Tackling the high unemployment rate of ‘Generation Disrupted’

By 2025, roughly 75% of the global workforce will be millennials. But these professionals, born between 1980 – 1999, want more than a traditional job. They are losing confidence in the formal business sector, with its focus on hierarchies and profits over collaboration and societal purpose. As a result, millennials are creating employment opportunities for themselves, mindful of the broader environment, society and their own well-being, and harnessing the power of digital technology with the advent of the Fourth Industrial Revolution (4IR).

According to Deloitte’s Global Millennial Survey 2019, only 55% of millennials believe that businesses have a positive impact on society, down from 61% in 2018. Just 26% believe the economy will improve next year, down from 45% in 2018. Overall, Generation Disrupted, as Deloitte refers to millennials, are doubtful of the business sector and are seeking ways to disrupt traditional paradigms.

 South African millennials, who make up 27% of the country’s population, operate in a very different context to their global counterparts. A significant 34.2%, aged 25 to 34, are unemployed. It is not surprising that a mere 17% of South African millennials claim that they are satisfied with their life, compared to the global average of 29%.

Increasingly frustrated and disillusioned by the lack of jobs, many young South Africans are creating employment opportunities for themselves. This goes hand-in-hand with developing creative solutions to solve some of the country’s long-standing challenges.

For instance, local entrepreneur Neo Hutiri (31) has created an innovative new method for dispensing chronic medication. A process that typically takes an entire day is now complete in a few seconds. Instead of waiting in long queues, a patient collects their medication from a Pelebox smart locker after being sent a One Time Pin (OTP), which allows access to the locker. Hutiri has won several awards, including the 2019 Africa Prize for Engineering Innovation.

Ideas such as this, which serve the dual role of solving social problems while creating employment opportunities, need to be fostered for SMEs (Small to Medium Enterprise) to promote sustainable inclusive economic growth.

 There are over 2.4 million SMEs in South Africa. But financing is frequently listed as the number one constraint to their survival and success. And despite their critical role in developing the economy by creating jobs, SMEs in South Africa are caught in a monstrous credit gap of around $6 billion, unable to access the necessary finance. New digital technologies may offers innovative solutions to some of these challenges.

The fintech start-up, Fundrr, is disrupting the SME financing market as it seeks to fund around $70 million worth of SME businesses by 2022. Fundrr’s application process takes just eight minutes, and the applicant knows within 24 hours if they qualify for a loan, eliminating tedious bureaucracy and long waiting periods.

Fundrr has also developed an automated credit check model that holistically analyses a small business’s potential to succeed, and customises the loan repayment according to this data. 70% of loan applications received by Fundrr have been approved.

While enterprising entrepreneurs and start-ups such as Neo Hutiri and Fundrr are disrupting the business sector, a large percentage of unemployed South Africans remain skeptical of their employment prospects in the future. The Deloitte Survey found 71% of unemployed South Africans believe that Industry 4.0 will make it harder to get or change jobs in the future. This is significantly higher than the global average of 45%.

At the Digital Economy Summit held in July 2019 in Johannesburg, Izak Minnaar, representing the South African National Editors Forum (SANEF) and the Interactive Advertising Bureau of South Africa (IABSA) raised the challenge of unequal access in the digital economy. Becoming digitally empowered is a necessity for millennials to participate in the global economy. With only 50% of South Africans able to connect to the internet, the widening digital divide is preventing real transformation and progress.

An enabling environment and access to funding for SME’s is just one step in addressing the challenges of unemployment among millennials. Resolving connectivity issues is imperative in driving inclusive growth and tackling the high unemployment rate in the era of 4IR.

Within this context, Johannesburg Business School is committed to being a driving force for meaningful economic change in South Africa. The MBA, launching in 2020, is geared for business owners and entrepreneurs to not only successfully navigate the challenges of the current business environment, but also create social and economic impact. Our programme is uniquely designed to equip participants with the tools and skills required to become versatile and dynamic change agents within the African economic landscape, with a clear view of the future.

For more information on the JBS MBA, which starts in January 2020, as well as to book to attend one of the MBA Information sessions, please click here. 

Liezl Rees is the Head of the Centre for African Business (CAB) at the Johannesburg Business School, University of Johannesburg. Nikitta Hahn is a researcher for the CAB.