Entrepreneurship as a career - no longer a choice

David Morobe

South Africa requires an unprecedented response to the crisis if we are to deal with the country’s poor economic and employment levels

With the recurring theme of stubborn unemployment figures – now at their highest, and not likely to improve in the next quarter given South Africa’s slide into a technical recession during the first quarter of 2017 – the argument that school leavers should consider entrepreneurship as an alternative career choice is one that has been used extensively.

The idea, often expressed as an afterthought, is that the increasing number of school leavers who struggle to find employment in the formal jobs market should consider creating their own jobs for themselves and their unemployed peers by starting their own businesses.

But, David Morobe, regional general manager at Business Partners Limited (BUSINESS/PARTNERS) says that the latest shocking unemployment figures from Statistics SA show that the words “choice” and “alternative” are fast becoming inappropriate, with no fewer than 58% of the 433 000 who joined the ranks of the unemployed being South African young people aged 15 -35.

“For the majority of South African school leavers, there is no “choice” when it comes to employment, as the formal jobs market simply does not have space for young graduates.” He adds that this so-called “choice” is between doing something entrepreneurial on the one hand, and a dependency on an increasingly strained family support network on the other, all the while becoming increasingly unemployable as time moves on.

Morobe says that South Africa is at a fork in the road. “Either we need to put the issue of entrepreneurship and self-employment front and centre of the country’s search for a solution, or lose the majority of the next generation as economically productive citizens.

“The latest dramatic economic setbacks, the technical recession and the shock unemployment rate trends have to become a trigger to unlock the aspirations, creativity, innovativeness and ingenuity inherent in our youth to create a future for themselves outside of the traditional job market.”

But, Morobe, says that it is no simple task, and it is far from an ideal path to an entrepreneurial, economically empowered society. “Starting a business is a complex project, requiring a range of skills and talents. Under ideal circumstances, budding entrepreneurs should have an excellent basic education that gives them the ability to learn quickly and ideally have at least a few years' work experience in a specific industry before venturing off on their own.

“In addition to this, the ideal environment in which to launch a start-up is an economy with strong consumer spending, wealthy households who have money to fund and support new business ventures, and lastly, a business environment which supports business failure, and offers a second chance. It can safely be said that the vast majority of South African young people facing self-employment have none of these luxuries, yet they have no choice but to explore entrepreneurship,” says Morobe.

To counter this environment, he says that South Africa has to interrogate what programmes are there to support entrepreneurship and whether they are sufficient, easily accessible and if there is more that can, and should, be done.

He explains that a thorough re-evaluation of the entrepreneurship support structures in the country must include state-driven initiatives, such as special red-tape exemptions and tax exemptions not only for young entrepreneurs starting out, but also for those who support them with loans and investment. This must also extend to the private sector, which Morobe says must be activated to support a movement of mass self-employment. “Experienced business owners and managers are needed to act as mentors to young entrepreneurs, or provide opportunities to job-shadow in lieu of formal employment experience. Such initiatives can blossom into learnerships and more formal apprenticeships.”

Reiterating the need to place youth entrepreneurship high on the economic agenda, Morobe adds that as a country, we also need to rethink the way in which we define entrepreneurship, start-ups and business formation to allow for a looser definition. “We should be embracing the so-called “gig economy” where masses of freelance-type entrepreneurs bid for short-term contracts and opportunities. Anything to keep young entrepreneurs economically active, moving forward, and preventing them from falling into the debilitating despair of long-term unemployment is vital. Also, often freelance work is a stepping stone to building an established business.” 
Morobe concludes: “While we recognise that the youth unemployment problem won’t be solved quickly, it is paramount to acknowledge that it requires a range of responses. Along with shorter-term macro-economic and fiscal policies to help drive job creation, embedding entrepreneurship at the heart of the education system and providing an environment of skill acquisition for your people are key initiatives to tackle the poor economic trajectory and high unemployment levels.”