Entrepreneurship still seen as last resort as graduate unemployment deepens

ENTREPRENEURSHIP remains a last resort for many South African graduates, even as youth unemployment stays at crisis levels and the formal job market continues to shrink, according to Martin Manmohan of the bhive Enterprise Development Centre at North-West University (NWU).

Manmohan says a lack of funding, weak support networks, limited practical training and persistent cultural attitudes are discouraging young people from starting businesses at a time when the economy urgently needs new ventures.

“At a time when the country urgently needs new ventures, the very people best positioned to build them are hesitant to take the leap,” he said.

Youth unemployment remains among the highest in the world, with thousands of graduates entering an economy each year that is unable to absorb them. Despite repeated calls for entrepreneurship to drive job creation, most graduates continue to prioritise scarce formal employment over starting their own enterprises.

“The socio-economic barriers are real,” Manmohan said. “Many young graduates lack personal savings or collateral to secure loans. Venture capital and angel investment ecosystems are still developing and often favour experienced entrepreneurs rather than start-ups. With limited job opportunities, graduates tend to prioritise stable employment over risky entrepreneurial ventures.”

He added that bureaucratic and regulatory hurdles further discourage young founders before businesses even reach the market.

But financial constraints are only part of the challenge.

“Graduates may not have access to mentors, industry contacts or professional networks. This isolation hinders idea validation, partnerships and market access,” Manmohan said.

To address this, NWU convenes networking sessions linking students with industry, government agencies and organisations such as the SAB Foundation, Black Umbrellas and the National Youth Development Agency.

Manmohan said universities must also take responsibility for preparing students for entrepreneurship.

“While we teach theory well, many institutions still lack practical entrepreneurship training, such as financial literacy, business planning and digital marketing,” he said. “We also need to develop soft skills like negotiation, leadership and resilience.”

He proposed the creation of enterprise development funds at universities to support student ventures with both capital and technical support.

“Alongside funding, we must provide non-financial services such as business plans, financial projections and mentoring. Final-year and master’s students in accounting and business can contribute directly to these efforts,” he said.

Cultural expectations, he added, continue to steer graduates away from entrepreneurship, particularly in lower-income households where financial security is prioritised.

“Most of our students lack confidence, or in some cases are overconfident. Both need careful guidance,” Manmohan said. “Fear of the unknown also holds many back, because they have little exposure to entrepreneurship.”

NWU offers experiential modules, bootcamps and mentorship programmes aimed at building resilience and leadership, but uptake remains low.

“Entrepreneurship is not yet seen as a core activity by students,” he said.

Manmohan said partnerships between universities, business and government were critical to shifting this mindset and creating viable start-ups.

“Real-world exposure, access to infrastructure, industry mentorship, seed funding and market validation are what make the difference,” he said. “Universities cannot nurture entrepreneurs in a vacuum.”

He said reframing entrepreneurship as a first-choice career was essential if South Africa was to reduce youth unemployment, diversify its economy and stimulate growth.

“If we do this, we will not only create businesses, but build a more resilient economy,” Manmohan said.