Decline of young entrepreneurs in the country

Statistics SA published its Vulnerable Groups Series I Report on the 18th of April 2016 and we have reason to be alarmed.

Youth in South Africa contribute around 36% to the total population. The country is, however, in the midst of challenging times. Over the last decade, young persons between the ages of 15–34 made up approximately 70% of total unemployment and the proportion of economically active youth declined over the last five years. We see worrying trends observed in labour force participation rates, inactivity rates and discouraged work‐seekers. For example, between 2009 and 2014, labour force participation rates (LFPR) amongst adults increased slightly, while that observed amongst youth declined; the inactivity rate amongst youth has remained stubborn at approximately 27,0% from 2010 to 2014; and we are seeing an increase in the share of discouraged work‐seekers amongst the youth.

In 2014, about 2 million employed persons in the country were classified as entrepreneurs, 543 000 of which were youth between the ages of 15–34 years. Entrepreneurs in the report are defined as employers or the self‐employed. The total share of young entrepreneurs declined by 2,7 percentage points between 2009 and 2014. A noticeable decline was observed amongst young females (down by 6,2 percentage points) as opposed to their male counterparts who recorded a drop of less than a percentage point (0,9).

These trends could have detrimental effects on the future work force of this country. We need to create a culture of entrepreneurship in South Africa and promote entrepreneurship as an attractive career option. Small businesses can provide new employment opportunities and contribute to the growth of the country’s economy.