South Africa has the third highest unemployment rate in the world for people between the ages of 15 and 24, with more than 50% of young South Africans unemployed.
According to a McKinsey report released in 2015, fewer than 10% of South African youth access higher education, of which only a fraction come from township or rural communities. Sadly, a 2015 study by the Institute of Race Relations indicated that if a young person has not found any form of employment by age 24, they are unlikely to find any permanent employment in the future.
It is with these staggering statistics in mind – and a strong desire to change them – that the RLabs Innovation and Entrepreneurship Programme was born on Friday 21 June, enabled by a R3 220 000 partnership with Nedbank.
The programme will provide support, advisory services, resources, mentorship and incubation for 50 women and youth-led entrepreneurs from peri-urban, township and other marginalised communities across Cape Town.
Marlon Parker, founder of the RLabs non-profit organisation, says that the programme will equip the entrepreneurs with the capacity building, business acumen and resources necessary for sustainable growth. “By providing five essential pillars – an enabling environment; equipping participants with the necessary skills to succeed; and providing social capital; investment and support services – the programme will equip the entrepreneurs with the building blocks to grow their businesses during the 12 month programme.”
Participants will undergo an intense incubation programme including specialised bootcamps, practical workshops, master classes, and mentorship and coaching sessions, while gaining access to much needed networks and markets, networking events, financing and professional services, and financial management know-how and SME business banking through Nedbank.
Nirmala Reddy, Nedbank Business Banking’s senior manager for enterprise development says that the role of SMME’s in developing countries is critical and that the bank is committed to growing the sector by, among other initiatives, partnering with business incubators such as RLabs.
“Strategically, Nedbank aims not only to be good with money but more importantly to do good with it as well. This mindset dictates that we remain an organisation that recognises economic upliftment, business development, job creation, community empowerment and social transformation as key drivers of South Africa’s sustainable future.
Thus, Nedbank actively seeks out and pursues opportunities to support communities, develop and grow small businesses, foster job creation opportunities and contribute to the overall development of a sustainable and robust social structure in our country. This noteworthy programme is one such opportunity and we wholeheartedly embrace our involvement in the RLabs Innovation and Entrepreneurship Programme.”
The 50 entrepreneurs who will participate in the first programme were selected according to certain criteria: businesses must be fully operational and located in the Western Cape, have less than 10 employees and an annual turnover of less than R5 million. Crucially, it is a requirement that business owners be active participants in the programme.
There is no doubt about the important role that micro, small and medium enterprises play in building and growing a country’s economy. Apart from other considerations, the sector creates vital jobs – to the extent that it’s expected to account for 90% of new jobs in South Africa by 2030, according to the National Development Plan. Yet, we are seeing fewer businesses being born now than 30 years ago. The good news is that business failure rates are in a long-term decline, with the rate at which businesses fail having fallen by 30% since 1977.
“We at Nedbank believe this is due, in part, to the superb business incubators available today. Entrepreneurs surveyed for the annual Global Entrepreneurship Monitor believe the aspects of entrepreneurship education that are vital in preparing them to succeed in their own business are basic business skills; leadership and management skills; and entrepreneurship-in-practice skills – all of which are provided by the excellent programme being launched here today,” concluded Reddy.