ENTREPRENEURSHIP

CHAPTER 7

Youth Entrepreneurship - An Overview

Youth is the Future of every nation & inheritors of the earth tomorrow. This statement stands
true in every sense. When a country has a healthy youth population, you will find the country
making headway in terms of overall development and progress. A country with high aging
population and lower youth population has a lot of problems to content with that can slow its
growth.

The world today has transited into a ‘Technology Era’. Technology has enabled progress in all
fields and all societies. Technological revolution has changed the face of lives of people bringing
healthcare, information and connectivity to even the most remote areas that were hereto
isolated.

Globalisation has brought countries together and created entire world market. We are seeing a
lot of changes in the international political map of the world. Countries are beginning to show
determination to move from the old age monarchies and dictatorial regimes towards democracy.

Progress and challenges go hand in hand. One of the major challenges faced by most of the
countries in the world today is to do with Youth unemployment. The overall unemployment rate
is growing at an alarming speed. Amongst the unemployed, the unemployment of youth seems
to be alarming. The current global youth population is estimated to be at 1.5 billion of which 620
million are employable and ninety percent of this population live in developing countries.
Countries like India and China have a fast increasing youth population and the rate of
unemployment too is rising rapidly. As per ILO’s prediction approximately 660 million youth will
be seeking employment by 2015. The youth unemployment is higher measuring up to 50-60% in
Asia.

The above figures stand to reveal the fact that Global youth unemployment could boomerang to
become a global crises causing social and economical impact on all countries besides pushing
the economies and progress backward. Though every government as well as World
Organisations do frame policies and promote schemes as well as funds to promote youth
employment programs, the quantum of such effort is negligible when compared to the huge
numbers.

Governments are focussed on looking at framework and strategies to creating new jobs
and increasing employment rates. However there is an urgent need for the policy makers to
look specifically at the Youth unemployment and related issues. In some of the countries
youth entrepreneurship is being recognised as a promising alternative and is being
actively promoted by various agencies. If promoted actively, Youth entrepreneurship can
help sustain growing economies; integrate youth into the workforce besides leading to overall
development of society.

Entrepreneurship in any society is a sign of progress. The IT business in US has been the
bedrock for youth entrepreneurship and created stars and multi-millionaires in Bill Gates, Steve

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Jobs to Google’s Sergy Brin and Larry Page and many more. There are similar such stories in
other countries too. However, the need of the day is to create many more stars and make
available the opportunities for every youth to dream big and try their hands at entrepreneurship.

Youth entrepreneurship has an impact on social as well as cultural and economic

progress of the society. Building an environment that promotes creatively and provides
opportunities for entrepreneurship calls for multi pronged strategies implementation and
involvement at all levels including Government, industry, political, social as well as educational
sectors.

Working towards Youth Entrepreneurship programs can help solve as well as avoid a lot of
problems that are currently staring at the countries and pave way for a better future and
progressive societies world over.

Youth Unemployment and Causes

Youth unemployment is being recognised as one of the problems that could grow into
global proportions in the coming years causing social and economical problems for the
societies. Youth entrepreneurship is being look at as an alternative besides other methods of
creating employment opportunities. However, there is a need for global recognition and
promotion of Youth entrepreneurship on sustained long term basis for this field certainly holds a
promising future.

Revolution in technology and the resultant growth in all fields and globalisation has impacted the
World. Developing countries like India and China are growing rapidly both in terms of economic
development as well as population. Growing economies provide ample opportunities for
services and provide opportunities for entrepreneurs to set up small enterprises in different
fields. There are huge opportunities for individual enterprise in IT Services, Financial services,
Travel and Tourism, Food, Supply chain, Health care services and many more fields. While
some country’s economies are not growing and the unemployment is growing, in the developing
countries which are registering higher economic growth, there is no impetus for growth of youth
entrepreneurship.

Reasons and Causes of Youth Unemployment

& Entrepreneurship
1. Socio-Cultural Factors as Inhibitors to Entrepreneurship
In some of the countries the social and cultural outlook of the societies may not
encourage initiatives and entrepreneurship. Many societies expect the youth to obtain
education that enables them to get a job and earn salary to support the family. Economic
compulsions too can push the families to encourage youth to look for jobs and not look
at opportunities. In some cases certain caste or class of people are habituated to
practicing certain occupations and thus entrepreneurship becomes a prerogative of
certain sections of the society. Some other societies are risk averse and tend to play
safe, while many communities believe in their children pursuing defence services
opportunities or social service opportunities and so on.

