Paving the road ahead for young entrepreneurs
Given the endless stream of inspiring media stories that detail the increase of entrepreneurs to positions of power and the rise of the Unicorn businesses (mostly in the tech sector), it is unsurprising that many young and ambitious South Africans are set on becoming entrepreneurs. Worryingly, however, it appears that most young people lack even the most basic business support and guidance - and hence miss out on opportunities and don't have the business foresight, to realise their dreams.
As part of its investigation into skills and youth unemployment in South Africa, Barloworld Logistics recently conducted a Youth Pulse survey, to gain insight into the concerns and aspirations of its students. In recent months, students have made top news headlines through the protracted national protests on the matter of unaffordable university fees.
"Despite this challenge, our research revealed that students still have high hopes for their future prospects, with many looking to pursue an entrepreneurial path and join Africa's growing army of innovators and pioneers," says Shirley Duma, HR Director at Barloworld Logistics.
Notably, over 75% of the Youth Pulse survey respondents indicated that they have considered opening their own business. This result reflects the findings of an oft-cited study conducted by advisory firm Ernst & Young in 2015, which cited a strong push towards entrepreneurial ventures and away from formal employment in Africa.
"In light of this, we believe that an important question to ask should be: 'in what respect do our youth see themselves - as self-employed individuals, or as builders of sustainable and viable enterprises?'" adds Duma.
Indeed, whilst for some the word 'entrepreneur' conjures up images of wealth and success, to others it means being self-sufficient as an individual rather than building a successful growth-related business that would add value to society.
Does definition matter?
The question of definition is reflected in the commentary by Ajen Sita, CEO at EY Africa, when he remarked: "The enthusiasm that young Sub-Saharan Africans have for entrepreneurship is hugely encouraging to see...given that entrepreneurs represent more than 75% of employment in the G20 and rapid-growth economies."
In these rapid-growth economies, is entrepreneurship merely a byword for self-employment - or informal employment - and thus requiring a shift in overall policy and approach amongst educators and leaders?
"We need to ask whether there is a difference between the developed economies' view of entrepreneurship and that of emerging economies," cautions Duma. "The potential rift here could be leading to misperceptions and also the misallocation of scarce resources."
The Youth Pulse survey respondents indicated that the main reasons for wanting to start their own businesses was that they believe they 'have an idea to improve a product/service' (46%) and that they have the right skills to start a business (45%).
Critically, 31% of respondents who stated they would like to start a business indicated that they have received entrepreneurial training. However, only 18% of them said it was part of their coursework at university, while 58% of those with ambitions to start their own business have had no formal training (but would like to receive some in the future).
"The question we must ask of such positive responses is whether the training and education has truly passed on the knowledge and skills necessary to succeed as an entrepreneur," says Duma. "Sadly, most start-up businesses never get to reach their clearly stated objective due to the lack of appropriate skills, guidance and support."
Another key Youth Pulse finding was that almost 70% of those who indicated they have not thought about starting their own business would still like to receive entrepreneurial training. As food for thought, the EY Global study found that the preferred method of learning amongst youth wanting to start their own businesses is "to seek the counsel of experienced entrepreneurs to act as mentors".
Nurturing Enterprising Minds
While it is certainly true that not every individual is cut out to be an entrepreneur, South Africa is arguably running the risk of wasting brilliant minds by not providing the training and guidance required to nurture true entrepreneurs.
"There is a key opportunity here to establish incubators or programmes that specifically teach the skills needed to run one's own business and move from the start-up phase to a fully fledged company," says Duma. "Such a programme should draw strongly on partnerships with leading companies and experienced business leaders, with mentorship, practical training and networking all included as key components - and indeed, requirements."
In addition, aspiring entrepreneurs need to be taught the 'softer skills,' around how to communicate, negotiate, write, handle the media, apply for funding, how to stay positive, energised and motivated in challenging times, critical thinking etc. Through the acquisition of these 'softer skills', young people will also begin to understand that being an entrepreneur is not a solitary journey - it requires strong 'people' skills, and the ability to recognise and work with people of a high calibre from various backgrounds, with the energy to continuously deliver on their promise.
"In addition to formal entrepreneurship training, there is an opportunity for companies to begin creating instructional materials that can guide and inspire energetic entrepreneurs," concludes Duma. "Every sector and industry has its own unique challenges and opportunities, and leaders should be willing to part with this important wisdom in order to support the next generation of pioneers and industry disruptors."
To download the full report, click here: http://blog.barloworld-logistics.com/2016-youth-foresight-report