World Bank: Entrepreneurship is the solution to curbing youth unemployment
Over the last 2 years there has been an increased focus on entrepreneurship as well job creation for the youth in Africa. South Africa is in the forefront of this, with the government scrambling to find ways to tackle chronic youth unemployment. The Department of Trade & Industry hosted an economic dialogue yesterday to debate the issues and come up with solutions. According to Statistics, the unemployment rate in South Africa among 15 to 24 year olds currently stands at 52.9%, add another 10 years to the group and the numbers jump to 70% The World Bank says the best way to improve these unemployment numbers is to enhance overall economic growth in the country.
The Bank completed a study for the period 1995-2008 that showed that a 1% increase in gross domestic product decreased unemployment by 0.43%. Analysts say South Africa (and businesses operating in it) have to create low skilled, labour intensive jobs to ease unemployment as the main issues facing the country was young people who are neither in school, employment or training. The private sector is further tasked with the responsibility of creating jobs which can assist new entrepreneurs expand into existing businesses or create micro, small and medium sized enterprises. Although most agree that entrepreneurship is the solution to youth unemployment, there are challenges that still obstruct youth entrepreneurship including sluggish growth, barriers to entry and the week entrepreneurial outlook in the country. South Africa is ranked lowest on the 2012 Global Entrepreneurship monitor when compared to our African counterparts, scoring 40% for entrepreneurial capability, compared with Nigeria and Ghana, which had more than doubled the score at 86% each. The private sector needs to find ways to partner with government, but more especially the youth, in order to find innovative ways to encourage entrepreneurship. Our future depends on it!