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In societies where the incidence youth rebellion, revolt and violence is very high due to
economic situation as well as due to the cultural outlook, youth may be wasting their
time neither pursuing education that helps them gain employment nor trying their hands
at hands at entrepreneurship in the face of too many obstacles and hurdles in the
society.

2. Economic & Political Factors

Economies which are not growing are grappling with huge unemployment problems and
this is affecting the youth too. When the economy is down and the business is not doing
well, there will be no opportunities for small entrepreneurs to provide services to support
the economy and business.

Political will and focus to focus on youth in the country and to create a positive
environment that encourages youth to dream and work towards realising their dream is
very much necessary in any society. It is the political will that can spearhead the Youth
revolution. Absence of stability in the political situation of the country and the political
party’s outlook towards this area can make or break the youth entrepreneurship’s
growth.

3. Policy framework
Government policy and framework in the country helps identify and build the base for
youth entrepreneurship. The policies need to encourage and provide opportunities as
well as assistance and environment to give impetus to youth entrepreneurship and have
got to be implemented at national, regional and local levels. Policy directives will need to
engage the business, banking, educational and other sectors to be able to deliver
definitive steps to encouraging and aiding youth entrepreneurship. Lack of such policy
framework can hinder the growth and initiative in the youth.

4. Industry Support & Patronage

In any industry, it is largely the business sector that provides opportunities for support
services and creating new networks of business enterprises. Similar to their role in social
responsibility, Industry can create a very strong platform to help develop the youth and
give them the support and guidance as well as opportunities to the youth. In society
where the industry enterprise is not very significant or not very active, there can be no
encouragement for youth entrepreneurship.

5. Education System & Orientation

In most of the countries today the education system is geared to enabling the youth to
pass out with their qualifications based on academic knowledge and prepare for seeking
a job. There is little or no focus on building and equipping the students with leadership,
building awareness and giving them training for entrepreneurship. Of late there is a trend
to introduce specialised courses and training modules on entrepreneurship in many of
the universities. In most cases the students do not attempt to think out of the box as they
are not equipped with the necessary skills.

6. Finance & Business Support

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One other biggest hurdle faced by each and every entrepreneur is the lack of financial
backup and funding as well as guidance required to incubate new business. Most often
those who attempt to start any enterprise do so borrowing from family and friends and
dipping into their saving. After a while the business starts to suffer due to lack of funds
and they end up in a debt trap. Banking and financial assistance should be made
available easily and this can happen only with the active support and engagement by the
Government. Nowadays venture capitalists are funding new enterprises. However this is
available to very few and not to the larger sections of the society.

Different Types of Youth

Entrepreneurship
Year 2001 goes into the annals of history as the most significant year of contribution made to
YE through creation of Youth Employment Network, an initiative and partnership between
United Nations, ILO and the World Bank. YEN was the outcome of the millennium summit that
resolved to create and provide decent work opportunities for the Youth across the globe. YEN
provides the global platform to exchange ideas, plans and framework to improve work
opportunities for the youth through a network of developmental agencies, governments,
business and economic communities as well as Youth groups and NGOs.

YEN has identified Employability, Equal opportunities for young men and women,
Entrepreneurship and Employment creation as the four goal posts for furthering Youth
employment.

Understanding the subject of Youth Entrepreneurship begins with trying to identify and
define the different types of Youth Entrepreneurships. While some of the academicians
have categorised Youth Entrepreneurship into Economic, Social, Public Entrepreneurship and
Intrapreneurship the list of categories is exhaustive. With recent studies and based on the
differentiation in the behaviour and attitudes, roles, functions, industry and many more relevant
characterisations, new categorisation of Youth Entrepreneurship has been put forth by the
researchers. We shall enumerate some of the important categories as defined by the new
generation scholar Clarence Danhof.

