The unemployment figures that were released recently by the government were not unexpected, but they’re harrowing and damning. At 349%, South Africa has the highest official unemployment rate in the world. Add the expanded definition that includes discouraged job seekers and others who are not economically active and it’s a staggering 46.6%.
This expanded unemployment rate translates to almost 11 million people, people just like us who have no jobs, are not in training and have no means of providing for themselves, or their families. It’s a catastrophe.
An entire sector has emerged to support the goal of small business development. Everywhere we look, we read about new job creation initiatives, youth development programmes, enterprise and supplier development activities, and joint initiatives by the private sector and government (such as the Youth Employment Service [YES programme] ), geared to encouraging employers to employ jobseekers and making it easier for them to do so.
But somehow, despite billions of rands invested by the private sector and the earnest if at times clumsy, efforts of the government to reverse the relentless downward trend, we (and here we include ourselves, as business growth specialists) are failing dismally to change the lives of those who need it the most./ The truth is that to absorb the almost eight million unemployed jobseekers who make up the 349%, We would need to create 22 000 jobs per day for a year. That is the equivalent of starting and launching four businesses the size of Vodacom, every day. For a whole year.
Clearly, we are not even scratching the surface by doing what we have been doing for the past 25 years. We need a radically different strategy, a new level of bravery, and a nation-first mindset. There are three things we can do now to turn this tide.
The government has created a well—funded ecosystem of business support and job—creation or organisations, including the Small Enterprise Development Agency, the Small Enterprise Finance Agency, the Industrial Development Corporation, the Department of Trade, Industry and Competition, the Department of Small Business Development and others. This ecosystem is bolstered by hundreds, if not thousands, of private business—development support organisations of varying size and focus areas. A common blind spot in the sector is measurement. Inputs are measured how many people trained, how many businesses plans drafted, how many logos developed, how many mentorship hours spent, how much money lent, etc. But what really counts is the measurement of meaningful and lasting impact — how many self-sustaining businesses have been created.
In a country desperate for economic growth and jobs, we should be measuring our success solely in terms of growth: did the business grow its turnover and profit, did it stay in business longer because of our support, and how many jobs have been created and sustained? Clearly, if we need results, we need to invest in and support organisations that know how to build job-creating businesses that last.
There is a tendency in the highly competitive business sector for people to play their cards close to their chest, jealously guarding intellectual property and being wary of collaboration with other players. In the sphere of job creation, this mentality is small-minded, creates silos and crushes innovation. It is time to start working together and pooling our respective strengths to create solutions that are national, transformative and much bigger than any one of us can deliver on our own. Without such a mindset, we will never make a dent in improving the lives of the ever-growing number of people with no work.
Finally, we need to face the difficult truth, which is that in our lifetime we will never create all the jobs we need to meet our growing population needs. Despite the passionate effort, we have created only eight million jobs since 1994 and we don’t have the luxury of another 25 years to create the next eight million.
Given this harsh reality, we clearly need a mitigating strategy – a holding pattern of sorts – that focuses on improving the lives of the unemployed now, while we chip away at the structural issues hampering our economic growth. We need a radical increase in the funding and support of social enterprises and not—for—profit businesses that meet the gaps where the government lacks the resources or the human power to provide these services.
We need support for organisations that provide access to healthcare, decent education, proper sports and recreation facilities, social services for the aged and vulnerable and more. It’s time to admit our collective strategies have failed and to have the courage to embrace new and radical ways of solving unemployment. Let’s discard what is not delivering, and radiCally change our approach —Fetola Business Development Service.