The 2019 Step Up 2 A Start Up and Smartbucks National Youth Awards were hosted on Wednesday at the Silverstar Casino in Muldersdrift, where the winners of the competition were announced.
Jacko Maree, Special Envoy on Investment to the President, said at the Awards celebration: “There’s a striking lack of confidence in the South African economy, and we’re not seeing people establishing start-up businesses in the volume we need to get this economy growing again. What happens when confidence doesn’t exist is that businessmen naturally start ‘protecting’ their business through cost cutting – primarily by reducing their headcount.
“As a country, it’s challenging to try solve too many variables – growth, unemployment, poverty – all at one time. Furthermore, without solving growth the other variables become impossible. Growth isn’t one of the variables – it’s actually a precondition to the others. How we kick-start growth starts talking to entrepreneurship. A traditional Keynesian economic model is for government to spend more to create growth, through its state-owned companies, but in South Africa’s case these are mostly bankrupt or are in major financial difficulties.
“Consequently, there is only one realistic lever to stimulate the economy and that is private sector investment in capacity and machinery. The President understands this clearly. I can see some green shoots, and I am positive that we will see improvement over the coming year or two. One reason for slow growth is the lack of improvement in our education system which sees youth coming out of schools ill-equipped to tackle a world where technology is advancing so rapidly. They lack skills in communication, mathematics and reasoning. It is hard for them to get ahead career wise, especially when our businesses are competing globally against countries where their youth come out of school well equipped with the skills of the Fourth Industrial Revolution,” said Maree.
“Hence, it is pleasing to see financial literacy getting more attention in a programme such as this, as well as in some schools. It is a critical skill to understand that you have to save – either as an individual or a country. There are also too many youth wanting to go to university and study degrees that are not applicable in the workplace. We need more youth to opt for trades or vocational training and need to look more closely at the German model of apprenticeships to boost our manufacturing sector.
“The way out of despair is not about finding a job – but becoming an entrepreneur, who have specific attributes. Many of them have not been to university, which is not a prerequisite to success as an entrepreneur. Among the ones that I have met, they often come from humble backgrounds and have had to pull themselves up by the bootstraps. It is a mindset: I know one who started as a cleaner and built that business into the biggest commercial cleaning business in South Africa and took the model abroad. The common characteristics are being incredibly determined and focused to the point of being single minded, even obsessive; who won’t take ‘No’ for an answer. It’s about finding a gap in the market or a problem that needs to be solved and developing a business plan around that. They tend to sacrifice money or material status for the business they own. In their early days they didn’t drive smart cars but ploughed money back into the business,” explains Maree.
“They start by experimenting in a small way, they test and learn. They quickly develop a team around them: they learn that it is much easier to be successful through working as a team than alone. They have common sense and financial literacy – even if they have no formal training in it, they instinctively understand cash flow. They also never relied on handouts or government. They typically have good mentors, sounding boards who can give them wisdom,” concludes Maree.