Sectors that shed jobs were agriculture (44000), trade (15000) and government (2000). The current economic situation means that young people who are currently studying have limited chances of getting jobs, even if they are qualified.
This should inspire a change in academic institutions. Universities can no longer just prepare young people to be employed - they should work towards preparing young people to be entrepreneurs and creators of jobs.
Universities should collaborate more with start-up incubators and accelerators to develop job creators. YCombinator is a great example of a creator of employers in the US. It selects an elite group of young entrepreneurs. Months of intense work culminates in Demo Day, when investors and venture capitalists flock to hear their pitches. Any one of them might turn out to be the next DropBox (class of 2007) or Airbnb (class of 2009).
YCombinator is one of the first start-up accelerators to be formed in the US in 2005 followed by TechStars, another leading start-up accelerator. These two are considered to be premier accelerator programmes globally. In South Africa, the Bandwidth Barn, a subsidiary of the Cape Innovation Technology Initiative (Citi), is one of the leading incubators in the country. (Disclosure: I served as board member of Citi for 10 years)
The Brookings Institution recently outlined a clearer picture of what they do. Research literature has also been reviewed on the effectiveness of accelerators and incubators to achieve their stated aims, some best practices for accelerator programmes, and some figures on the size, scope, and impact of these organisations.
Incubators and accelerators are playing an increasing role in start-up communities around the world. There’s significant potential of accelerators to be job creators, and for these benefits to spill over into the broader society. However, the measurable impact of accelerators and incubators have on performance varies widely among programmes - not all accelerators are created equally. Quality matters. I believe incubators can play a very important role in developing young people who can create jobs.
Start-up accelerators and incubators support early-stage, growth-driven companies through education, mentorship, and financing. Start-ups enter accelerators for a fixed-period of time, and as part of a cohort of companies. The accelerator experience is a process of intense, rapid, and immersive education, compressing years’ worth of learning-by-doing into just a few months.
The following are just some of the African leading incubators that are worth supporting: LaunchLab; Cortex Hub; Innovation Hub; iHub (Kenya); MEST Ghana; Bandwidth Barn (Woodstock and Khayelitsha); Nelson Mandela Bay ICT Incubator; RaizCorp MTN Solution Space.
Growth in US-based accelerators really took off after 2008, as it did for start-ups, early-stage capital, and venture investment more broadly. The number of US-based accelerators increased by an average of 50percent each year between 2008 and 2014.
Currently, a number of academic institutions have adopted incubators and accelerators as part of their programmes. Stanford and Harvard University are leading in this regard.
In South Africa, LaunchLab, an incubator set-up by the University of Stellenbosch has pioneered the concept of including incubator within an academic institution. It allows students to set-up their businesses on campus and supports them to grow.
What is now needed is to bring incubators closer to academic institutions with an aim of turning students into job creators as opposed to being job seekers.
In the next few months as part of providing useful information to our readers we will be sharing information about incubators and accelerators.
The outcome of our work will become a useful resource for young people to know where to go to become creators of jobs.
Wesley Diphoko is the Online Editor for Business Report and head of Independent Media’s Digital Lab.