South African youth entrepreneurship lagging
South African youth are not as enthusiastic about entrepreneurship as their counterparts abroad and could be short-changing themselves, an expert said on Tuesday.
Kobus Engelbrecht, of the Sanlam/Business Partners Entrepreneur of the Year competition, said the 2011 Global Entrepreneurship Monitor (GEM) SA report found that only a small number of young South Africans were entrepreneurs.
Only 6.8% of South Africans between the ages of 18 and 24 were entrepreneurs and 10.2% between 25 and 34.
"In comparison to other BRICS [Brazil, Russia, India, China and South Africa) countries, members of Generation Y [those born between 1980 and 1995] in Brazil and China are approximately two to three times more likely to be entrepreneurs when compared to South Africa," Engelbrecht said in a statement.
He argues this lack of entrepreneurship is causing the country to miss out on opportunities and cites entrepreneurship as a factor in the economic growth of the United States.
Forty years ago, 90% of Americans were self-employed entrepreneurs who ran their own companies.
"Today many of those companies are global leaders and drivers of economic growth. It is hence of utmost importance that entrepreneurship is encouraged amongst the youth in order to encourage sustainable economic growth in the future," Engelbrecht said.
The GEM report said the SA youth unemployment rate, 48.2 percent, was almost triple that of Brazil, at 17.8%.
"In poor economic conditions young people are generally the first to lose their jobs and last to be hired," Engelbrecht said.
"With limited jobs available and a soaring youth unemployment rate, one would expect the unemployed youth of South Africa to seek alternative forms of employment."
However, this was not the case, as the GEM report said only 14.3% of South Africans were interested in starting their own business.
"The study indicated that South Africa has the fifth lowest entrepreneurial intent amongst all efficiency-driven economies in the world," Engelbrecht said.