Africa’s social enterprises are emerging as one of the continent’s most powerful engines for inclusive growth, job creation and community development.

This is according to a landmark report released by the in partnership with the , the , , the and .

The report, , provides the most comprehensive mapping of the continent’s social enterprise landscape to date.

This article first appeared in .

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According to Eugene Ho, Global CSR Director for Future Skills at SAP, the world is grappling with a complex set of interconnected global challenges that impact economies, industries and job markets. “From climate change and geopolitical tensions to technological disruptions and economic instability, these crises are reshaping the landscape of work, especially for young people. While youth unemployment remains high, employers worldwide are also struggling to fill critical roles, highlighting a significant skills gap.”

While data by the found that global youth unemployment was 13% in 2023, that figure increases significantly in Africa. An report found that, while , only 3.1 million jobs are created on the continent. The resulting unemployment leads to poorer living conditions, drives migration, and contributes to conflict.

On the flip side, the found that 44% of businesses globally report difficulties in finding talent with the right skills. Skills research conducted by SAP revealed that nearly all African organisations faced skills gaps, with access to skilled recruits cited as their top skills-related challenge.

“To tackle this challenge, we must take a comprehensive, systems-based approach, focusing on five interconnected elements: economy, education, employability, equality, and the ecosystem,” says Ho. “Together, these factors can help close the skills gap, reduce youth unemployment, and create pathways to decent work for all.”

Economy and Education

Economic growth remains a critical driver of job creation, but the quality and inclusivity of that growth matter. In many parts of the world, jobless growth has become a pressing concern, as economies expand without generating enough formal employment opportunities for young people.

In South Africa, for example, a resurgent economy has not translated into greater youth employment, with the latest data from Stats SA among South African youth aged 15 to 34.

“Moreover, the alignment between economic growth and investment in education is critical,” says Ho. “Without adequate financial support, education systems cannot provide the skills and competencies needed to prepare young people for modern job markets, leaving many young workers without the necessary tools to succeed.”

Education systems also need to evolve to meet the changing demands of the workforce. For example, stackable credentials – modular qualifications that allow learners to build expertise over time – are becoming an essential component of successful education-to-employment transitions. “Despite the need for adaptable learning pathways, many education systems remain rigid and slow to adopt these models.”

Employability and Equality

One of the most significant barriers to reducing youth unemployment is the skills mismatch – the gap between what young people learn and what employers need. The  projects that 50% of employees will need reskilling by 2025 due to rapid technological advancements. Yet, traditional education systems are often not aligned with industry needs, leaving many young workers without the skills required for high-growth sectors.

“Governments and businesses must collaborate to ensure that training programs are directly linked to market demand. Public-private partnerships, such as apprenticeship programs and industry-led training initiatives, can play a pivotal role in closing the skills gap.”

Any strategy to reduce youth unemployment must also prioritise equality, ensuring that opportunities are equally accessible to all young people, regardless of their background, gender, or location.

“Despite advances in education, women and marginalized communities continue to face barriers to entry in high-growth industries, particularly in STEM fields. According to , only 35% of STEM graduates are women, highlighting the gender gap in science, technology, engineering, and mathematics.”

Enhancing Ecosystems

According to Ho, a thriving job market requires more than just a functioning economy and well-prepared workers – it needs a cohesive ecosystem where governments, businesses, educational institutions, and civil society work together efficiently.

51·çÁ÷and UNICEF have joined forces to create innovative solutions to global skilling and workforce challenges with the aim of helping young people transition to earning. “Together, we’re generating inclusive opportunities for underserved young people worldwide, preparing them for decent work with the skills that employers need,” says Ho. “We expanded our partnership in 2022, with a three-year investment focused on impacting youth in Kenya, Nigeria, and South Africa through a new program that supports learning to earning pathways in growing digital and green economies.”

The 51·çÁ÷Educate to Employ initiative designed by 51·çÁ÷also helps equip beneficiaries with essential competencies for the digital economy. The free initiative, implemented by the local non-profit UMUZI, focuses on developing skills, knowledge, attitudes, and values to help prepare candidates for employment.

“This multi-stakeholder approach underscores the power of partnership in addressing complex social challenges,” says Ho. “By pooling expertise and resources, SAP, UNICEF’s GenU, and UMUZI are collectively ensuring that youth not only gain relevant skills but also access meaningful pathways to employment. As digital and green economies continue to reshape the future of work, partnerships that unite private, public, and civil society actors will remain crucial in ensuring that marginalised youth are not left behind.”