1. Innovative Entrepreneurship
The so called mavericks that are able to think out of the box, innovative new methods,
processes and create new business opportunities out of their innovative ideas are known
as Innovative Entrepreneurs. Currently we can name dozens of Innovative
Entrepreneurs in the world. If Bill Gates and Steve Jobs made history in the recent past,
they are being fast replaced by youth entrepreneurs like Jack Dorsey - founder of twitter,
Sergey Brin, Larry Page of Google, Mark Elliot Zuckerberg who founded Face book.

2. Imitative Entrepreneurship
Most of the entrepreneurs in the developing countries and under developed countries
who bring home tried and tested technologies from the developed world and establish
them in the home country come under this category.

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3. Fabian Entrepreneurship
Youth entrepreneurs who take on the business from their previous generation and
manage to grow the business without taking any major risk of deviating into new areas
but improving efficiencies, processes and scale of operations etc are called Fabian
Entrepreneurs.

4. Drone Entrepreneurs
Drone Entrepreneurs are the first generation Entrepreneurs who manage the business
handed down to them and continue to look at running the enterprise smoothly without
taking any risks. This kind of attitude may be said to be an individual train of the
Entrepreneur that leads him to manage the inherited business in a steady mode.

Further Classifications of Youth Entrepreneurship

Entrepreneurship is an outcome of a lot of factors including values, beliefs, attitudes, innate

spirit, inborn leadership, and influence of environment, family, skills and many more. Therefore
categorization of Youth Entrepreneurs can also be classified into several types based on
various factors. Some of the classifications have been arrived at based on the type of business,
based on technology, based on geography [Rural & Urban], as per Gender, scale of operations
etc. Business entrepreneurship which is one of the significant and dominant categories can be
further sub divided into Business, Trading, Industrial, Corporate, Agriculture, Retail, Service and
Social Entrepreneurs.

Three Stage Transitional Phase in

Youth Entrepreneurship
Nurturing and Building Youth Entrepreneurship has got to be a long term developmental
program with strategic focus and policy framework at the National Government level identifying
specific areas and programs to nurture and build awareness of amongst the Youth, train and
enhance their skills required for starting business enterprise. This calls for including Youth
Entrepreneurship building as a regular curriculum at high school and University levels
throughout the country. Secondly there has to be a common YE program involving all NGOs,
Societies and Communities to create an environment and culture that is conducive to Youth
Entrepreneurship. The effort of building YE does not stop with this.

There has got to be sustained campaign in media and other forms of communication to show to
the Youth some of the successful role models that they can emulate. Besides Government has
got to set up the required framework and policies to provide assistance required for Young
Entrepreneurs to start businesses. Besides training Youth and equipping them with Business
skills, there is a need to provide guidance, mentoring as well as provide assistance in start up
financing and help them market themselves by providing them the opportunities at various trade
forums. These are but a few of the action plans that are outlined here to help kick start Youth
Entrepreneurship development strategy and programs.

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In the long run the effort in this direction has to be sustained with the same enthusiasm and
many more action plans involving various other agencies and fields have got to be built into the
programs.

To help build Entrepreneurship awareness programs as a part of Education, it helps to

understand how the Youth Entrepreneurship develops and progresses in the early years.
Chigunta has proposed a three stage transitional phase in Youth Entrepreneurship. Of
course the stages can vary depending upon local environment and cultural factors in different
countries.

1. Pre-Entrepreneurs: The onset of this stage starts at 15 years up to 19 years. This is the
stage when the youth is leaving home and starts identifying himself as an individual. His
thoughts and ideas about his future and career start forming at this stage.
Entrepreneurial attitudes are formed naturally or as a result of awareness programs and
honed from this stage onwards.
2. Budding entrepreneurs: This stage lasts from 20-25 years. During this period the youth
would have tried their hand at some kind of work or tried to start and run a small
business. Whether they manage to succeed or burn their fingers, they will have acquired
the practical knowhow and pitfalls of Entrepreneurship and the outside world.
3. Emergent entrepreneurs: Youth between the ages of 26 to 29 years fall into this
category. By this time they would have had the necessary experience, made mistakes
and realised what it takes to manage a business. They are more likely to be grounded,
realistic and ready to prepare and start their enterprise on more mature and sure footage
with good lot of preparation and wisdom.

The above classification can help us understand the growing up trends amongst the youth and
help us design policies and programs more effectively. Providing the right input at the right time
helps the Youth assimilate the necessary information in a better way and use it effectively.

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