Are SMMEs creating employment opportunities for the youth in townships? lessons from Hillcrest Township in the Eastern Cape, South Africa.

Abstract

Youth unemployment is one of the biggest challenges affecting townships and rural areas globally. In townships, youth unemployment results in a plethora of socioeconomic issues that delay development. This is because of factors such as the stagnant economic growth and the brain drain from the townships. As a response to youth unemployment, developing countries have advocated for the establishment and growth of Small, Medium and Micro Enterprises (SMMEs). A sustainable and viable option for promoting local economic growth is youth employment creation in townships. The study this paper reports on aims to probe the role of SMMEs in youth employment. For this, fifty SMMEs were used for the questionnaire survey and four key informants were interviewed. The data analysis and discussions reflect that SMMEs play a crucial role in youth employment in townships. Moreover, the data shows that SMMEs in townships are important for local economic development and the sustainability of local economies. The study concludes that SMMEs need to be incubated. The incubation of SMMEs entails the provision of business support in the form of office space, capital, mentorship, equipment, entrepreneurial education, and other support means SMMEs need for sustainability. This is done to ensure that they are sustainable and provide employment opportunities to the youth in the townships. The study suggests that the private and public sectors should invest more in SMMEs to promote youth employment in townships. The investment in SMMEs include provision of office space, access to capital, mentoring, stakeholder engagement, office spaces, operational costs, and education on how to run businesses.