THE BLOG
09/05/2015 10:05 am ET Updated Sep 04, 2016

How the Crowd Can Help Make Entrepreneurs Out of South Africa's Unemployed Youth

This is the last in a series of political risk and prediction blog posts linked to Dr Aziz's upcoming political comic book, The Global Kid (note: 100% of sales will go to global education non-profits that help youth reach their potential).

Youth unemployment in South Africa has been over 50% in recent years (the third highest rate in the world after Greece and Spain), obviously creating significant frustration among young men and women aged 15-24. To make matters worse, the fear of recession is growing, with Q2 GDP growth contracting by 1.3% in Africa's most advanced economy.

The good news is the government has actively been trying to create jobs for its younger citizens. Strategies include employment subsidies so companies will be incentivised to hire young people; skills and training programs to help youth enter the job market; and a jobs fund that, among other things, provides public funding to support young job seekers. Meanwhile, outside entities like the Mckinsey Global Institute have been advocating how with appropriate investment the country could create 3.4 million jobs by 2030; similarly the World Bank argues that if policymakers take advantage of its growing working age population, per capita income of South African citizens could double in 15 years.

All of this is positive. These are sensible policy prescriptions and initiatives that in theory should help South Africa's deeply entrenched youth unemployment crisis, especially in the long-term. And yet it simply isn't enough in the short-term. We see that youth are suffering - keep in mind that since 1994 the working age population has increased by 11 million, making up 65% of the country. Yet many youth, whether qualified or with limited education, have been sitting idle for years, either hoping for jobs or have simply "given up looking".

How can we help South Africa's unemployed youth in the near-term? One strategy is to leverage the crowd to create more immediate entrepreneurship opportunities for youth. In fact, the South African government sees the value of entrepreneurship, even creating the Ministry of Small Business Development in 2014. And there are some success stories of youth entrepreneurs - check out the country's top 10 entrepreneurs under 30, who've created everything from a product for sanitation in impoverished areas to a non-profit that shapes young leaders, to a software company and a record-breaking rocket.

But are these super successful entrepreneurs the exception? It would seem so. According to the 2014 Global Entrepreneurship Monitor Report, South Africa has an "alarmingly low level of entrepreneurial activity." And there's still a disconnect between government's job creation initiatives and the 54% of youth who are still unemployed. In fact, a quarter of budding entrepreneurs say their "fear of failure" has stopped them from setting up a business. Leveraging the crowd could reduce this gap between policymakers and frustrated unemployed youth who perhaps don't feel existing policies can help them - or are simply to afraid to try.

First, we could simply ask unemployed youth what they want. Aggressively show them someone cares about them and wants to see them succeed. Crowdsourcing their answers to this question could be a quick way to help government and other private entities to determine what areas of entrepreneurship would be the best fit for these youth in the near-term. Internet penetration is over 45%, which means it wouldn't be a struggle to get responses and would help government officials to determine if these youth need to be trained in specific skills for their business.

Second, we could then crowdfund for one specific entrepreneurial initiative, asking the global citizenry to offer small amounts to help youth start their businesses in one specific sector. We could even identify a specific town in South Africa, linking up with a local non-profit (e.g. IkamvaYouth) or government body (e.g. the Jobs Fund) that can administer these crowdfunds. Let's consider this a small-scale, local project funded by a global crowd - if it works well, it could be replicated in other South African towns with high youth unemployment and so help government with more near-term relief for its younger citizens. (Worth noting that South Africa isn't alien to crowdfunding - look up Thundafund and their recent crowdfunding program for those in "less affluent and historically less networked sectors".)

If there isn't any effort to relieve the suffering of unemployed youth in the near-term, what can we expect in South Africa? Instability will rise in at least two ways. First, there will of course be more protests. Remember, South Africa's protests have nearly doubled since 2010, with 2014 being an all-time high in unrest. Admittedly these protests are usually linked to state failure to provide services like water, sanitation or housing; but it isn't inconceivable that frustrated youth will engage in demonstrations specifically on their plight too. Second, certain non-state actors, including ISIS, will take advantage of the frustration of these unemployed youth - increasing reports suggest some youth have already been recruited online by the terrorist group to fight in Syria and Iraq. Leveraging the crowd - both locally and globally - to make entrepreneurs out of unemployed youth could be one way to reduce instability in the near-term in South Africa.

Dr Aziz recently completed a research certification in leveraging crowds in the public sector at NYU's GovLab and also spoke on crowdsourcing in policymaking at the 2015 Open and User Innovation Society Meeting in Lisbon, Portugal.