Massive youth unemployment requires better entrepreneurship support, say UJ speakers

The many support systems for South African entrepreneurs need to be much better aligned, said keynote speaker Mr Tope Toogun at the third annual Dr Richard Maponya lecture at the University of Johannesburg (UJ) on 15 November 2016. The lecture is presented in partnership between the UJ Faculty of Management and the Dr Richard Maponya Institute.

Promoting entrepreneurship is not about creating self-employment with new one-man businesses, said Mr Toogun, the founder of training and consulting firms ALS in Nigeria, and Clarity Education in South Africa.

“The focus of developing an entrepreneurial programme is creating sizable operations that can grow and provide employment for many people.”

Despite many support programmes available in South Africa, entrepreneurship in the country does not compare well with peer economies elsewhere, he said.

“According to the Global Entrepreneurship Monitor (GEM) report, South Africa has the lowest rate of established business ownership of 2.7% in the BRICS community. It is also fourth-lowest in terms of entrepreneurial intentions at 10%, while Brazil is at 25% and China is at 14%.

“Also, when compared with other African countries such as Egypt, Nigeria, Ethiopia and Namibia, South Africa has the lowest rate of total entrepreneurship activity and established business ownership,” he continued.

“The lack of collaboration and alignment between support programmes in South Africa is the reason why, despite a myriad of laws, available capital, and the number of support agencies, the entrepreneurship uptake rate is still very low.”

In conclusion, Mr Tope argued that it should be possible to build on an existing entrepreneurship ecosystem map initiative, published by Simodisa.

“We have not identified all the role players. We need to foster a culture of collaboration, where all role players are talking to one another, and where we are aware of what that person is doing. We also need coordination. We can’t have an entrepreneurial ecosystem that runs itself, so we need key stakeholders like the Department of Small Business Development and the Maponya Institute, shaping those conversations and creating the forum for people to meet.

“Lastly, we need catalysts and amplifiers, the individuals and organisations who spot trends, who can connect the dots between the myriad of activities taking place. More importantly, they will buy into existing programmes, amplifying their messages and expanding their reach, instead of seeking to develop their own programmes.”

Executive Dean of the Faculty of Management, Prof Daneel van Lill, said that South African youth do have many opportunities, but have to take action themselves to make new businesses work.

“South Africa’s unemployment rate is about 27%, and the worst part of this is that youth unemployment is currently standing at 54%. This is really posing a crisis and an indictment to us.

“Looking at the national picture, I see many agencies competing for the attention of entrepreneurs. Should we be more segmented in our approach and ask if it isn’t better to scale up people who have been around for a while and who have shown that they have the guts, strength, resilience and ability to read the market, to see things through [with a new business]?

“To youthful entrepreneurs, I say, I wish you could walk the passages of the Faculty of Management with me and speak with students who are social entrepreneurs, who have been around. They are now in their third phase of making a business work and are starting to finalise their third or fourth big deal. They are seriously scaling up.”

Ambassador for the UJ Centre of Entrepreneurship and Miss SA 2nd Princess 2015 Ms Ntsiki Mkhize urged young entrepreneurs to remember that the clothes and products we all use every day, started out as friends discussing a possible new business idea.

“Entrepreneurship is key to changing our country and our society. Being able to do good business and change communities is something that South Africa could put in its front pocket and its back pocket and run with. If we utilize the opportunities we have, I believe we can make a great country out of South Africa. We have a huge youth potential and the energy’s great: there is so much opportunity to make greatness happen.”

CEO of the Dr Richard Maponya Institute, Mr Roy Maponya, emphasized that it is never too early to start the entrepreneurship learning process.

“However, even if the primary and higher education systems delivered at the required level, the support ecosystem does need to enable entrepreneurship.”

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