Entrepreneurship the long-term solution to unemployment says Minister Lindiwe Zulu

BY TAI CHISHAKWE - AUGUST 13, 2014

Small Business Development Minister Lindiwe Zulu has said the long-term solution to South Africa’s current unemployment crisis is to create a nation of entrepreneurs and not a nation of job-seekers. She was speaking at the launch of the Gordon Institute of Business Science Enterprise Development Academy, on Tuesday.

“South Africa is a youthful country. The long-term solution to the nation’s unemployment crisis is to create a nation of entrepreneurs, and not a nation of job-seekers.

“Empowering young people is not an option, but a national imperative. Given the current state of youth unemployment in our country, we must challenge young people of today to seize the opportunities created by our democracy in order to create a better life for themselves and their fellow compatriots,” Minister Zulu said.

She said the academy must assist us to build a nation of entrepreneurs.

While South Africa currently has one of the lowest rates of entrepreneurship activities in the world, the country’s National Development Plan (NDP) states that about 90% of jobs will be created through small and expanding companies by 2030.

“We are painfully aware that fostering a culture of entrepreneurship is not something that blossoms over a short period of time. It takes a long time to develop and flourish.

“In other words, if we create awareness today about entrepreneurship as well as train others to start a business venture, it does not mean tomorrow all these people would start and run successful enterprises. We must also be mindful that not every person is destined to become an entrepreneur,” Zulu said.

She, however, said she remains convinced that young South Africans need to be taught entrepreneurship from primary school right through to university – effectively, enabling young people to consider starting a business instead of looking for jobs.

“We are convinced that if we are to make an impact on the job creation front, we have to invest in small and medium businesses because they are the key drivers of economic growth and job creation. The best investment we can make is in the area of skills development.

“Meeting the NDP’s growth target of 5.4% for the next 16 years would not only guarantee South Africa’s material prosperity, but would be an elevating and inspiring narrative for the country – an optimistic new story,” Zulu said.

She also expressed concern that small businesses have an exceedingly high failure rate, and the majority of the casualties are women-owned businesses.

“Researchers tell us that the failure rate for new businesses is almost 80% in the first year, and only about half of those who survive remain in business for the next five years.

“We are confident that the Academy will help to reverse this trend through appropriate research, quality teaching and a relevant curriculum that responds to the needs of the small business sector,” she said.