Lessons learned implementing our Youth Enterprise Development Programme
Youth unemployment in South Africa is one of the highest in the world. Approximately 42% of all young people under the age of 30 are unemployed. Already representing 41,2% of the total population, this age group has been growing at an average of 1.27% since 2005 while the total population has been growing at a slower rate of 1.12%. Given this, youth unemployment will continue to grow. Youth unemployment is driven by a number of factors, such as:
The increase in the youth population is not matched by an increase in job opportunities
The schooling system is not necessarily equipping school leavers with the skills required to effectively enter the job market
Employers are unwilling to employ unskilled and inexperienced young school leavers, while not providing them an opportunity to gain much needed workplace experience
Many projects have been initiated in order to reduce the high levels of youth unemployment, yet the unemployment statistics show no signs of improvement. Among these initiatives are many related to improving the entrepreneurial skills of young people and in supporting the start-up of small businesses as alternatives to formal employment. The limited success of these initiatives is evidenced by the fact that South Africa’s total early stage entrepreneurial activity remains low at 5,9% compared to 14,8% in other low to middle income countries. The entrepreneurial rate refers to the percentage of new business started up in a year, and does not necessarily relate to the businesses being sustained past the initial first year in operation. There is clearly a need for a different approach.
Junior Achievement South Africa has launched a unique intensive incubator style entrepreneurship skills programme to address this unemployment challenge. This project not only provides practical entrepreneurial skills but also traditional workplace readiness skills, thus addressing the problem of young people lacking the skills to enter the job market, as well as providing for workplace experience in the running of their own businesses.
The objectives of the programme are to:
Equip young people with the necessary skills to establish and grow a sustainable business
Assist and support participants in actually starting up and running a small business
Raise awareness and direct participants to the resources available to attract investors and to resources available to support and advise them after completing the programme
Introduce student to micro finance institutions and assist them in accessing of finance Provide workplace and business experience to improve the employability of young people
The target audience for this programme is young adults aged 18 to 25 who are not in school and are unemployed. Participants in the programme are selected based on their commitment to the process, their propensity to engage in entrepreneurial activity, their ability to demonstrate thinking skills and their commitment to their own personal development. However the selection process takes into account those applicants who may not necessarily be risk takers, but would be candidates to be employed in the businesses to be launched during the course of the programme. This provides additional opportunities for job creation, outside of the usual entrepreneurial skills programmes offered.
The programme takes the form of a business incubator, during which students actually start up and run a real business, with the intention that the businesses are sustained after the completion of the formal programme component. In addition, students are introduced to micro finance opportunities, social innovation, case studies and relevant guest speakers, and are exposed to other young and successful entrepreneurs. As research has shown that entrepreneurs who team up in small teams are more likely to sustain their businesses in the long run, students will be required for form business teams of 4 or 5 individuals. The business teams are taken through the steps of designing a market research questionnaire, implementing the questionnaire and analysing the results. Upon completion of the market research a product or service is chosen and plans are made for the production of the product or delivery of the service. The progress of the business is carefully tracked using financial forms that are easy to understand but yet keep close check on the money coming in and going out of the business.
The programme consists of 20 four hour sessions conducted over a three to four month period. In the beginning of the programme, sessions are held twice a week in order to maintain momentum and interest. When the students reach the point of beginning the production of product or the delivery of a service, the sessions are held once a week to allow for the business to progress.
In addition to the knowledge the students gain about finance controls and tracking, they are also guided through the process of writing a business plan. This is completed towards the end of the programme to incorporate the practical experience gained through the running of their business.
Our Progress Thus Far
The partner identified for the launch of the first programme was the Desmond Tutu HIV Foundation’s Youth Centre in Fish Hoek. The Youth Centre is a relatively new project, with a focus on HIV education and reproductive health. The Centre works in the main with school going learners, and has not yet moved into the out of school youth market. Despite that fact, it was agreed in meetings with the Centre that we would move forward and they would assist in recruiting students in the target age group.
Marketing to potential students was completed by the Youth Centre over a period of approximately four weeks and included the following target groups:
Out of school, unemployed youth in the area surrounding the Centre, to allow for ease of access to the programme by students
School learners who may have unemployed sisters or brothers
Community centres, church groups, and other public amenities such as libraries
General marketing through flyers placed in high traffic places such as supermarkets and the like
Despite every effort on the part of the team, only 7 young people arrived at the marketing presentation and only three students applied to participate in the programme.
Given the above challenges and the lack of sufficient student numbers for programme implementation, a second partner was identified. This partner, The Business Place in Phillipi, Cape Town, indicated their interest and excitement in offering such a programme to the youth with which they work. The Business Place provides advice and support to aspirant entrepreneurs, and although a number of business workshops are offered, a programme of the scale of the JASA programme is not offered.
To date, this programme has progressed well, with 25 students participating. The groups have recently completed their market research and will be launching their businesses within the next few weeks.
Given the experience with the Desmond Tutu HIV Foundation Youth Centre, it is clear that the selection of an organisation with which to partner is critical in ensuring the success of the student recruitment process. It is key that the partnering organisation should at least be actively engaged with students of the target age group.
It has also become clear that not only should the partnering organisation be working with the desired age group but that the organisation should be one focussed on engaging and supporting young people wishing to start up a business. This ensures that the students recruited onto the programme have already displayed an interest and enthusiasm for a career in business.
It was planned that a total of 35 students would be recruited onto the programme, with a view to them all fully completing the programme. It has been found that such a large number is not optimum. A smaller group, allowing for a more intensive interaction with the individuals and teams, is proving far more effective in ensuring the success of the programme. This is evidenced by the initial group of 35 on the programme at The Business Place being reduced down to 25 students through student attrition.
The student application form included the requirement of a full 200 word motivation for selection onto the programme. Given in many instances the lack of English literacy and in some cases, a low level of literacy in general, a number of student did not return the application forms being either unable to complete this motivation or being intimidated to do so.
It is critical that the facilitator contracted to facilitate the programme should have extensive business knowledge. In addition, the facilitator should be a self-starter themselves and be able to motivate and inspire the students through challenging times. The best facilitators we have recruited at this stage are those from The Business Place, who have been engaged in advising and assisting young entrepreneurs over the past 7 years.
Given the lessons learnt as outlined above, the following actions have been taken to ensure the success of future programmes:
Partners will be selected based on their core business, which must be related to assisting young people in business activities
Students will be recruited from the young people with whom the partner organisation is already engaging in the start-up of small businesses
The student application form has been modified with more questions being asked as opposed to a full 200 word motivation essay. The questions have been carefully selected to ensure that the same required information on the students is gathered while allowing for an easier process for the students
Facilitators with business experience or who have worked in a business advisory capacity will be recruited for future programmes