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Entrepreneurship: The remedy for high unemployment Part 1

The value of developing a strong entrepreneurship environment for our country is immeasurable. Every country that has a great or flourishing economy has one thing in common: a large number of entrepreneur success stories. In an economy, entrepreneurship and small businesses are very important because of the massive impact they have on various elements of a country’s economy.

Firstly, and perhaps most importantly, entrepreneurs have the greatest ability to significantly decrease the unemployment rate in a country. As it stands, South Africa has a significantly high unemployment rate, at 27.7%. According to data from the International Labour Organization, South Africa’s 2016 unemployment rate of 26.7% puts it in the bottom 10 countries in the world. In the world! This is a very disturbing statistic; especially because we as South African’s know the brilliance that we as a people possess and the potential that we have. We can do better!

Also, According to the ILO, South Africa ranks as the 9th worst country for employment in the world, but is the lowest-ranked country with a mature and developed economy. So that means that South Africa is the worst country for employment among countries with as developed an economy as ours. The question then becomes: why; and the more important question is what can we do about it?

I believe that the answer has become quite obvious. Studies conducted show that 90% of SA jobs in the next decade or so are expected to be created by small businesses. Therefore, small businesses are the answer to our dire unemployment situation. However, in order for our small businesses to achieve this, the South African entrepreneurship infrastructure will have to improve greatly.

In the global entrepreneurship index rankings, South Africa ranks at number 58 with a GEI of 327.The Global Entrepreneurship Index is an annual index that measures the health of the entrepreneurship ecosystems in each of 137 countries; it then ranks the performance of these against each other. So then, for SME’s to have a massive impact in the job creation of our country, there has to be a serious increase in our GEI. This means that we have to increase our entrepreneurship ecosystem; which is a mix of attitudes, resources, and infrastructure in the entrepreneurship sphere. (We will get into the ways we can improve our GEI in another article).

So then, in order to reduce the exorbitant unemployment rate of our country, we have to focus a lot of time, funds and energy into supporting the development and sustenance of entrepreneurs and small businesses. Over the past decade or so, our government has developed systems to support entrepreneurship and small businesses in the form of funding and access to infrastructure. However more still needs to be done.

Government initiatives often have a lot of red tape surrounding them and as a result many of these initiatives prove ineffective. I believe that it’s time that we as the entrepreneur community rose up and looked to improve the infrastructure ourselves. We are the remedy for unemployment in our country; it is only in increasing entrepreneurs’ success rates that the overall economy in our country will see rapid and significant improvement; starting with creating a significant amount of new employment.

(Please refer to part 2 for more.)

 

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