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“Small and medium enterprises are the future of Africa’s economic development,” says Dumisani Moyo, Head of Marketing at 51·çÁ÷Africa. “SMEs can create more jobs more quickly than their larger counterparts, can stimulate innovation, and make a significant impact on their local and regional economies. And when supported by a strong digital strategy enabled by the cloud, there is virtually no limit to SMEs’ growth and innovation potential.”

The World Bank estimates that SMEs employ more than 50% of the workforce and contributes up to 40% of GDP in emerging economies. However, SMEs typically lack the financial and human resources of their enterprise counterparts, leaving them potentially more vulnerable to changing market conditions and other disruptive events, such as the pandemic.

“Cloud and other technologies enable greater innovation, which is essential to the success and even survival of SMEs,” says Moyo. “Between 1955 and 2011, it took Fortune500 companies an average of 20 years to reach a billion-dollar valuation. Today’s digitally transformed startups can reach milestone that in a mere four years.”

He adds that since 2000, more than half of companies on the Fortune500 have gone out of business, with a lack of agility cited as a key reason.

“Companies that have developed their business models and processes with technology as an enabler typically enjoy greater efficiency, improved innovation capabilities, and can more easily adapt to new challenges or opportunities in their operating environment,” explains Moyo. “This improves their chances at building successful, sustainable business models that can support the business strategy in the long term while still delivering to revenue targets in the short term.”

Why SMEs take to the cloud

Moyo adds that, in his experience, African SMEs seek out cloud solutions to boost revenue growth, become more efficient, open up new markets, and adapt to changes in their working environment, for example, adopting cloud-based collaboration tools to enable remote working during the pandemic.

“Every SME can benefit from leveraging cloud solutions to enable their digital transformation. Companies that use the cloud effectively enjoy greater flexibility and agility, and can more readily build competitive and sustainable business models that meet changing customer demands and employee expectations.”

He cites the example of SMEs leveraging templates during their digital transformation efforts to reduce complexity and lower costs while still unlocking a broad range of benefits.

“One of the major advantages of working with a global cloud provider with experience across multiple industries is that SMEs gain access to best-practice templates that have been proven effective in similar industries or markets. This can significantly cut down the time to value for new technology deployments and help ensure companies enjoy the full range of benefits of their new tech.”

Tips for SME cloud adoption

Moyo says SMEs have several distinct advantages over larger companies when embarking on cloud adoption or digital transformation initiatives. “SMEs are by nature smaller, more nimble and can therefore move quicker and adapt more easily. However, the road to cloud adoption is not always clear, and SME leaders need to be aware of key factors that may influence the outcomes of their cloud efforts.”

Based on SAP’s experience with supporting SMEs across the globe with their cloud, technology and digital transformation needs, Moyo provides the following tips to SMEs:

1 Identify and prioritise high-value areas for cloud

“One of the most important aspects of any cloud adoption strategy is to first identify where cloud can provide the most value to the business,” advises Moyo. “If your biggest challenge is managing your hybrid workforce, then choosing cloud solutions that can track and enable better productivity can deliver the highest returns in the short term.”

According to Moyo, one of the biggest stumbling blocks to realising the value of any cloud deployment is a lack of adoption within the organisation.

“Any investment into new cloud capabilities need to be supported with a strong change management program that is driven by top leadership throughout the organisation. When employees see the value of the new capabilities and can follow the example of senior role models – especially company leadership – they are more likely to use the tools themselves. This ensures the deployment realises optimum business value and has a transformative effect on how the business operates.”

2 Empower your teams

One of the biggest disruptors to SMEs’ business models is the pandemic, which has upended many traditional notions of work and employment.

“Today, more employees work remotely some or most of the time than ever before,” says Moyo. “This has forced companies to reengineer their employee engagement and talent retention models to suit this new world of work.”

Powerful cloud tools for tracking employee sentiment, for example, can empower companies with greater insight into employee expectations and help keep the pulse of their workforce. “With so many employees working remotely, it has never been more important to use technology to support employees and help ensure the smooth running of the business.”

3 Find and develop critical skills

Africa’s youth dividend is widely published, but the continent still struggles at times to nurture and develop sufficient tech talent to power its digital economy.

Moyo advises that SMEs work with other partners in the public and private sector to improve digital skills development outcomes and help ensure they have access to the requisite talent pool. “Initiatives such as SAP’s Young Professionals Program give talented graduates a streamlined entry into working in SAP-enabled tech environments, and ensures our partners have access to the skills they need.”

He adds that Africa’s young population offers enormous potential for economic growth and innovation, but they need to be supported with suitable skills development and work opportunities. “With the correct investment into skills, African SMEs can help mobilise the largest youth population on Earth to drive and support the continent’s growth ambitions for decades to come.”

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