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Youth entrepreneurship & 4IR won't solve unemployment

August 1 · Issue #51 · View online
iAfrikan Daily Brief
Statistics South Africa has released the latest unemployment numbers for South Africa and they make for some sad reading. According to the country’s number crunchers, 29,0% of South Africans who are of working age are unemployed.
To put this into perspective, that is an increase of 1,4% from the first quarter of 2019. That’s 6,7 million South Africans of working age (15 to 64 year olds) out of a total pool of 38,4 million people of working age in South Africa. According to Stats SA’s mid-2018 population estimates, the country has a population of 57,73 million people. Now to further make you understand how serious this problem is, let’s look at the USA with an population of 327 million people. It has 6 million people unemployed out of that 300 million plus population.
This is such a common sight around where I live in Johannesburg (outside a building supplies store) that one has accepted it as normal. The sight is similar across many cities and suburbs around South Africa. Young and unemployed people looking for work.
What is also interesting is if you look back ten years, the unemployment rate in South Africa has never dropped below 20% and has been stubbornly increasing.
As you can imagine, since the statistics were released, all media and especially talk radio has been offering their opinions on why the unemployment rate increased, and interestingly, their opinions on how we can solve the unemployment problem in South Africa.
South Africa’s unemployment rate increased by 1,4 percentage points to 29,0% in Q2 of 2019. The highest unemployment rate since Q1 of 2008.
Two key themes are repeated (although there are others, but these two caught my attention) across all media as a solution to South Africa’s unemployment problem: youth entrepreneurship and everyone’s favourite new buzzword, 4IR.
Listening to, and reading everything, where youth entrepreneurship (youth in South Africa means 16 to 35 year olds) and teaching people “4IR skills” as solutions to unemployment, I couldn’t find or hear any of the people presenting this argument putting any data forward as proof or in support of their argument. So, naturally, I decided to do what one should do, I read the Stats SA unemployment presentation and the data they presented.
Labour market rates vary significantly depending on education level.
Barely a few minutes into reading the Stats SA Q2 unemployment presentation, right there in front of me, is a chart that seemed to both highlight the problem and point us to the solution. According to Stats SA data, firstly, 34,5% of those unemployed (who are actively seeking work) did not finish high school. This is followed by 29,4% of those who are unemployed who only have no other qualification except a high school qualification. To prove that education is where we should be possibly focussing to address the problem, only 9,1% of those that are unemployed are tertiary education graduates.
To me, it is quite clear, if we are to make the most impact in addressing the unemployment problem in South Africa, we should be doing everything we can to firstly ensure all children finish high school. Secondly, try as much as possible to get them post high school qualifications. By just doing these two things, based on the available data, we would have at least made them employable, which means they can be useful to the economy. Yes, of course, that does not guarantee employment but I can almost guarantee that most will be employed compared to them not having completed high school.
I intentionally mentioned the USA earlier. I find it curious that in South Africa, and Africa at large, youth entrepreneurship and “4IR skills” (supported by the creation of technology hubs) are punted as the solution to unemployment. However, look at the USA, a country with many more people but a lower unemployment rate, in fact, it could be any Western country. Is it youth entrepreneurship that is creating jobs? Is it “4IR skills” acquired through tech and innovation hubs? Or is it a well structured education system with relatively sufficient resources that is producing employable youth that is helping keep unemployment low?
I don’t know, maybe I am looking at this all wrong but something doesn’t sound right when the data is explicit that many of the unemployed did not even complete high school and you suggest that youth entrepreneurs will create jobs. Which people are they going to hire? The same underqualified ones?
I would really love to hear your views on this and even be corrected but as much as I am an advocate of digital technology and entrepreneurship as forces for progress, somehow I don’t see how they address unemployment when we have millions of people who have not completed high school.
P.S. Equally important, 4IR is not taking jobs.
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Looking Back
Growing in pre-1990 South Africa you’d be hard pressed as a young African youth to find a role model in the ICT sector that somehow looked like you. This was important, for me at the time at least, because as a young person at the time who was lucky to have access to a second hand XT computer with a lime green monochrome monitor, I needed to know that people like me had a future pursuing a career in the sector…in South Africa.
So, you can imagine my ear to ear grin one day in the 1990s after high school when I walked into a small Software Connection store at Sanlam Center in the Pretoria CBD looking to buy a Pascal compiler with my pocket money and I was greeted by two young black males who offered to assist me. Unbeknownst to me at the time, they would go on to build a behemoth of an ICT company, BCX, that would later be sold to South Africa’s Telkom for approximately $200 million.
L-R: Benjamin and Isaac Mophatlane. Source: DESTINY MAN
Coming from Ga-Rankuwa, a township north of Pretoria, and being sent to a private school in Kimberley, the Mophatlane twins were fish out of water. As Isaac would once relate to me during 2017. They were not exactly good soccer players and definitely not athletic, having not been exposed to sports like rugby, cricket and hockey early on. They did, however, play chess, and this opened several doors for them.
“One thing that was quite cool is we were both in the chess club. Our late father had invested a lot to make sure we played chess regularly, and we had a chess tutor when we were young.” said Isaac.
Their interest in computers came through Paddy O'Brien, a Catholic brother, at CBC Kimberley who encouraged them to join the computer club. The computer club’s lab ran on BBC (British Broadcasting Corporation) manufactured computers on a network with a single file server.
This regular access to a computer lab at an early age allowed the Mophatlane brothers the time and resources to hone their programming (Turbo C++ and Pascal) and computing skills more regularly than many young people at the time. Looking back, it also set the foundation of what was to be an illustrious business career in ICT across Africa.
Now, if you were a programmer or electronics enthusiast in the mid to late 1990s in Pretoria, there were two likely places where you probably bought your books, manuals, software, compilers, electronics and other supplies from - either you shopped at Communica or Software Connection at the Sanlam Sentrum. If you shopped at Software Connection especially on Saturdays, you wouldn’t be blamed if you regularly mixed up the names of the two sales people at the store.
To cut a long story short, they would go on to leverage every opportunity they to to eventually build Business Connexion, later renamed BCX. At first, Telkom made a failed bid to acquire the company in 2007. Telkom would eventually make a successful $200 million (R2,6 billion) bid to acquire BCX in 2014, with the deal being approved in 2015.
However, during that deal would also mark the saddest time in Isaac’s life. In the middle of 2014, while the deal with Telkom was being negotiated, Isaac’s twin brother and then CEO of BCX, Benjamin, passed away. Despite that, Benjamin and Isaac remain one of the pioneers of South Africa’s ICT industry.
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