Entrepreneurship is often given as a simple solution to alleviating poverty, but research shows that it doesn’t offer answers to mass youth unemployment and we must exercise caution in promoting it as a way to do so.
The UK has been named the top performer in Europe when it comes to entrepreneurs and fourth in the world, behind the US, Canada and Australia. Indeed, the top ten best performers are dominated by high-income countries. But what about poorer countries ? With the world, at only 52% of its “entrepreneurial capacity”, does starting a business offer a viable route out of poverty for the hundreds of millions of young people worldwide who find themselves out of work today ?
The youth unemployment challenge is undoubtedly one of the globe’s most pressing priorities. Unemployment is persistent and increasing and poor quality, informal and subsistence jobs are proliferating. Future forecasts for youth unemployment across all regions look bleak.
Young people constitute nearly ont third of the world's population and their prospects are crucial to their country’s ability to meet their development goals.
At first glance, entrepreneurship is an obvious solution to promote employment in tight labour markets. High levels of poverty mean that finding an income is among young people’s top priorities. It is also attractive to governments or NGOs as a quick-fix solution that lends itself to tangible and measurable interventions, whether this be the number of youth trained, loans given or small businesses started.
For many years the microfinance industry cultivated a false confidence and policy rhetoric that “one loan equals one thriving business”. And there is a similar danger in current emphases on youth entrepreneurship. The link between numbers of entrepreneurs and successful businesses is not so clear in reality.
There needs to be more focus on training up young people in the skills and qualifications needed for their specific local, national and regional markets There also needs to be an awareness of oversaturated markets and limited client bases.
We cannot fix the youth unemployment problem by turning the hundreds of millions of young people who were out of work into entrepreneurs. Long-term solutions will depend upon creating and expanding decent jobs for young people. But as the big push to entrepreneurship has gained popularity, this has shaped government priorities. My concern is that this removes responsibility from governments and private sectors in their roles for creating and expanding access to decent jobs for young people.
Unsurprising, therefore, that among the key messages from many inspirational stories is that beginning to teach entrepreneurship in schools will help young people transform their own futures, and that by giving out loans for small enterprise we can accelerate this process. Have we not learnt from the pitfalls of microfinance ?
A narrow focus like this overlooks many social and economic problems young people are facing. Many researches in developing countries and our personal experience over the past 15 years working with students, highlight that these are rooted in systemic issues such as household poverty, high levels of physical, emotional and sexual violence, negative stereotypes of young people as lazy or criminal and a lack of inspirational role models. There is also the fact that young people have been and continue to be overlooked by national policies, donors, NGOs and the development community in general. The idea of entrepreneurship as a solution to these problems often involves an over-simplification of these problems by the very people who have been slow to respond to the challenge.
Our new programme called Students Entrepreneurs AgendART to SPEED 2030 will improve economic as well as global citizenship education of beneficiaries. This is only possible because it does not just focus narrowly on youth unemployment, but is designed to meet the other social and economic vulnerabilities young women face in Benin Republic. Our focus is also on social entrepreneurship, helping young people to put people before profits through harnessing the non-financial resources that they have.
Students Entrepreneurs AgendART to SPEED 2030 shifts away from the way entrepreneurship education is narrowly addressed at present. We put more focus on youth engagement and inclusion. This means employment is but one outcome as young people create a critical mass and place themselves at the core of transforming their societies, supported by more supportive social, political and economic environments at home, in their communities, and at the national and international levels.
Angelo Fagnon is thus identified to be part of the youth to lead our global project in his country, thereby inspiring thousands of students at home and benefiting from global exposure and opportunities.