Analysis of Challenges and Opportunities Faced by Youth Entrepreneurs During COVID-19 in South Africa

Introduction

Many countries are faced with the challenge of including young people in the economy, whether through employment or entrepreneurial activities, and the rate at which job opportunities are created is typically less than the rate of population growth (DTI, 2013). Maharaj et al (2016 indicated young entrepreneurs encounter many challenges in the day-to-day of their businesses. In addition, Mjadu (2018) indicated a few challenges faced by young entrepreneurs which are no access to funding, lack of fundamental entrepreneurial training, lack of access to business networks, and lack of education. Whereas considerable effort has recently been put in by the public and private sectors to create a more suitable environment for young entrepreneurs to establish and grow their businesses; despite this effort, young entrepreneurs are still facing challenges (Mjadu, 2018). As the focus on fostering entrepreneurship grows around the world, especially among the youth, given the possibility that entrepreneurship will help the youth participate in the economy, youth entrepreneurship recently encountered a challenge due to the Coronavirus (COVID-19) pandemic (Youth Co-Lab, 2020. Most entrepreneurs have reacted by using bootstrapping techniques, however, due to their inexperience young entrepreneurs are less familiar with these techniques (OECD, 2020). This prevents the country's economic growth and places a greater strain on the government to offer social assistance. Entrepreneurship plays a critical part in any country's economic development. Although youth entrepreneurship is often regarded as a crucial factor in poverty reduction, economic development and job creation, participation in other countries is worrisome (Diraditsile and Maphula, 2018). According to the African Information 2019 Report, the number of young people (15 to 34 years old) associated with entrepreneurial activity remains incredibly low at 6%. According to OECD (2021), supporting youth in starting their enterprises is one strategy to alleviate youth unemployment in developing countries. Furthermore, young people are interested in becoming self-employed and can do so. Entrepreneurship, like other disciplines, lacks a commonly accepted definition because many researchers and writers have understood it differently based on their perspectives. Entrepreneurship, according to Hisrich (2002), is the process of creating something valuable by devoting the necessary time and effort, taking associated financial, psychological and social risks, and earning financial and personal satisfaction and independence as a result. According to Audretsch, Belitski and Desai (2015), entrepreneurship is a determining component of economic growth, social change and structural change. More constricted definitions of entrepreneurship have defined it as the designing process, launching, and running a new business, which is frequently similar to a small business (Gaddefors et al., 2001). A conclusive definition for this chapter will be, that entrepreneurship is the establishment of a new business and the expectation of the risks related to that business in exchange for profit generated from the exploitation of the market opportunities (Gutterman, 2020). Entrepreneurship has a variety of societal benefits. Entrepreneurship is encouraged for a variety of reasons, including the ability to start one’s own business, be self-employed and employ others (Diraditsile and Maphula, 2018). Entrepreneurship, particularly youth entrepreneurship, plays a key role in raising the overall standard of living in society, not only by creating new jobs but also by developing and implementing new advanced knowledge and innovations that enhance the quality of life for employees, customers and other community stakeholders (Boateng et al., 2014).