Government, big business must enable young entrepreneurs to lead

Countless studies have shown that to grow and reduce levels of poverty and unemployment over time, economies must have the kind of fundamentals that are deliberately geared at reducing and, where practical, entirely removing obstacles such as
administrative red tape out of the path of innovation.

Such obstacles might be seen to be aimed at established big business, but they invariably make it hard for these to partner effectively with smaller, newer entrants into the economy that they wish to add to their supply chains.

To cut corners, many businesses have been found to resort to forms of “fronting” just to obtain/retain good empowerment levels and avoid punitive costs of exclusion from obtaining business. South Africa has high levels of youth unemployment hovering way above 30%. This can no longer continue where young people feel shut out of the economy.

Countless young entrepreneurs have demonstrated impressive resilience under difficult circumstances. Their sheer drive to succeed, to avoid returning to poor environments they grew up in, often in disadvantaged communities, townships, and villages across the country – where it concerns black youth – has provided sufficient impetus to stay in the game. Many of whom support extended family with their earnings, including ailing parents, grand-parents, orphaned nieces, nephews, etc.

This phenomenon is often referred to as “black tax” because it is prevalent in black communities, where “dependant family” lines often cross several generations and stretch beyond the known boundaries of the so-called “nuclear family”.

In practical terms when one young black entrepreneur fails, a whole extended family, village, feels the pain. Failing is therefore not an option.

South Africa’s post-apartheid economic environment has created a wider range of options in terms of sectors where young people can establish and grow businesses in. These range from producing and processing food, storage, logistics, manufacturing, import, and export trade, as well as professional services in media, business management, communications, HR, real estate, beauty and body care, among others.

Most recently, the final cycle of South Africa’s five-year investment drive, saw President Cyril Ramaphosa surpassing a target he set for SA in 2018 – raising R1.2-trillion worth of investment by 2022.

This year, he also announced a new investment target to attract R2-trillion in the next five years, with the energy sector attracting over R120-billion worth of investments committed. This presents a significant opportunity for the youth to participate in the value chain as the country strives to resolve the much-needed energy
generation debacle. There are other sectors in which local and international investors have pledged investments including global business, ICT and digital totalling R131-billion.

With almost all government’s plans to address key issues already in motion, mobilising over R2-trillion in new investment by 2028 to fast-track economic growth is a realistic and achievable target to attract sustainable investments to harness growth and create jobs.

It is therefore not the lack of sectoral diversity that sits at the heart of the challenges facing youth entrepreneurship. It is up to the government and big business to create enabling environments that provide opportunities to venture into entrepreneurship. It is also up to young people to make choices that lead them to the path of running their own businesses.

South Africa boasts a good number of young entrepreneurs who have succeeded despite the odds. Many might not have survived the Covid-19 restrictions, but others have either found innovative ways to adapt their business offerings, emerging in the post-pandemic era even more determined to keep growing, provided a more enabling environment is created by policy makers and financial institutions.


  • Lyndall Singh is a medical doctor and scholar at the Tsinghua University Vanke School of Public Health. He is the chairperson of Global Value Chains Working Group of the South African National Healthcare Products Masterplan

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