The Youth Enterprise Development Strategy (YEDS)

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The Youth Enterprise Development Strategy (YEDS) 2013-2023 is a key policy initiative launched by the South African government to foster youth entrepreneurship and economic participation.
What are the main aims and objectives?

The YEDS aims to foster youth economic participation and address high youth unemployment in South Africa. Its main objectives are to enhance youth entrepreneurship, accelerate the growth of youth-owned and managed enterprises, and increase youth self-employment and innovation. The strategy intends to provide support schemes for young entrepreneurs with the goal of creating and managing sustainable and efficient businesses capable of providing decent permanent jobs and contributing to economic growth. The strategy also contains several objectives for the 10-year period including: 

  • To increase the GDP contribution of youth-owned and managed enterprises from less than 5% to 15%
  • To increase the number of youth-owned enterprise startups from less than 10% to 50% of all new enterprises as measured by the Total Early-Stage Entrepreneurial Activity (TEA) index. 
  • To increase the number of self-employed youth or entrepreneurs from 6% to 20%
How does the program work?

The YEDS is targeted at individuals aged 18-35 and is built around several key principles: 

  1. Youth Enterprise Development and Entrepreneurship is a Shared Responsibility - It is the responsibility of all relevant tiers of government and the private sector.
  2. Participatory and Collaborative Approach - Youth enterprise development must take place with full participation and consultation of young people, especially young women, those with disabilities, and youth in rural/peri-urban areas.
  3. Human Rights and Diversity - It must promote non-discrimination, adhere to democracy and good governance, protect human rights, promote gender parity, and recognize spiritual and cultural diversity among youth.
  4. Responsiveness and Relevance - Interventions must pay special attention to disabled youth and respond to their unique challenges.
  5. Accountability - Government agencies involved must put systems in place to monitor, report and record progress.
  6. Youth as a Target Group - All core enterprise development programs must place youth as primary beneficiaries.
  7. Transparency - All relevant stakeholders in public and private sectors should operate transparently.

The YEDS also outlines several key programs to promote youth development including: 

  • Youth Entrepreneurship Competition Awards - Provides recognition to aspiring young entrepreneurs, existing youth-owned enterprises, and individual entrepreneurs through bursaries and awards.
  • Sector-Specific Youth Catalytic Projects - Aims to identify and facilitate sector-specific youth projects by leveraging opportunities in priority sectors and infrastructure development programs.
  • National Youth Service Programme - Provides structured learning opportunities and work experience to young people to promote their participation in the economy.
  • Youth Entrepreneurship Collateral Fund - Addresses the difficulty young entrepreneurs face in securing funding by providing a non-refundable grant to serve as collateral for business loans.
  • Youth Entrepreneurship Data System and Research Programme - Develops an integrated data system and conducts research to aid youth enterprise development.
  • Business Incubation for Young Entrepreneurs - Aims to establish incubation centers to support the growth and sustainability of youth-owned enterprises.
  • Business Development Support Services - Provides business infrastructure support, access to markets, and capacity building/skills development for youth enterprises.
  • Youth Entrepreneurship Promotion and Awareness Programme - Promotes entrepreneurship awareness among youth through outreach campaigns.
  • Mentorship and Coaching Programme - Aims to improve performance and survival rates of youth-owned enterprises through mentorship and coaching.
What is the overall cost?

There is currently no available information about the cost of implementing YEDS.

How was it implemented?

The Youth Enterprise Development Strategy outlines several key stakeholders and their roles and responsibilities in promoting youth entrepreneurship and enterprise development in South Africa:

The Department of Small Business Development plays a central coordinating role. Its responsibilities include implementing the strategy, coordinating with other stakeholders, monitoring and reporting on progress, encouraging mainstreaming of youth enterprise development across government, providing technical support to other levels of government, partnering with the private sector and youth organizations, and lobbying for support from various sectors. The Youth Directorate within the department leads many of these efforts.

Provincial Departments of Economic Development are tasked with supporting youth enterprises in their provinces, aligning their policies with the national strategy, mainstreaming youth enterprise development in provincial departments, establishing youth directorates, partnering with the private sector, coordinating with municipalities, participating in national coordination efforts, and integrating youth enterprise support into local development plans.

The National Youth Development Agency (NYDA) is responsible for coordinating and providing oversight on youth economic participation programs, implementing the Integrated Youth Development Strategy, initiating support programs aligned with this strategy, establishing national priority programs, promoting a uniform approach to youth development across sectors, providing financial and non-financial support to youth enterprises, and partnering with other agencies and the Department of Small Business Development on implementation.

The private sector and state-owned enterprises are encouraged to promote youth economic participation, develop supportive programs, provide procurement opportunities and enterprise development support to youth businesses, enter into public-private partnerships, partner with youth business formations, and report on their youth enterprise support efforts.

Youth business chambers and associations are expected to develop programs to empower young entrepreneurs, partner with mainstream businesses, and play an advocacy role in youth policy. Government agencies are tasked with mainstreaming youth in their programs, developing youth-focused products where needed, partnering with financial institutions, and reporting progress to the Department of Small Business Development.

What impact has been measured?

There is currently no available information about the measured impact of YEDS, however, it is worth noting that despite the implementation of YEDS, youth unemployment remains a significant issue in South Africa. As of the first quarter of 2023, youth unemployment stood at 32.9%.

Notes + Additional Context

Based on the Youth Enterprise Development Strategy document, the key context for youth entrepreneurship in South Africa includes:

  • High youth unemployment: Youth unemployment constitutes 73% of total unemployment in South Africa. The ratio of youth-to-adult unemployment is about 1:3.
  • Low levels of youth economic participation: Only about 6% of youth are involved in business or self-employed. South Africa's Total Early-Stage Entrepreneurial Activity (TEA) rate for youth is only 0.9%, which is very low.
  • Legacy of apartheid: The apartheid system deliberately kept African youth from skilled jobs and quality education, limiting their exposure to business skills and networks.
  • Lack of critical skills: Many youth lack managerial, technical and entrepreneurial skills needed to start and run businesses successfully.
  • Limited access to finance: Youth often lack assets for collateral and struggle to access startup capital. About 82% of small business owners had to self-fund their businesses.
  • High income inequality: South Africa has one of the highest income inequalities globally, with a Gini coefficient of 0.67. This impacts economic opportunities for youth.
  • Low GDP growth: Slow economic growth has limited job creation and entrepreneurial opportunities for youth.
  • Underdeveloped informal economy: Unlike other developing countries, South Africa does not have a thriving informal economy where unemployed youth can find refuge.
  • Rural-urban divide: Entrepreneurial activity is much lower in rural areas compared to urban centers.
  • Gender gap: Young women tend to have lower entrepreneurship rates compared to young men.

CURATED BY

Tom Hancock

Research Associate
Global Entrepreneurship Network
United Kingdom