Corporate Social Investment in The Informal Economy Is the Springboard to Successful Youth Entrepreneurship #HappyYouthMonthYolandaAD
Stroll down a busy street in any of South Africa’s major cities and you will come across some kind of informal economic activity. From street vendors selling sweets and toys, to people tailoring and creating garments out of their back yards, the South African youth have had to be creative in their means to make a decent living in a country where the government is constantly making promises of employment opportunities but rarely delivers. However, our youth, overflowing with talent, passion and drive, continue to make lemonade from the sourest of lemons.
Under the expanded definition of unemployment which includes discouraged job seekers, the country’s unemployment rate skyrocketed to 43.2% in the first quarter of 2021 from 42.6% in 2020. Our young brothers and sisters continue to bear the brunt as the youth jobless rate based on the expanded definition now stands at a disheartening 74.7%.
These figures are unsettling considering that an investment into our youth is a direct and sustainable investment into our future. If the government and other parties do not intervene these unemployment figures will continue to rise. In the midst of this crisis, many have been forced to seek refuge in the informal sector and walk down the challenging path of entrepreneurship.
The government relies heavily on the informal sector in South Africa as a crucial form of employment and enabler for economic mobility for the country’s poor and unemployed youth. As of 2019, the informal sector accounts for 15–17% of total employment and about 5.2% of the country’s GDP. Yet, very little attention is given to how informal sector entrepreneurship shapes individual entrepreneurial orientation and the emergence of entrepreneurial leadership.
With the lack of investment in informal trade, the lack of sufficient government funding geared towards youth entrepreneurship and not enough NPO support to go around, the youth’s entrepreneurial efforts are often left to squander in an underdeveloped informal sector. As impactful as some informal businesses are in their respective communities and as innovative as these entrepreneurs are, they are less likely to reach their full potential without entry into the formal sector or at the very least, aid from the private sector.
Luckily, different drivers of society are starting to take notice of this growing concern. NGO’s and private companies recognize the informal economy in South Africa as a viable and important form of employment and enabler of economic mobility for the country’s poor and unemployed. Experience in the informal sector can help untrained youth acquire skills, potentially aiding future integration into the formal sector.
As businesses, private investors, and governmental organisations, there has never been a better time to invest in youth entrepreneurship. Private sector support in the form of capital, network, mentorship and guidance is usually the missing ingredient that can catapult youth entrepreneurship ventures to the next level.
This can be achieved through corporate social responsibility programmes in conjunction with various NGO’s such as the National Youth Development Agency. The talent is there. With the help of CSR initiatives that are centred on youth development initiatives like education and training, business funding, social entrepreneurship, and entrepreneurial mentorship, the youth will be able to achieve their wildest entrepreneurial dreams. We can’t think of a better way to empower the youth this Youth Month.
About the Author:
Yolanda Gossel is the Founder and Programme Director at Five Tulips, a South African based sustainability and corporate social investment (CSI) consultancy. Five Tulips forges partnerships between communities, public and private sectors and individuals for social upliftment and preservation of our planets resources and ecosystems.
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