USD40 million from a range of public and private sources.
tart-up accelerators at universities can be very successful. However, they aren’t as common in South Africa as they are in other parts of the world and really, there is no good explanation as to why this is the case.
If universities do not feel they have the resources or insight to create a start-up incubator, then they need to think about recruiting academic entrepreneurs (academics who are entrepreneurial) as well as purely academic professors. It’s time to get practical and focus on those who can impart entrepreneurial wisdom.
Actively support young South African entrepreneurs
All hope is not lost. The Forbes Africa 30 under 30 2018 list was, for the first time, expanded to include a total of 90 game-changers, all under the age of 30, in each of the three sectors – business, technology and creative. Those included in the list are challenging conventions and rewriting the rules for the next generation of entrepreneurs, creatives and tech gurus. The judges ‘favoured entrepreneurs with fresh ideas and took into account their business size, revenue, location, potential, struggles, social impact and resilience.’ This means that those in the list have businesses of all different sizes and they all cite similar struggles to getting off the ground.
It is important that we look to this list and give them the support, publicity and encouragement they deserve. These are the leaders that our youth need to look up to, whether they want to become entrepreneurs themselves, or not. These are the leaders who can take South Africa to the next level – these are the leaders we need our youth to be inspired by.
The burden of employment should not be placed on the youth of our country – but, with the right support, they could be a significant part of the solution. We need to take responsibility for the opportunities that they will have in the future by teaching them the skills that we know they are going to need. At Cognity Advisory, we truly believe that if we want South African businesses to elevate and operate on a more global level, we must empower the leaders of tomorrow with the right knowledge and skills.