The Gauteng government’s commitment to create 100,000 entrepreneurs “by next year” is a ridiculous pipe-dream. Even more misguided is the expressed belief that each one of these instant entrepreneurs would employ “at least five people”.
This poorly conceived undertaking has been built on the vain attempt of the Gauteng government to use The Youth and Graduate Entrepreneurship Development program (Y-Age) to play its part in fulfilling President Jacob Zuma’s reckless campaign commitment to create “five million new jobs”.
Gauteng Premier Nomvula Mokonyane has now suspended the head of the economic development department, Khulu Radebe, pending an investigation, questioning the financial management of the programme and for failing to deliver the promised success in the various entrepreneurship development programmes of which he was put in charge. The funding from the Gauteng Enterprise Propeller (GEP) has been cancelled, and the efforts so far appear to have been abandoned.
The sentiments driving this misadventure are, of course, sound. The establishment of small, medium and micro enterprises will undoubtedly play a vital part in creating employment, and it is true that in the most vibrant economies of the world small businesses make out the backbone of the working economy. The most foolhardy notion, however, is the belief that it could happen by decree, out of the blue, in a tightly strained time frame, not for its own sake, but for the benefit of a political agenda.
We are not talking here about the many pavement traders or people who badger us at traffic lights to buy their wares. We are talking about building young, vibrant businesses that generate cash above subsistence level and can provide further employment to others.
Apart from self-employment or working in haphazard contract employment, the people who are real entrepreneurs to the extent that they can employ numbers of others are mostly well-educated, with at least some business experience. How can poor unemployed people from the townships, with the patchy education they are given, go out and right away become entrepreneurs who can employ others?
This all looked like a tailor-made idea to provide an inspiring vision and to find a solution for the country’s intractable unemployment situation. But it shows a regrettable lack of understanding of what it is to be an entrepreneur and what the process is that leads to a successful business start-up.
The world is slowly waking up to the fact that, as Clem Sunter says in his most recent paper, 21st Century Megatrends, “education is out of sync with the job market and the days of relying on a decent academic qualification to guarantee employment” are well and truly over. He also says that “nowadays most kids have to be entrepreneurs and start their own businesses.” Even he seems to make it sound easy. It is not.
Countries serious about this issue are challenging privately successful entrepreneurs to establish incubators and giving angel funders and venture capitalists tax breaks to encourage business start-ups. The whole process requires large-scale participation and the skills of successful private sector business role models. Leaving it to provincial government bureaucrats is an unlikely recipe for success.
Much more inspiring have been the efforts of a man like Vuyisa Qabaka, himself a successful business builder, who launched the South African Black Entrepreneurs Forum ( Sabef) which provides a business network for aspiring black entrepreneurs in the early stages of developing their businesses. It is a support system that provides coaching and advice for people as they grapple with their start-ups. It is encouraging because it is a credible private sector initiative.
A more practical approach for the country would be to recognise that even the most passionate aspiring young business builder needs some skill and business understanding to get started. They need exposure to businesses that are already functioning and have the systems and processes that make a business work. Once these have been understood, an independent person with drive and initiative could conceivably plan to head out on their own and start something from scratch. But it is not an instant process and it needs much more than the well-meaning Gauteng authorities to make it happen. Government, if it is going to be of any value in this, should offer very attractive incentives for companies to employ young people in apprenticeship programmes and internships. The chances of getting started with the benefit of some skill and knowledge are much better.
The Skills Education and Training Authority programmes (Setas) had all the best intentions. With 27 of them covering all sectors of commerce and industry they should have worked well and addressed this national priority. But they have really not been a great success.
The Education Seta website says there are an estimated 4.3 million people who are unemployed, most of whom “have little training and few skills”. According to the website, “More than half the Grade 12 learners who leave school every year don’t have sufficient basic skills to get work in any sector of the economy. At any one time there are as many as 7,000 graduates who have university degrees who are also unemployed.” These figures are two years out of date and probably now much bigger.
For the country to hope that some pie-in-the-sky entrepreneurship dream is going to help it rescue this sinking ship is clearly out of the question. The imperative to build and develop skills is not only for the benefit of finding a full-time job, it is also essential if an entrepreneurial start-up is going to work. And then, please, ensure that any initiative to address this should be driven by people who know what it is all about.
Cape Town is building its brand to become a world-class movie-making centre. Could there, in the same way, be a city or a location somewhere in this country, that could become “start-up central”, a place where we could attract the best skills of incubators, venture capitalists and coaches of aspiring entrepreneurs? Could there be a campus, or a type of Silicon Valley, that becomes a centre for creative start-up technology and knowledge? Could there be a place where young, inexperienced people could go and acquire some of the start-up skills that would really work? DM
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Johann Redelinghuys is a partner at Heidrick & Struggles the international leadership consulting business, which bought the firm Redelinghuys & Partners of which he was the founder. He has been deeply involved in career management and executive search all his life. He is the chairman of the South African company and now heads up its board practice working with chairmen and CEOs focussed on CEO succession, strategic leadership review and board evaluation.
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