South Africa’s Unemployment Is Rising. Are We Funding Enough Entrepreneurs Who Create Jobs?

South Africa’s unemployment rate has risen to 33.6%.

Among young people aged 15 to 24, it has reached 62.8%.

In the second quarter of 2026, the number of unemployed people increased by approximately 345 000 to 8.5 million, while employment declined by 16 000 to 16.7 million. The labour force itself grew by 329 000 people.

More people entered the labour market looking for work.

Fewer people were employed.

That distinction matters.

Because South Africa's unemployment crisis is not simply a question of people looking for jobs. It is a question of whether the economy is creating productive capacity quickly enough to absorb a growing labour force.

And this brings us to a question that deserves considerably more attention:

Are we funding enough entrepreneurs who create jobs?

Not entrepreneurs who simply create income for themselves.

Not businesses that remain permanently dependent on their founders.

Not another proliferation of micro-enterprises that are never given the capital, market access or infrastructure required to grow.

But entrepreneurs building companies capable of employing other people.

That is a very different proposition.

South Africa does not have an entrepreneurship shortage. It has a scale problem.

Entrepreneurship is already deeply embedded in the South African economy.

The country's SMME sector is estimated to comprise approximately 2.67 million businesses, with the sector collectively supporting around 11.4 million jobs. Small and medium-sized businesses account for approximately 91% of formal businesses and around 60% of employment, while contributing roughly 34% of GDP.

These numbers make one thing clear:

Small businesses are not peripheral to the South African economy.

They are the economy.

Yet the same data points to a more complicated reality.

A large proportion of South Africa's businesses are extremely small, and many operate informally. Research into the state of small business has found that, within small formal businesses, much of the employment growth over the past decade has come from own-account work rather than waged employment.

This distinction is critical.

An entrepreneur creating a job for themselves is economically important.

An entrepreneur creating ten jobs is economically transformative.

An entrepreneur building a company capable of creating hundreds of jobs is operating at an entirely different level of economic significance.

Our funding model needs to recognise that difference.

We should stop measuring entrepreneurship by how many businesses we start

South Africa has spent years promoting entrepreneurship as an alternative to unemployment.

There is logic to that.

If the formal labour market cannot absorb everyone entering it, encouraging people to create their own economic opportunities makes sense.

But there is a fundamental limitation to this approach.

Self-employment cannot, by itself, solve mass unemployment.

If every unemployed person simply becomes a one-person business, we have not created an economy capable of absorbing millions of workers.

We have redistributed unemployment into entrepreneurship.

The real opportunity is in creating businesses that progress beyond the founder.

That means businesses with employees.

Businesses with recurring revenue.

Businesses with systems.

Businesses with technology.

Businesses with access to markets.

Businesses with the capacity to absorb additional capital and translate that capital into growth.

This is where the conversation around entrepreneurial funding needs to become more sophisticated.

Capital should be designed around job creation

Funding is often treated as an input into starting a business.

It should also be treated as an instrument for creating productive capacity.

Consider what additional capital can enable a growing company to do.

It can hire a sales team.

It can employ developers.

It can invest in machinery.

It can build technology.

It can purchase inventory.

It can enter another province.

It can expand into another country.

It can professionalise its financial systems.

It can invest in marketing and customer acquisition.

It can build intellectual property.

It can move the founder out of every operational function and begin creating an organisation rather than simply sustaining a livelihood.

That is the point at which entrepreneurship begins to produce a multiplier effect.

The founder is no longer the only economic unit.

The company becomes one.

And yet, access to capital remains one of the constraints on SME growth

This is not a new problem.

The IFC and World Bank have previously identified access to finance and markets as major barriers to the growth of South Africa's small-business sector. Their research found that small enterprises employ between 50% and 60% of the country's workforce and contribute around 34% of GDP, while also identifying substantial unrealised potential in the sector.

The financing problem is not uniquely South African either.

Globally, MSMEs face a multi-trillion-dollar financing gap, which is why development finance institutions continue to treat SME finance as a central economic-development issue.

But South Africa's labour-market conditions make this gap particularly consequential.

When unemployment is already above 30%, the question is no longer simply whether a business can access finance.

The question is:

What economic capacity are we preventing from being built when viable businesses cannot access finance?

We need to distinguish between funding entrepreneurship and funding growth

This distinction may be one of the most important in the debate.

A grant that allows someone to purchase equipment and begin trading can be useful.

A loan that allows an established business to employ five people can be more consequential.

Growth capital that allows that same business to expand nationally can be more consequential again.

The funding ecosystem therefore needs a continuum.

Start. Survive. Formalise. Grow. Employ. Scale. Export.

Too often, entrepreneurial support concentrates heavily on the first two stages.

South Africa needs considerably more capital and institutional support for the stages where businesses begin creating substantial employment.

The objective should not be to create the largest possible number of entrepreneurs.

It should be to create the largest possible number of economically productive enterprises.

This is particularly important for young South Africans

The youth unemployment numbers make the argument more urgent.

In the second quarter of 2026, unemployment among people aged 15 to 24 reached 62.8%, while unemployment among those aged 25 to 34 reached 41.8%.

