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By 3 November 2021 | Categories: news

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By Pieter Bensch, Executive Vice-President, Africa, Middle East, Asia and Australia at Sage

When President Cyril Ramaphosa launched the second phase of the Presidential Employment Stimulus programme, he described youth unemployment as a crisis. He called upon the private sector, labour, and community to work with the government to create jobs. With two-thirds of South Africans aged below 24 unemployed, we need bold and creative solutions to address this emergency.

Indeed, this is not a challenge that any organisation or sector of society can solve on its own. Turning the situation around will require a range of top-down programmes and policies, along with bottom-up innovation from established businesses and young entrepreneurs. The big question remains: How different stakeholders can help drive employment and entrepreneurship?  

Businesses should pay more than lip service to enterprise development

Formal businesses are arguably the most critical stakeholders in job creation, and there are many tax and regulatory incentives for them to get serious about youth employment. Those who are not using the Employment Tax Incentive (ETI) should consider employing more young people via this programme.

They can also invest in communities via school educational programmes, incubator hubs, bursaries for employees, their children and youth candidates, learnership programmes for graduates and other similar initiatives that help build skills and confidence among the youth. These initiatives could help businesses develop their suppliers, customers, and employees of the future.

Options include working with programmes like the Youth Employment Services (YES) organisation to create employment. At Sage, we have partnered with YES to create employment for 160 youth from previously disadvantaged communities. We also run youth development initiatives such as a graduate programme to support young people with life skills, work readiness training, workplace mentorship, and coaching. Earmarking some of the procurement budgets for small, youth-owned businesses is another way to help.

Government should minimise the red tape for young entrepreneurs

Efforts such as the Presidential Employment Stimulus programme are to be applauded. However, they will not be enough on their own to create employment for the millions of unemployed and underemployed young people in South Africa. To make a real difference to the unemployment numbers, government could look at ways of tapping into the energy of young entrepreneurs.

One of the key steps in that direction is reducing the red tape young entrepreneurs face in registering a business and filing tax returns. Other options include tax incentives and making it easier to access funding from the Industrial Development Corporation (IDC) and grants from the National Youth Development Agency (NYDA).  

Apart from focusing on policy, additional steps government could consider include:

·         Making space for young people at the decision-making table. Around two-thirds of South Africans are younger than 35; they could contribute to policy-making structures such as parliament and cabinet. Establishing forums where young entrepreneurs can share their challenges and aspirations with decision-makers could catalyse innovation and spark new ideas about fostering youth entrepreneurship.

·         Providing specific entrepreneurship training. Many private sector companies would be excited to work with government entities like the Department of Small Business Development and NYDA to create more mentoring and training opportunities for young entrepreneurs.

·         Investing in infrastructure. Bringing down mobile broadband costs could enable more young entrepreneurs to participate in the digital economy. At the same time, reliable public transport could help them get to the places where the economic opportunities are.   

Youth should seize the moment

Young people face trying times, especially if they do not have the capital or tertiary education. Entrepreneurship, even starting small, can be an excellent way to start building experience, developing skills, and earning money. One place to start if you’re an unemployed young person is to look at which services and products people in your community need.

If you can’t afford the time or money for full-time tertiary education or need to supplement your university education with vocational training, there are many free and low-cost online resources to explore via e-learning platforms. They range from university courses on Coursera and Moov, and short online courses on Udemy to LinkedIn Learning and providers that offer certifications in practical business or IT skills.

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