In response to the challenges of high youth unemployment, UNCTAD, in collaboration with Commonwealth, has developed a Policy Guide on Youth Entrepreneurship. It is designed to support countries to develop effective policies that will unleash the potential of youth entrepreneurship.
While it is primarily intended as a resource tool for use by policy-makers, the guide is also relevant for decision-makers in intergovernmental and international organizations as well as NGOs and development agencies involved in youth entrepreneurship.
Recognizing the unique needs of aspiring young entrepreneurs, the Policy Guide on Youth Entrepreneurship, which builds on UNCTAD’s Entrepreneurship Policy Framework, identifies key priority areas for policy focus that have an impact on youth.
Given the challenges that young people face when trying to start and grow their businesses, the guide identifies specific measures under each policy area and recommends actions for policymakers to create an enabling entrepreneurial ecosystem for young people.
Effective entrepreneurship education is key to ensuring that young people acquire the competencies and skills they need to pursue entrepreneurship and lay the groundwork for developing a culture of entrepreneurship.
Concerted efforts are being made to integrate entrepreneurship education within and across regions. UNCTAD’s Empretec programme introduces entrepreneurship to young people, as does other UN programmes such as the International Labour Organization’s (ILO) Know Your Business.
Building the capacity of teachers to inculcate entrepreneurship skills among students is critical in ensuring that entrepreneurship is integrated within the education system.
In addition, there is a need for strengthening the capacity of vocational training and apprenticeship systems to equip young people with the skills to pursue entrepreneurship and self-employment.
Technology and innovation are important drivers of economic development. Business incubators and accelerators such as Start-Up Chile and India’s Start-Up Village have emerged because they provide a conducive environment that nurtures innovation.
Investments need to be made in technological infrastructure to create the foundation for a thriving digital economy and to provide the impetus for the spread of innovation as well as to ensure that young people have access to knowledge and the competencies as well as skills to exploit technology and create commercial products and services.
Access to finance is a binding constraint for young people that want to start or grow a business. Collateral requirements, high banking fees, inadequate youth-friendly products and lack of financial literacy are key bottlenecks for young people. Measures to ensure financial inclusion for young people have been undertaken in several countries.
For example, Kerala Finance Corporation and Bharatiya Yuva Shakti Trust in India provide collateral-free loans to young entrepreneurs. In addition, financial institutions are increasingly orienting their services to meet the needs of young people.
Child and Youth Finance International increases access to financing by young people and Youth Business International provides under-served young entrepreneurs with funding to start and grow their businesses.
The establishment of funds for the purpose of stimulating innovation and catalyzing the development of an entrepreneurial ecosystem that will support innovation designed to benefit disadvantaged groups is discussed, as are programmes such as Aflateen and the Commonwealth Financial Literacy Programme, which are increasing financial literacy among young people.
Enhancing the capacity of the financial sector to serve youth-led start-ups is critical in ensuring that young people have access to relevant financial services.
Finally, societal attitudes towards entrepreneurship, fear of failure, insufficient promotion of entrepreneurship opportunities, lack of platforms to foster young entrepreneurs’ engagement and lack of access to markets are barriers that undermine efforts to create a culture of entrepreneurship.
This report highlights the importance of events such as Global Entrepreneurship Week in showcasing the role of entrepreneurship in society.
The case study of the Commonwealth-Asia Alliance of Young Entrepreneurs (CAAYE) illustrates the importance of the youth entrepreneurship network both as a platform to engage young entrepreneurs and as an entity that advocates for the needs of young entrepreneurs in Asia.
Also, initiatives such as YouthTrade in the U.S. which link youth-led enterprises to other businesses that buy YouthTrade-certified products, support young entrepreneurs to access markets.
It is essential to develop platforms that will facilitate opportunities to engage with young people as well as to promote the development of youth entrepreneurship networks and associations that advocate on behalf of young entrepreneurs.