Entrepreneurs won’t create enough jobs without a rethink in how they are supported

It is no secret that South Africa has an unemployment problem. In the past few years, the labor market of the country has been affected by many problems. Floods, riots, permanent power shortages and the Covid-19 pandemic have left their mark.

According to Statistics South Africa, the unemployment rate in South Africa is below 34%, and the International Monetary Fund projects that it will soon exceed 35%, giving the country the distinction the distinction of having the highest unemployment rate in the world.

Entrepreneurship is often hailed as a solution to the problems of unemployment, poverty and inequality that continue to hinder South Africa’s development goals. But, considering complex issues such as job creation, the traditional approach that focuses only on the problem, without thinking about the power and the game process, is unlikely to translate business into success. very important.

For example, in the last 20 years, new and physical industries, which are intended to promote technological progress and trade, have developed around Africa. But the impact of these areas of continued progress is still far from simple.

Since companies tend to spread in rich countries, in urban areas, the poor, illiterate, do not have the necessary networks or live far from cities, and -try hard to get these things. As a result, companies tend to perpetuate the status quo, instead of spreading the benefits of marketing to those who need it most.

Similarly, when it comes to doing business in South Africa, we cannot “copy and paste” a global template and expect to see real progress. Instead, a different approach is needed, based on a rational assessment of the problems of community planning and how these lead to an unequal playing field that continues to exclude the marginalized.

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By looking beyond trying to solve specific problems, instead considering the context and the processes that support them, real social change is possible. This is the power of the system; it seeks to change the system that creates the problem in the first place, solving major system problems, usually by identifying and solving local challenges in the areas involved.

Systemic change allows for innovation that creates real social change, rather than reproducing and preserving existing conditions. To hack the system, an interdisciplinary perspective is required; We need to draw on the expertise of people across different disciplines and disciplines, expose ourselves to different perspectives, and engage and connect those who influence change in the problem-solving process, rather than seeing them only as . experimental land.

For example, in the recent Business Grow Africa conference – an initiative of the Western Cape Economic Development Partnership led by the growth of small businesses and support for business and energy projects in the region – a group of experts from different focal areas and small business environment met. gather ideas and identify innovative and practical ways to address gaps in the support small businesses receive.

Entrepreneurs have discussions with representatives of local governments, technology companies, educational institutions, funding agencies and civil society in an effort to understand the real problem and agree on new ideas to help create jobs in ‘to create high-quality companies and support existing businesses and communities. usually does not pay.

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Many promising pilot ideas emerged from the conference. For example, the development of a start-up fund specifically aimed at women and youth entrepreneurs. According to the report Venture Capital 2020 on the Gender Financing Gap, women have been systematically excluded from entrepreneurship, with women-led startups in emerging markets raising only $1 in seed funding for every $9 a man raises.

The unemployment figures also show that almost half of working women in South Africa are not working, compared to 35% of working men. Therefore, money of this nature can open up the opportunity to those who are short-term represented in business opportunities.

Another pilot idea focused on increasing the support given to the “missing in the middle” – this term describes companies that are too “large” (mid-sized) for the first financing plan and not always growing to be attractive to large investors.

In South Africa, most of the funding is focused on start-ups or very large businesses, which means that small businesses cannot get the capital they need to grow. Taking into account that the national development plan assumes that by 2030, nine out of 10 new jobs will come from small, medium and small enterprises, supporting the growth of medium-sized enterprises Zero is very important for creating jobs in the country.

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A systems lens helps us see that progress requires a critical rethinking of many assumptions about what we value, how we invest, the rules set by governments and markets, and the people and interests we put first. .

None of this is easy. It is a negative process, which is not based on the understanding of the situation, develops a plan for creating a business model, learns from the research of the public, and attracts the necessary support and resources. which can help turn the prototype into a project. drive social change.

And it is only by having the courage to put ourselves into the “remediation” of a complex landscape like the new settlement of the Western Cape that we have the opportunity to reflect on the processes that caused problems such as full of poverty and unemployment. We need to start thinking and acting differently if we want to empower our entrepreneurs to create the quantity and quality of work and social progress we desire to deliver our vision of participatory progress in this country.

Dr Phumlani Nkontwana is an expert in economics and business development. He is a sponsor of the University of Cape Town’s GSB’s Bertha Center for Social Innovation and Entrepreneurship Systems Change and Social Impact short course.

The views expressed are those of the author and do not necessarily reflect official policy or the position of the Mail & Guardian.


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