These are not simply numbers describing the current labour market.

They describe the future composition of South Africa's economy.

Young people who cannot enter the labour market struggle to accumulate experience, income, skills, networks and capital.

The consequences compound over time.

This is why job-creating entrepreneurship matters.

A growing business does not only employ someone.

It can give that person experience.

It can develop skills.

It can create a professional network.

It can create another entrepreneur.

It can create another supplier.

It can create another customer.

The value of a job is therefore larger than the salary attached to it.

It is an entry point into economic participation.

But funding alone is not enough

This is where simplistic conversations about entrepreneurship also fall short.

Giving a business capital without giving it access to markets, infrastructure, technology, skills and institutional support does not necessarily produce sustainable growth.

The IMF's 2026 assessment of South Africa's business environment makes a similar point: growth remains too weak to meaningfully reduce unemployment, while regulatory burdens and constraints on small businesses limit their ability to expand and create employment.

Capital cannot compensate indefinitely for an economy that makes growth unnecessarily difficult.

We therefore need an ecosystem in which capital and capability move together.

Funding.

Procurement.

Technology.

Infrastructure.

Skills.

Market access.

Business development.

And customers.

Because ultimately, a business cannot employ people with funding alone. It needs revenue.

Which is why procurement matters as much as investment

There is an uncomfortable contradiction in the way we talk about supporting entrepreneurs.

We tell entrepreneurs to build businesses.

Then we tell them to find customers.

But many of the largest pools of purchasing power sit within corporates and institutions that already have established supplier relationships.

If we want entrepreneurs to create employment, we need to create pathways for them to access markets.

Capital gives a company the ability to grow.

Revenue gives it the ability to sustain that growth.

The two cannot be separated.

A contract can be as transformative as an investment.

A corporate procurement decision can create the revenue required to hire.

A partnership can provide market access that allows a company to expand.

The entrepreneurial ecosystem therefore needs to move beyond the question of “Who will fund this business?”

We should also be asking:

“Who will buy from it?”

The next generation of job creation will not come from one sector

South Africa's future employment base will need to be increasingly diverse.

Technology.

Professional services.

Manufacturing.

Creative industries.

Digital businesses.

Financial technology.

Artificial intelligence.

Energy.

Logistics.

Healthcare.

Agriculture.

Tourism.

And the businesses that emerge around these sectors.

This is particularly relevant as technology changes the economics of building companies.

A small business today can access tools that previously required an entire department.

Digital distribution can allow a South African company to reach customers outside its immediate geography.

Artificial intelligence can automate functions that would previously have required significant human and financial resources.

Technology does not eliminate the need for employment.

It changes the productivity threshold at which businesses can become viable.

That creates an opportunity for South African entrepreneurs to build companies that can compete at greater scale.

But only if we invest in them.

This is where BAAB Media Group sees its own opportunity

Our evolution at BAAB Media Group is informed by this broader economic shift.

We are building across three interconnected areas of the economy:

BAAB FM operates as our experiential marketing agency, working at the intersection of brands, audiences and culture.

BAAB Media operates across digital marketing and digital growth, helping businesses build the digital capabilities required to acquire customers and compete in an increasingly digital economy.

BAAB OS is our technology and AI division, focused on the opportunities created by automation, artificial intelligence and intelligent business infrastructure.

These are not three unrelated offerings.

They reflect our view that the next generation of businesses will increasingly operate across physical experience, digital infrastructure and intelligent technology.

And we intend to build within that intersection.

The question for South Africa is bigger than unemployment

At 33.6%, unemployment is an economic emergency.

At 62.8% among 15-to-24-year-olds, it becomes a generational one.

But the answer cannot simply be to count how many businesses we have created.

We need to ask how many businesses we are helping to grow.

How many are moving from one employee to five?

From five to 20?

From a local customer base to a national one?

From a founder-led operation to an institution?

From consuming technology to building it?

From creating income for one person to creating opportunity for many?

That is the entrepreneurial transition South Africa needs.

Perhaps the question is not whether we are funding entrepreneurs.

Perhaps we are simply not funding enough of the right stage of entrepreneurship.

The stage where businesses begin to hire.

The stage where working capital becomes growth capital.

The stage where technology becomes infrastructure.

The stage where a founder's ambition becomes an organisation's capacity.

The stage where a business stops being a livelihood and becomes an employer.

South Africa does not need entrepreneurship to be romanticised.

It needs it to be capitalised.

It needs entrepreneurs to be taken seriously as economic infrastructure.

And it needs investors, corporates, government and financial institutions to understand that the return on funding a growing South African business is not limited to the financial return received by the investor.

There is also the return created through employment.

Through skills.

Through tax.

Through procurement.

Through innovation.

Through intellectual property.

Through the businesses that emerge around it.

That is the multiplier effect we should be pursuing.

Because if unemployment is rising while millions of people are entering the labour market, then the question cannot simply be:

“Where are the jobs?”

It must also be:

“Where is the capital that will allow the next generation of job-creating companies to build them?”

That is a question worth asking now.

And it is a question worth funding.