South Africa is facing a critical challenge with youth unemployment rising to 46.1% in the first quarter of 2025. This is a 9.2 percentage increase over the past decade, highlighting the pressing need for innovative solutions to address this issue. While traditional employment avenues are struggling to absorb the country’s young jobseekers, small and medium-sized enterprises (SMEs) are stepping up to bridge the gap.
SMEs, often referred to as the lifeblood of the economy, play a crucial role in South Africa’s private sector, accounting for over 60% of employment. Beyond their economic impact, these businesses are shaping the next generation of South African entrepreneurs by creating jobs, transferring skills, providing mentorship, and facilitating access to funding and markets.
Lawrance Ramotala, Area Manager at Business Partners Limited, emphasizes the transformative contribution of SMEs to youth development. He highlights how these businesses are taking a chance on young people, whether by hiring them as first-time employees, assisting them in launching their own businesses, or collaborating with them as suppliers. This trend is fueling a surge in youth entrepreneurship rooted in community enterprise.
In township settings where formal employment opportunities are limited, youth-led micro and small businesses are emerging as viable alternatives, not only for the young entrepreneurs themselves but also for creating employment opportunities for others in their communities. This ripple effect leads to job creation, increased economic activity, and inspiration for others to pursue entrepreneurship.
Ramotala notes that entrepreneurship offers young people a sense of purpose that may be lacking in the formal economy. Many youth-led businesses are mission-driven, addressing environmental issues, mental health promotion, or improving access to education and services in underserved areas. SMEs provide a platform for young people to pursue meaningful and sustainable work, aligning with their values of autonomy and impact.
The interplay between purpose and profit is redefining work for the younger generation, emphasizing the importance of mentorship, access to finance, and targeted business support. Business Partners Limited offers a Technical Assistance Programme and a range of business finance solutions to support youth entrepreneurship and help young entrepreneurs navigate the challenges of starting and growing a business.
Government and private sector initiatives aimed at job creation must prioritize support for youth-led SMEs. Cultivating an entrepreneurial mindset at the school level can also help shift perceptions and empower young people to explore entrepreneurship as a viable career path. As Youth Month sheds light on the challenges and opportunities facing South Africa’s youth, Ramotala believes that investing in youth entrepreneurship is essential for building a more inclusive and sustainable economy.
By backing youth entrepreneurship, we are not only building businesses but also building futures. SMEs are at the forefront of this movement, demonstrating the potential for local businesses to contribute significantly to the country’s economic development. As we look towards a brighter future for South Africa’s youth, supporting and empowering young entrepreneurs will be crucial in creating lasting change and prosperity for generations to come.
