The pressure is mounting on South Africa and across the globe for the youth to be more involved in policy making as countries scramble to deal with the impacts of the Fourth Industrial Revolution (4IR).

New laws needed for small enterprise development to ensure a drastic decline in youth unemployment in Africa

While tech-savvy youngsters in Africa have started making their mark on the digital economy, support for these entrepreneurs from governments and the private sector is insufficient. Also, many of them fear that education systems and skills training are not adapting fast enough. The result will be future leaders who are ill-equipped, rising unemployment rates and a growing inequality gap. Over the last two months, policy transformation has been a key discussion at the International Labour Organisation’s (ILO) Global Youth Employment Forum, and the World Economic Forum (WEF) summit on Africa.

The WEF meeting in Cape Town saw delegates adopting the Africa Growth Platform (AGP), which aims to help the continent’s community of start-ups grow and compete in international markets. It follows the ILO conference in Abuja, Nigeria, which was attended by more than 200 young change-makers from 65 countries, including South Africa, who warned that “business, as usual, is not working for youth”. They called for a range of “systematic changes” in youth employment legislature, including that macro-economic and sectoral policies target employment instead of just economic growth, and that laws build resilience to climate change.

The youngsters said at the end of the forum that there must be greater investment in access to quality education and skills development systems. These needed to be complemented by tailored approaches to lifelong learning and skills certification, which utilised technology and protected the rights of those in internships and apprenticeship schemes. According to the ILO, participants agreed that labour market policies should place more
emphasis on job quality and targeting. This would allow benefits to reach young women, young people with disabilities, young migrants and refugees, young platform economy and informal sector workers, youth in the rural economy and in hazardous occupations, and those from indigenous and ethnic groups.

There also demanded a bigger focus on transitioning from low-quality, low-productivity self- employment to more productive and innovative entrepreneurship. The recommendations have been backed by ILO Director-General Guy Ryder, who often advocates for the youth identifying their own solutions, instead of them only coming from other stakeholders like governments and businesses. To help realise these demands, the ILO has launched what it calls a knowledge facility, which is a digital platform of tools, publications, databases and thematic resources to support action on youth employment.

While the platform will no doubt prove to be a useful tool, the reality is that African countries – even those with strong economies – have extremely high unemployment rates, especially amongst youngsters, and a concerted effort by all stakeholders is necessary to dramatically change this picture. WEF believes that its new growth platform for Africa will not only reduce unemployment rates amongst the youth, but it will help ensure that they have the right skills for the 21st-century workplace.

The aim of the AGP is threefold:

  • Secure commitments from governments to implement policy reforms to stimulate and accelerate business growth
  • Build a community of investors, whether they are from the private sector, foundations, multilateral institutions or corporate intrapreneurs, to enable better coordination and pooling of resources that could facilitate larger subsequent rounds of funding
  • Create and sustain a community of start-up businesses themselves, promote collaboration and share best practices

The forum says an innovative approach is needed to help Africa’s start-ups reach a scale where they become sustainable and are backed up by data. Two-thirds of Africa’s 420 million young people are currently unemployed. Although many of them have an entrepreneurial spirit (early-stage small enterprise activity is 13% higher than the global average), a total of 14% of the region’s start-ups are more likely to fail compared to elsewhere in the world. This is largely due to insufficient support and infrastructure.

“Africa’s entrepreneurs are its greatest economic asset but spirit and resourcefulness alone are not always enough to help them succeed. Too often start-ups and innovative enterprises fail needlessly through lack of additional finance or overly burdensome regulations,” says Elsie Kanza, who heads up WEF Africa.

“The Africa Growth Platform brings together all the actors, governments, investors and the businesses themselves necessary to create an environment where they can fulfill their potential in terms of growth and employment.” To create momentum, quick wins will be the initial focus. They will include looking at what is working in countries and replicating them. Issues such as making it easier to set up start-ups and ensuring that they are paid on time, and support structures such as hubs, will also be a cornerstone of the platform.

“The really exciting part of this initiative is that it puts entrepreneurs are the heart of it, with a collection of actors will to combine forces to reach one million small businesses and help them grow,” Kanza said at the WEF summit.

Very few African countries have started preparing their young citizens for the future of work, despite the continent’s youth bulge. A total of 60% of the population is younger than 35. Rwanda and Kenya stand out as beacons for preparing youngsters for the digital economy. While WEF continues to punt public/private partnerships on start-ups as one way to reduce unemployment and inequality, it believes that without a focus on policy formulation, these efforts will not have the desired impact.

Regulations will not only help ensure that digital enterprises can grow, but also that appropriate education and employment opportunities are accessible to all young people. It is advocating for policies to focus on promoting life-long education in organisations, which will help youngsters adapt to an ever-changing workplace.

By: Amy Musgrave