With youth unemployment rising to 46,1% in the first quarter of 2025 – a 9,2 percentage increase over the past decade – South Africa faces a critical challenge. Traditional employment avenues are failing to absorb the country’s young jobseekers. While policy solutions remain important, small and medium-sized enterprises (SMEs) are playing an increasingly vital role in bridging the gap.
SMEs, often described as the lifeblood of the economy, account for over 60% of employment in South Africa’s private sector. But beyond their economic footprint, these businesses are stepping up to shape the next generation of South African entrepreneurs – creating jobs, transferring skills, offering mentorship, and enabling access to funding and markets.
This is according to Lawrance Ramotala, Area Manager at Business Partners Limited, who believes the contribution of small businesses to youth development is not only practical but deeply transformational. “In many cases, SMEs are the first to take a chance on young people, whether by hiring them as first-time employees, helping them launch their first business, or partnering with them as suppliers. What we’re seeing is a groundswell of youth entrepreneurship that’s rooted in community enterprise,” says Ramotala.
This is particularly evident in township settings, where formal employment is often out of reach. In these areas, youth-led micro and small businesses are not only becoming viable alternatives to traditional work but also creating employment for others in their communities. The ripple effect is significant: one young entrepreneur launching a business can result in multiple new jobs, greater local economic activity, and inspiration for others to follow suit.
Ramotala adds that the dynamic is about more than making ends meet. “For many young people, entrepreneurship offers something they struggle to find in the formal economy: purpose. We’re seeing a clear shift toward businesses that are mission-driven – whether it’s tackling environmental issues, promoting mental health, or improving access to education and services in underserved areas. SMEs are giving young people a platform to pursue work that is both meaningful and sustainable.”
This interplay between purpose and profit is redefining the traditional notion of work, especially for a generation that values autonomy and impact as much as income. It’s also influencing the way SMEs operate. Many small business owners are themselves under 35 and are are harnessing both their entrepreneurial ventures and personal influence to empower peers in similar stages of growth. Byusing their platforms to share resources, mentorship and visibility, they are fostering a unique ecosystem of peer-to-peer driven support that is difficult to replicate in larger corporate environments.
“We’ve supported countless young entrepreneurs who, within just a few years, have gone from first-time business owners to employers and mentors themselves. What makes the SME sector unique is that it allows young people to scale not only their ideas but also their influence,” says Ramotala. “Key to unlocking this potential are mentorship, access to finance, and targeted business support – three crucial levers for youth entrepreneurship that Business Partners Limited delivers through our Technical Assistance Programme and diverse range of business finance solutions.”
“It’s not enough to encourage youth to start businesses. They need support to stay the course, particularly in the early stages when failures can be discouraging and resources are limited,” Ramotala notes.
Government and private sector initiatives aimed at job creation must therefore include targeted support for youth-led SMEs. Equally important is the cultivation of an entrepreneurial mindset at school level as we are starting to see in policy discussions in the basic education sector. Exposure to business concepts, mentorship from successful entrepreneurs, and practical training can help shift perceptions around what is possible, especially in areas where employment is no longer a realistic goal.
As Youth Month shines a necessary spotlight on the challenges and opportunities facing South Africa’s young people, Ramotala believes the SME sector offers a powerful reminder of what is possible when local businesses are empowered and supported to contribute to the country’s economic development.
“If we want to build a more inclusive, sustainable economy, we must invest in our youth – not just as jobseekers but as job creators. SMEs are already leading the way, but they need an ecosystem that supports long-term growth,” says Ramotala. “By backing youth entrepreneurship, we’re not only building businesses, we’re building futures,” he concludes.
