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Entrepreneurial skills development must drive job creation for youth

The government has been in support of the Youth Employment Service hub. Picture: Leon Lestrade/African News Agency (ANA)

The government has been in support of the Youth Employment Service hub. Picture: Leon Lestrade/African News Agency (ANA)

Published Jun 16, 2022

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By Yershen Pillay

Empowering youth to become successful entrepreneurs delivers a multiplier effect, with sustainable SMMEs creating jobs for other unemployed youth. This in turn also contributes to Setas (Sector Education and Training Authorities) with their levies, enabling further support of small businesses.

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Chieta’s (Chemical Industries Education and Training Authority) experience underpins the strong premise that entrepreneurship is undeniably one of the key means at our disposal to dramatically increase job creation among our nation’s youth. With our rampant unemployment numbers, particularly among young people, which Stats SA placed at 66.5% earlier this year, and which was reported as the highest in the world by tradingeconomics.com in December 2021, the need to address this reality is urgent.

We know that there is no silver bullet to address this crisis, but we also recognise that comprehensive skills development for young would-be entrepreneurs must be an essential part of the country’s efforts to create jobs for the youth.

The OECD (Organisation for Economic Co-operation and Development), which represents 38 countries including South Africa, published an article late last year which highlighted the global disconnect between young people’s aspirations to be entrepreneurs and the reality.

The article stated, “Young people show a high level of interest in entrepreneurship. Overall, about 45% of young people report that they would prefer to work as an entrepreneur rather than an employee, and 41% think it would be feasible. However, few young people are actively working on start-ups or managing businesses. Only about 8% of people aged 18 to 30 years in OECD countries were doing so between 2016 and 2020. The gap is quite a drop-off from the proportion who indicate a desire to be an entrepreneur, suggesting that there is substantial untapped entrepreneurial potential among youth.”

This is exactly the scenario that is driving Chieta’s Vision 2025, which aims to support 2 000 SMMEs and 200 start-ups by 2025 with wide-ranging skills development and financial investment. By the end of this year, Chieta will be about a third of the way to achieving this goal. In 2021 we supported 125 entrepreneurs and by the end of this year we will be equipping a further 500 for successful small business growth.

This multi-pronged strategy is producing job creators rather than job seekers, and we are working with higher education institutions and other partners to ensure the entrepreneurs-in-the-making will be enabled through wide-ranging skills development, financial support, and access to market linkages.

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Chieta has an allocated budget of R20 million for small business support within the chemical industries sector in our 2022/2023 financial year. This will assist in delivering training in entrepreneurial skills, incubation programmes, learnerships, bursaries, adult education and training, and other initiatives that contribute overall to small business growth, all of which will be carefully monitored and evaluated throughout the duration of the programmes to ensure success and sustainability.

This is going some way towards offsetting the strong non-entrepreneurial culture in South Africa and instead instilling an entrepreneurial mindset within the ranks of our youth and, working with large-scale enterprises, throughout the supply chain.

Clearly though, Chieta’s mandate is restricted to the chemical industries sector. It behoves organisations and industries throughout the country to recognise the impactful benefits of entrepreneurial and SMME development to the nation. These benefits include job creation, a boost in productivity and healthy competition as small businesses often enter markets with lower prices, new market development, an increase in national income, and the introduction of new and innovative products, services, and technologies.

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As we move into Youth Month, we can choose to celebrate it with an unequivocal commitment to building a powerful cohort of young entrepreneurs and SMMEs in South Africa, for the good of the economic and social development of the country.

“The youth need to be enabled to become job generators from job seekers.” – APJ Abdul Kalam

* Yershen Pillay is CEO of Chieta (the chemical industries Seta)

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