Paul Smith, co-founder of Civitas
Every Youth Day, South Africa returns to the same familiar line: young people must become entrepreneurs.
It is not wrong, and in a country with stubbornly high youth unemployment, entrepreneurship has to be a serious consideration to deal with the problem. But the line has become too easy and detached from the realities that young people face and the conditions they actually need to build businesses that survive.
Entrepreneurship is not a shortcut around education
Without a doubt, teaching entrepreneurship matters, but South Africa has to move beyond the idea that an entrepreneurship course or workshop is enough to turn young people into successful business owners. Exposure can help young people understand that building a business is possible, but possibility is not the same as capacity, and ambition alone cannot replace the education, experience, networks and enabling environment that entrepreneurs need if they are going to build companies that last.
That distinction matters because South Africa needs to stop romanticising the dropout founder or selling young people the idea that leaving school to ‘start something’ is a reliable development strategy. The more useful path is often slower and less glamorous, but far more realistic: finish school, build strong literacy and numeracy, study further where possible, gain work experience, understand your potential customers, learn how organisations work, and then build from a stronger base.
The country needs more builders and problem solvers, not just more people pushed into survivalist activity because the labour market has failed them. Survivalist businesses are often necessary and deserve respect, but they are not the same as growth businesses. A young person selling to survive is not in the same position as a founder building a company that can employ 50, 100 or 500 people.
South Africa’s missing middle
Globally, the World Bank says small and medium enterprises account for about 90% of businesses and more than half of employment. In South Africa, the IFC has estimated that small enterprises employ between 50% and 60% of the workforce and contribute at least 34% of GDP. Yet too few small firms grow into the medium-sized employers the country urgently needs.
Part of the problem is how early we burden growing businesses as if they are already large, mature companies. South Africa’s amended small business definitions classify micro enterprises as those with up to 10 full-time employees, small enterprises as 11 to 50, and medium enterprises as 51 to 250, with turnover thresholds differing by sector. But a company employing 60, 100 or even 250 people is not a corporate giant. It is often still a small growth business trying to professionalise, access markets, manage cash flow and hire well.
If South Africa wants more young entrepreneurs to become employers, policy has to recognise that difference. Regulation should be different for large, established firms with the capacity to absorb it, and lighter, simpler and more growth-oriented for genuinely small and scaling businesses. Compliance cannot become the thing that stops a promising company from hiring its next ten people.
The same applies to finance, procurement and networks, because strong entrepreneurial ecosystems are not built on motivation alone. As Startup Genome’s Global Startup Ecosystem Report shows, competitive ecosystems depend on the interaction between funding, talent, market reach, connectedness and knowledge, which means young founders need practical routes into markets, mentors who understand scale, early customers willing to take a chance on them, and access to the capital and networks that allow promising businesses to grow.
Show young people what building looks like
Young entrepreneurs also need better role models, not only celebrity founders, tenderpreneurs or Silicon Valley myths, but credible South African builders who solve real problems, employ people, serve customers fairly and create useful products or services. As the Stanford Social Innovation Review has argued, the language of ‘social entrepreneurship’ can obscure a basic truth: most honest, productive entrepreneurship is already social when it creates value, creates jobs and improves the services people rely on.
That is the Youth Day conversation worth having, because entrepreneurship can help grow South Africa’s future leaders only if we stop treating it as a slogan and start treating it as a system that has to be built. Young people do not need another call to hustle harder. They need schools that build capability, universities that expose them to ideas and technology. They need workplaces that give them experience and investors willing to back them. They need role models worth following, and a state that gets out of the way and gives small businesses room to grow.
