Policy Guide on Youth Entrepreneurship for Youth day

As we celebrate the United Nations International Youth Day today, 12 August 2015, it is important to recognize the numerous challenges that young people are presently faced with, in particular the unprecedented level of unemployment. Since the 2008 economic crisis, young people in both developed and developing countries face dramatic levels of unemployment, with a staggering figure of 73.4 million since the crisis first began. Additionally, the number of youth that are not in employment, education or in training (NEET) has increased drastically, with more than 15.8 percent in OECD countries and 19.8 percent in Latin America.

 Women, in particular, account for a higher level of those unemployed especially in regions throughout the Middle East, North Africa, Latin America and the Caribbean. Other groups of young people who are particularly affected by unemployment include those with low levels of education, young people with disabilities and those living in rural areas. In addition, developing countries are now suffering from a serious brain drain because individuals with a high-level of education are forced to leave their home country as they are unable to find employment upon graduating from university.

 The Sustainable Development Agenda, to be adopted at the Summit in September, calls for a substantial reduction of NEET by 2020 by promoting decent work for all, particularly through youth employment and women’s economic empowerment. Supporting youth entrepreneurship in both developing and developed countries is an imperative mechanism to achieve these objectives. Youth entrepreneurship allows young people to take control of their future through innovation while also creating increased earnings, job opportunities for others in the community and economic growth within the country. UNCTAD, in collaboration with the Commonwealth, has developed the Policy Guide on Youth Entrepreneurship to support policy makers in developing countries and transition economies to establish policies and institutions that support youth entrepreneurship.

 The guide, which builds on UNCTAD’s Entrepreneurship Policy Framework (EPF) and the Commonwealth’s Guiding Framework for Youth Enterprise, is composed of six guiding principles and policy recommendations (see Figure 1):

• Formulating National Entrepreneurship Strategy
• Optimizing the Regulatory Environment
• Enhancing Entrepreneurship Education and Skills Development
• Facilitating Technology Exchange and Innovation
• Improving Access to Finance, and
• Promoting Awareness and Networking

In recognizing the numerous obstacles that young people face when trying to start or expand a business, the Guide identifies multiple policy areas within each of the six guiding principles and then provides youth-specific recommendations for each particular policy. Seeing as there is no ‘one size fits all’ method, governments need to develop a youth entrepreneurship strategy that is specifically tailored to their country’s socio-economic and development needs. 

Key strategies that the guide focuses on in order to promote the development of youth entrepreneurship include reducing complex regulatory processes, high business registration costs and banking fees and increasing access to financing opportunities, markets, financial literacy and platforms that foster young entrepreneurs engagement. Furthermore, for young people in particular, it is imperative to commence entrepreneurial education at an early age (see figure below). Entrepreneurial skills taught through formal and informal education systems provide young people with the skills necessary to succeed as entrepreneurs and corporate innovators in the future. This education should be complemented by programs that foster the development of soft skills through training, such as UNCTAD's Empretec programme. Empretec has helped more than 350,000 ‘Empretecos’ to date through their training program by helping participants develop the necessary skills required to build a growth-oriented enterprise.   

 Successful initiatives which follow the guides’ policy framework have already been implemented in certain countries, particularly in South Africa, India and Canada. However, in order to fully bounce back from the lingering effects of the 2008 economic crisis, governments need to utilize the young people of today by providing them with the appropriate skills and education needed in order to strive as successful entrepreneurs. By doing so we can reduce the number of unemployed young people and ensure a more stable economic future for decades to come. Stay tuned the Youth Entrepreneurship Framework will be out soon!