Entrepreneurship is the answer to job creation

Johan, a News24 user (read below) presents a depressing analysis of the jobs market and the prospects for matriculants attaining gainful employment.

Related:
Young, Educated and Unemployed- According to a 2008 report by the Centre for Development and Enterprise, a conservative think tank that researches the effect of poverty and unemployment on South Africa's economic growth rate, 65 percent of the four million youths between 15 and 24 that were available for a job in 2005, were unemployed.


It is an issue that most us would have pondered at some time, wondering how jobs can be created in an abnormal environment where physical assets, human resources and just the freedom of movement is under constant attack from crime, Aids, a severe recession, affirmative action, [insert ailment here] plus a dysfunctional education system producing masses of unskilled illiterates - coming off the back of a population breeding workers faster than jobs can be created.

Zuma and the ANC can pontificate every conceivable solution to the problem spread over as many five-year plans they want but the answer is relatively simple. Governments don't create jobs, entrepreneurs do. The country needs entrepreneurs and we need to encourage entrepreneurship as the virtue that it is. It is not "evil" to be a capitalist like the ANC and its Marxist cronies claim, assuming anyone who becomes wealthy off their own efforts does so at the expense of the "poor wekkas".

The truth is being an employer in South Africa is an utterly thankless task. Indeed one of the first laws enacted when the ANC assumed power was to introduce Draconian labour laws to punish the "evil capitalist employer" and protect the worker at all costs. It made employing people a huge disincentive. I don't recall how much time I wasted being hauled before the CCMA to answer for some or other inane claim only to have it dismissed when I produced the necessary evidence that procedures had been followed and "yes, the guy was caught stealing red-handed, here's the case number". The law protected the worker all right, right out of a job where he couldn't be "abused".

The attitude of the ANC and its alliance cronies is that workers are owed a job. Not so, a job is a privilege, not a right - and in order for the privilege to exist you need someone to create it. Capitalism is the best job creator and we know the same ardent anti-capitalist socialists/ unionists are the first to imbibe on the teat of capitalism when the opportunity presents itself. Isn't that right, Cyril, Tokyo, Smuts?

A country's most precious commodity is its entrepreneurs because as rare as diamonds are, this subset of society is born, not made. Most people harbour the thought of independence and the freedom of self-employment but only a small fraction (around 5%-10%) actually have the wherewithal, the innate desire, courage and vision to see it through to successful entrepreneurship. It has little to do with education. The two are not correlated although it does not hurt to have some tertiary education to enable you to take your business to another level. This might explain why many of the world's most successful entrepreneurs have little or no formal education whereas people you'd think would be automatic shoe-ins to entrepreneur superstardom such as doctors, lawyers, engineers and other otherwise highly intelligent individuals remain in the employ of others all their lives or fail at businesses of their own.

At least two bloggers here are former largish-scale entrepreneurs in South Africa. The jobs created died when we left. We are now again self-employed in our new respective countries and I would hasten to guess that of the one million plus people that gave departed South Africa, a good number of them were entrepreneurs. I know I've personally encountered more South African expats that are self-employed than are working for others in Australia which is unfortunate because it means their talents are now being used for the benefit of their adopted country. These people are re-established and integrated into their new societies and are lost forever to South Africa.

The ANC needs to understand that in order for jobs to materialise, you need to incentivise and protect the job creators, the entrepreneurs and the first steps would be removing outdated inflexible labour restrictions, affirmative action and making the country liveable enough to convince the next plane-loads of entrepreneurs to want to stay in the country. I could go on but I'll end the post by saying that we need to stop bleeding entrepreneurs and observe as jobs begin to magically appear. Like Johan below says: No Employers No Workers No Workers No Tax Revenue. It is in that order.


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Matriculants vs job creation

By Johan (News24 user)

Whilst the statistician will correct me for my estimation, I would like to paint a rather dull picture. The colouring in of this picture can only be created by those elected into authority. The development and final colouring of the picture affects all; the majority and the minority, wealthy, middle class and the poor.

I understand, there will be in excess to 500 000 matriculants leaving school at the end of 2009. We have been advised via the media that approximately 189 000 employees have lost their jobs in one quarter of this year. ONE QUARTER. Should this trend continue it will mean in excess of 750 000 employees will have lost their jobs over a period of one year.

For the sake of assumption, let us take it there are no more job losses. This will mean that the ANC needs to create about 700 000 jobs.

The ANC has set a target of creating 500 000 jobs. By when? At the end of 2010 another batch of matriculants, which have grown exponentially in numbers, will also become job seekers. And so the number of school leavers will increase and so will the number of job seekers. I would suggest that by the next elections the number of eligible voters who will have left school will have increased by about 2.5 to three million people. It therefore makes it a critical responsibility of the ANC to succeed in ensuring the future of South Africa over the next five years.

This would suggest that the government will have to hold portfolio ministers to account for successes and failures. To save on budgets and answer for overspending, in public sector offices. Find a way to create employment or be challenged with escalating crime, as people attempt to live. The voters have been promised improvement, not only as highlighted above but in other areas too. Therefore expect such to materialise.

Increasing Eskom, SABC viewing fees. Higher Municipal Rates and Taxes. Income tax hikes. Plus, Plus, Plus. Because as basic commodities increase so does VAT, levies on fuel, and so on. This does bode well for businesses and individuals.

Taking from the "rich" is not a long term solution. In fact I would like to bet that were the banks allowed to publish confidential detail, such detail would prove a majority of private entities are really battling to stay afloat. Add another bit of weight and these will sink.

It is therefore incumbent for Mr Zuma and the ANC officialdom, who accepted the governance challenge, to present their forward plan to the public. How are the ANC going to balance:

- the school leavers with employment opportunities
- the jobless against becoming criminals
- the employers from going bankrupt and becoming jobless?

NO Employer NO Business Taxes
No Business Tax NO Govt. Revenue
NO Employer NO Employee
NO Employee NO Income Tax
NO Income Tax NO Govt Revenue
NO Govt Revenue NO Control
No Control LOTS of CRIME

Do I have any positive contributions to offer? No not really. I am just another entrepreneur trying to make a living. Therefore know very little about the ways of authority and their direction.

(Dear University Graduate,
It is with regret that your application for employment is unsuccessful. You are over qualified...(as I am not at liberty say we have no vacancies.) Please advise your school leaving sibling that spending money on becoming over qualified does not guarantee you a job.)