For big childhood trekkie, there is no greater frontier than the odyssey into Space. The journey into that unknown expanse of the universe and the idea of alien nations acting hostile or forming new alliances. I guess the most daunting of action would be setting sail in a technology that you don't know if it will serve you well on the journey. The famous "Space the Final frontier" prologue to the tv series is not mistaken to call members of Captain Kirk's team brave.
In the recent history of our great nation, There has not been a greater threat to transformation and economic development like Youth unemployment. The trade unions call it the ticking bomb, while the Governor of the South African Reserve Bank calls it a crisis. It is as shocking as it is as threatening, more than 50% of South African youth are unemployed. Only 5% of historically disadvantaged youth that make it to the University will graduate. The greatest threat being a generation of South Africans doomed to dependency on the social grant system and an exaggerated burden on the fiscal policy.
Youth Economic Development is a journey many dread taking, as last year's march to Cosatu House by the Democratic Allience showed, one also with a few friends. Ultimately problems do not eliminate themselves and as a nation we need to brave up to the journey and tackle the problem head on. It is a frontier worth exploring and a journey necessary to be embark on.
Youth Employment Mainstreaming
The primary approach to tackling the challenge has been the need to create an environment where it is commercially appealing to employ the youth. Basically make it part of labour market culture to employ young people. Such mainstreaming activities may take several shapes and forms but in recent years the DA has led the way with a concept they call, "the Youth Wage subsidy" The tenant of their proposal is to create an incentive for business to employ young people by covering a portion of their wages. As far as mainstreaming ideas goes, this is both bold and radical. It is a long way away from other interventions which include market education and appealing to a sense of morality by employers to care enough to do something about the problem.
There is however an opposing view that focuses exclusively on labour market trends and the historic nature of employee and employers relations. That history has taught them that, the classic economic view that if parties maximise their economic goals, wealth is invisibly distributed amongst the player is wrong. Employers have a history of exploitation and the existence of a subsidised work force will result in profiteering. Why would the jobs of adult employee's be safe when the youth can make cheaper employees. Our history with economic migrants supports such theories with cheaper labour marginalizing South Africans in other sectors.
What is missing in the whole picture and perhaps unfortunate is the idea that there is no political solution to the problem. I am a believer in the South African dream, till this day there is no grander moment for me than the TV ad where South African outliers declare that this country is alive with possibility. So it is as unthinkable as it is shocking that as a country we do not have a Social contract amongst all role players on how to solve such challenges. Our National Skills Development Strategy (NSDS) identifies Further Education and Training (FET) institutions as the purveyor of skills to the unskilled youth of South Africa. The assessment programme within these institutions requires experiential or vocational exposure for a period. Effectively if the FET programme starts producing at rapid scale, placement should match up. This is far from the truth in our reality as a nation.
The labour market is not oriented to fulfil such a role. As an idealist I wonder why if sector skills needs in the NSDS says these FET training is needed, where are the employers to close the link. Thus in mainstreaming youth employment the premise would be to seal it in a social contract between labour, government and business.
Our post 2009 recession reality has taught us that government interventions that stimulate economic growth like the American Quantitative easing require clear deadlines and market buy in. Youth wage subsidies would not be undoing an indifferent past like affirmative action, and thus should not be implemented without time lines and a social gain programme. The existence of cheaper labour should not create an economic rent and business ambition to create new wealth and growth is subdued. The definition of social gain in this regard should be left to parties in the contract.
Youth Entrepreneurship
Entrepreneurship is being promoted in South Africa as a possible source of job creation, empowerment and economic dynamism. There has been a migration in policy and the voice of opposition parties increasing attention on the subject. However, despite this attention, there has been no systematic attempt to look at it from an angle of a South African young person with his inherent challenges.
We tend to incorporate the youth into the general adult population when it comes to some of the policy decision that drive business development and we ignore their efforts to forge a livelihood through enterprise activities. We have stopped very short of understanding the potential benefits of youth entrepreneurship as a means of improving youth livelihoods. Can youth entrepreneurship be promoted as a viable career option? What obstacles stand in its way? And what policy measures and strategies can be initiated to support it?
The need to encourage Youth entrepreneurship cannot be understated and below are some of the reasons why it should be encouraged:
1. Employment: Enterprise has the potential to create employment opportunities for both the self-employed youth and other young people;
2. Redress: it has a less centralized platform to bringing the alienated and marginalized youth into the economic mainstream;
3. Socio-economic Solution: it has the potential to impact on some of the problems and delinquency that arise from joblessness including crime and drug abuse;
4. Innovation: Youth resilience is associated with innovation;
5. Local economic development: it has the potential to revive and revitalize local community;
6. Accessing fast paced economic opportunities: Young entrepreneurs may be particularly responsive to new economic opportunities and trends;
7. Skills development: Enterprise helps young women and men develop new skills and experiences that can be applied to many other challenges in life.
Naturally the irreplaceable value of experience and post graduate education has meant that youth owned business will have the following inherent challenges. (Excuse me for generalizing, but SEDA or a similar South African institute should commission a study to verify):
1. Youth businesses face problems of access to resources such as capital, especially if it is to be loaned, given the South African strict loan regiment under the National Credit Regulation (NCR). This is particularly more challenging for young people from impoverished communities, who do not have alternative sources;
2. The result is that young people will start their enterprises with lower levels of initial capital and will operate very small businesses that are at a survival level (from hand to mouth as affectionately referred);
3. The biggest challenge with a low capital business includes lower market value or lower inventory book. This has played into the hands of heavily invested foreign subsidized small businesses, especially in the retail sector (a train vegetable vendor vs. a 500 product tuck shop);
4. The result then becomes that youth entrepreneurs are engaged in a narrower range of activities. They tend to operate from homes or streets (lack of access to space);
When the National Youth Development Agency (NYDA) was found, it was to help redress these challenges and accelerate the youth through this path. But like the journey into space, there were speed bumps and blackholes. These challenges are not unique to NYDA but most Developmental Finance Institutions face them. The commercial orientation of entrepreneurship and the subsequent implementation of business capitalisation by a bureaucratic process has left gaps in the system. The resulting gaps includes lack of mentoring programmes; lack of specialised financing where the youth are treated differently business plan to business plan; supplementary services for the youth like training over and above vouchers and loans or development planning; and lack of employees with entrepreneurship background within these institutions.
How I pray we can orb into the speed of light and we accelerate this process of empowering the youth. The speed has become more important than ideological differences and political point scoring. The power to create a utopian South Africa is in the hands of South Africans and we are well placed to reverse the ticking and avert the crisis if we pull together.
