By Jessie Taylor



Africa’s population is growing, and in the next three decades, 60% of the continent’s population will be under the age of 25. But in South Africa, this growing population of youth face one of the highest unemployment rates in the world.

However, South Africa’s youth also show a high propensity for entrepreneurship. More than half of all South African entrepreneurs are youth and encouraging more young people to start business interests could be the key to unlocking South Africa’s economic potential.

Here are five reasons why South Africa needs more youth entrepreneurs:


1. Reducing youth unemployment

South African youth are the most disadvantaged in the labour market. The latest Quarterly Labour Force Survey released by Statistics South African showed that the unemployment rate was 64% for those aged 15 and 24. It stood at 42.1% for those aged 25 between 34. In comparison, the national rate stands at 34.5%.

Only around 2.5 million of South Africa’s 10 million young people aged 15 to 24 are active in the labour force. And those that are inactive say their primary reason is discouragement, in that they have lost hope of finding a job that suits their skills or in the area they reside. The antidote is for entrepreneurs to create their own employment, in the areas in which they live.


2. Building the informal sector

Young entrepreneurs working in the informal sector outnumber those in the formal sector. While historically disadvantaged communities often lack access to resources and education, their informal sectors offer an opportunity for young businesspeople to make a lasting difference. More than half of South Africa’s unemployed population live among the 22 million South Africans whose homes are in townships and informal settlements. This means that entrepreneurial activity that impacts these areas is likely to have some of the most meaningful impacts, in areas that need it most.


3. Creating more jobs

Not all entrepreneurs hire staff and those who are hiring staff tend to employ between two and four people. Especially in the informal sector, entrepreneurs are not likely to hire ten or more people. This means that making an impact on unemployment through entrepreneurship requires large-scale entrepreneurial activity and cannot rely on only a few business owners.

In addition, entrepreneurial activity in townships has been found to stimulate widespread economic activity. Township entrepreneurs provide a vital network that sustains small businesses in the township economy, with almost half relying on other small businesses as key clients and in turn creating job opportunities.


4. To encourage other young entrepreneurs

Young entrepreneurs receive the least support in terms of business development, with only around 15% of business development services directed toward youth. This is even worse in rural or township areas, which often do not have traditional small business support structures. But the more youth who enter into entrepreneurship, the more likely there are to be programmes developed for this sector.

One such organisation is the Youth In Property Association (YIPA), which is focused on transforming the property sector by increasing the active participation of young people through its education, employment and entrepreneurship initiatives. YIPA is a youth managed and driven organisation aimed at representing, protecting and advancing the interests of all youth within the property industry in terms of ownership, management and social development.


5. Poverty alleviation

Research has shown that young entrepreneurs can earn around R10 000 a month, immediately uplifting them from the poverty associated with unemployment. This amount almost doubled for entrepreneurs working in the formal sector. In addition, the job opportunities created by entrepreneurs also uplift others out of poverty.

But youth entrepreneurship has an even bigger impact on the communities in which these young people live. Youth unemployment can lead to socio-economic concerns such as poverty and hunger, and higher crime rates have been recorded among youth without employment. Creating employment thus has a positive impact on the individual, their family, and society as a whole.


Entrepreneurs are significant drivers of economic development and job creation in South Africa, potentially offering a solution to large scale unemployment.

To truly transform South Africa’s economy, the country needs more youth entrepreneurs to create a lasting impact on job creation and poverty alleviation. This requires us as a society to encourage entrepreneurship as a career path, rather than as a last resort, and to provide these young people with the support they need to start enterprises.