Growing The Entrepreneurial Acumen Of Youth And Women In South Africa

The entrepreneurs that I speak to and mentor, they have these ideas that they haven’t researched, they haven’t tried to implement them on a small scale and see whether they’re viable or whether there’s a market for their product. They take these ideas and they want to go and look for funding and they can’t understand why a venture capitalist or backer won’t fund their business because it’s such a brilliant idea, why won’t anyone fund me? At the end of the day, that’s all they are, ideas, and how can someone back an idea?

~ George Diab (Interview, Conversations at the Fairlawns)


In July I wrote a few articles on Entrepreneurship, so this article that kicks off this month on youth and women-owned enterprises is the perfect bridge between July and August as far as themes go. Most of today’s blog post is drawn from an unpublished paper that I wrote on Youth and Women Entrepreneurship in South Africa. Some of the observations, I would contend, have wide applicability in most economic contexts in Africa.


It is now arguably agreed across all sectors of South African society that entrepreneurship presents the best solution to solving youth and women unemployment in South Africa. Youth entrepreneurship is, according to Office of the United Nations Secretary-General Youth Envoy, “now being reinvented to entice not just urban young people but rural youths as well.” This context largely informed the establishment of the Department of Small Business Development 3 years ago. This Department is still relatively new and deserves the support of all stakeholders in the economy, including the private sector, by combining areas of expertise to impart knowledge, skills, experience and structured guidance to youth and women entrepreneurs through various innovative and far-reaching national initiatives.


To promote youth entrepreneurship the government has put in place a Youth Enterprise Development Strategy (YEDS 2013-2023). According to a Director of the Department of Trade and Industry, “The aim of the YEDS is to promote youth entrepreneurship, youth self-employment and to increase the number of youth-owned and -managed businesses in South Africa. There are 10 programs which are geared towards assisting young people in business and aspiring young entrepreneurs.”


The South African government has agencies such as the National Youth Development Agency (NYDA), the Small Enterprise Development Agency (SEDA), the South African Black Entrepreneurs Forum (SABEF) and the Small Enterprise Finance Agency (SEFA) that have been created to facilitate youth entrepreneurship by providing loans and grants, skills development, mentorship, networking contacts and markets for young entrepreneurs.

The Black Business Quarterly (October 2017) revealed that among young South Africans aged between 15 and 24, a total of 37.5% or 3.2-million are neither employed nor enrolled in education or training. Young people, and women are the most vulnerable, resulting in an unemployment rate that is almost three times higher than the rest of the global population. Recent figures released by the International Labour Organisation (ILO) suggest that South Africa has the third highest youth unemployment rate across the globe. The article concludes that, “it is a situation which poses a major threat to the country’s ability for future economic prosperity and which hampers the capability to vest a foundation on which a thriving and productive labour force could be built. This group is arguably the most vulnerable to chronic unemployment, poverty and social exclusion, as they are neither improving their skills through education nor gaining the work experience needed to progress in the labour market. Racial and gender inequalities continue to play a significant role in the youth unemployment landscape in South Africa.”

The YEDS was launched 5 years ago, what strides have been made to address these issues is the question? Without a doubt, the policy and institutional framework exists but anecdotal evidence suggests that youth and women-owned enterprises still have a very low survival rate.


What is missing from the mix? How do we address the situation?


In 2015, Madzhivandila and Dlamini of the Small Enterprise Development Agency (SEDA) observed that despite a theoretically enabling environment for youth and women-owned enterprises to start flourishing, most of these enterprises don’t progress beyond the start-up phase. These officials are of the view that a culture of entrepreneurship and entrepreneurial education, amongst other interventions, are necessary to ensure that youth and women-owned enterprises grow and create employment opportunities.


The fact of the matter is, even though women and youth are becoming increasingly involved in entrepreneurial activity, their contribution has generally not been nurtured. Very unrealistic images of entrepreneurship are promoted in the mass media, there is very little social capital to go around, economic collaboration still does not characterize the way we do business as historically disadvantaged Africans in general, monetizing ideas is still problematic and even more importantly, accessing mentorship and coaching programmes is still not widespread because it involves costs. So, most youth and women entrepreneurs are generally still not faring any better than they did 5 years ago when the YEDS 2013-2023 was launched.


There is no doubt that progress has been made but if we insist that entrepreneurship is the key driver of economic growth now and in the future, we will need to see a significant ramping up of institutional investment and efforts and more collaborations between the public and private sectors specifically on mentorship, enterprise creation and development, business coaching, continuing and cutting-edge entrepreneurial education and access to next-level funding to scale businesses.


To substantially grow entrepreneurial acumen, youth and female entrepreneurs operating in underserved areas need to be exposed to more opportunities, practice makes perfect they say. The entrepreneurial journey can never be perfect, and we are all on a learning journey, so, provided the emphasis is on sustained exposure to economic opportunities, mentorship, networking and collaboration, then even more progress shall be made.


Read more insights on entrepreneurship from my interview with successful Chartered Accountant and entrepreneur George Diab here: