Global Development Institute Blog

By Nicola Banks

The Apprentice is one of my TV highlights. Watching through open fingers as Lord Alan Sugar tries to find his next business partner amongst a bunch of hapless contestants makes one thing very clear: No amount of self-belief can make you a successful entrepreneur. Enthusiasm can’t make up for a lack of customer awareness or critical business skills…watching James ‘Multiple Business Owner’ Hill singing The Wheels on the Bus while his tour customers groaned and threw tomatoes (not literally) is one of countless comedic illustrations of this.

Yes, these contestants have been selected to make quality viewing, and yes, they face the pressure of short-timelines, the desperation of winning £250,000 and a business partnership with Lord Sugar, and an editing process that puts customer entertainment first. (They can’t all be that bad, can they?!). But watching each of the 20 contestants make poor decision after poor decision, and watching with relief as Lord Sugar fires one after another, it is clear that we are all far from natural born entrepreneurs. If this was the case, we’d all be millionaires. As we apply the term ‘entrepreneur’ in the UK, there is something unique and intrinsic about it – something beyond initiative, ingenuity, skills and the ability to take risks that you can’t learn in school, at university, or through work experience.

So why in global policy have we focused on ‘youth entrepreneurship’ as a promising solution to the global youth unemployment challenge, which is inarguably one of the most pressing global priorities of current times? The reality of work for most youth in developing countries is informal and poorly paid work or unemployment. In 2013, 73.4 million young people were out of work – an increase of 3.5 million since 2007. Worsening economic outcomes for young people are evident in persistent and increasing unemployment and a proliferation of poor quality, informal and subsistence jobs (‘Global employment trends for youth 2013). Is this an environment in which entrepreneurship can thrive? In what possible scenario can we see entrepreneurship absorbing the growing youth populations who are faced with the continuing prospect of jobless growth (Global Employment Trends 2014: The Risk of a jobless recovery).

This week the UNFPA launched its State of the World’s Population Report 2014. The Power of 1.8 Billion: Adolescents, Youth, and the Transformation of the Future, it is called, and its message is clear. Young people matter. They constitute nearly one-third of the world’s population and their developmental outcomes are a game-changer that can make or break national development goals. That their agenda has been so overlooked for so long has severe implications not only for large sections of this 1.8 billion youth as they struggle to secure their livelihoods and make investments in their futures, but also on economies and societies across the globe. Future forecasts for youth unemployment across all regions look bleak moving forwards, considering the ILO Youth unemployment rate estimates and projections by region 2007-2017.

Entrepreneurship is an obvious solution to promote in such a difficult labour market. High levels of poverty mean that finding some form of income is among young people themselves’ top priorities. It is also an intervention amenable to finding quick-fix solutions, so is attractive to governments and NGOs. It lends itself to tangible and measurable interventions, whether this might be 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” (some may argue that this still exists). I see a similar danger in the current dialogue on youth entrepreneurship. The link in reality is not so clear. Vocational training does not necessarily translate into successful businesses. What about focusing on the quality of skills training? What about proper certification processes and making sure that training aligns with local labour markets? What about oversaturated markets and limited client bases? Of course, drawing on impact evaluations into ‘what works for youth entrepreneurship’ many programmes supporting youth entrepreneurship offer multi-pronged packages of assistance that combine locally-relevant vocational skills with financial management, customer awareness and other business skills. Many also offer access to loans so that young people can invest and utilise these new-found skills.

My concern is not that these programmes are better than an alternative scenario in which they do not exist. My concern is that such widespread promotion of youth entrepreneurship removes responsibility away from governments and private sectors in their roles for creating and expanding access to decent jobs for young people. My concern is in the other major stakeholders driving the agenda. Partnering with the Guardian in their ‘Tackling Youth Employment Hub’, for example, is Barclay’s Bank. Unsurprising, therefore, that among the key messages from many of their inspirational stories of youth entrepreneurship 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 as a solution to poverty? The ‘swift and systematic’ action this ‘sponsored by Barclay’s’ article proposes cannot address the bigger systemic issues we must address. It cannot meet the multitude of social and economic problems the world’s young people face in scale or substance.

We discuss elsewhere how the project-isation of ‘development’ has limited our capacity for facilitating transformative and more socially-inclusive development. Others apply the same argument to the focus on youth unemployment and entrepreneurship arguing that this has ‘magic-ked away’ the politics of a globalised world and left us with well-intentioned, country-specific projects.

Some youth are, of course, changing their futures through self-employment. Despite their limited financial resources, many others are changing the futures of others through social entrepreneurship, drawing on an abundance of creativity, leadership skills and support from inspirational organisations like Ashoka or Educate!. Herein lies another huge difference between young entrepreneurs in Sub-Saharan Africa and Lord Sugar’s protégés. For these youth, it is genuinely a case of people before profits. You wouldn’t see that in the Boardroom. Now is the time for a call to arms in global policy away from youth entrepreneurship towards a two-fold focus on youth engagement – in which employment is but one improved outcome as young people create a critical mass and place themselves at the core of transformations and solutions – and youth inclusion, so they can strive in this process helped by a more supportive social, political and economic environment. In this, I join the State of the World’s Population’s call to harness the power of 1.8 billion in transforming not only their own lives but also our global future.

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