Young Entrepreneurs: the Key to Economic Growth

economic growth

Are Young Entrepreneurs the Key to Economic Growth?

economic growth

As I talk to youth and young adults in my community (an age group that now ranges from 15 – 39) I notice a trend – many are unemployed or underemployed after graduation and face a somewhat bleak future with an economy that seems to be closing more doors than it opens. It seems there is no shortage of people working two or even three jobs just to make ends meet. Many youth work outside their field of education waiting for an opportunity that may never come.

This paints a gloomy picture of job futures for new graduates saddled with heavy debt. The youth unemployment rate currently sits around 13.3% in January 2017 according to Trading Economics website. Many youth have returned to school for additional education but is that truly the answer in a bleak job market? What good is a diploma or a degree in a field that will not exist or be drastically different in just a few years? Technology and job skills are changing faster than educational institutions can update skills thus many graduates complete school with already outdated skills. Add to this the fact that many jobs want one or more years of experience in the field for an entry level position. So what can our youth do?

Co-operative education opportunities help as do summer employment opportunities. Still, the available jobs are far less in number than the number of grads looking for jobs. One exception however is skilled labour as there continues to be a shortage of people with highly specialized skills to operate certain equipment and perform other tasks.

The high youth unemployment rate is not limited to Canada. At the 2014 G20 Young Entrepreneurs Alliance Summit in Sydney, Australia, and subsequent international entrepreneurship conferences, each of the G20 countries reported similar findings with non-G20 countries being at even greater risk. Top complaints included a lack of full-time permanent positions, changing job market, low wages and more.

There is an answer however. Youth entrepreneurship is the key to economic growth. For every business venture launched, there is a potential for job creation. Entrepreneurs account for 98% of SME (small medium enterprise) in Canada. With over 50% of current business owners set to retire in the next 10 – 20 years, and over 70% of existing jobs to disappear in the same time frame, it is vital that our youth step in to replace these outgoing business owners.  Entrepreneurs are also innovative and will create the jobs of the future that currently do not exist. We innovate and create; we take nothing and make it into something.

So what needs to be done to support young entrepreneurs and encourage economic growth?

First – we need to connect youth to the local community. David K. Foote, Professor of Economics at University of Toronto and author of Boom, Bust, Echo,  spoke at an Economic Development Conference I attended a few years ago and spoke of this need to connect, an idea that has stayed with me. Youth will leave the community – for school, to explore or for other reasons – it’s in their nature. But, when youth decide to settle down, their connection to their home community comes into play. When youth are involved with and feel part of the local community they are more likely to return to that community to settle down, work and raise a family. It is because they feel welcome, because they feel valued. Community ties are important and too often I see the lack of youth involvement in the business community. The high schools and colleges need to be included and/or invited to be part of local business events wherever possible.

Second – offer entrepreneurial education at a younger age. When entrepreneurial education (mindset, soft skills, financial literacy and more) is taught at a young age, it becomes a natural part of life. As youth grow, they have the necessary skills to create ideas, innovate and solve problems, keep track of money and learn new skills. These skills will assist youth as they enter the workforce as youth will be able to adapt to the changing marketplace, more easily adopt new technology and think differently to allow for greater flexibility in provision and design of services and products. And, these same youth will be equipped with skills to develop their own businesses or social organizations which, in turn, are likely to create jobs thus creating economic growth. Our current generation has also been born thinking global. Their world consists of not only their community but the entire planet thus their perceived market is far greater than that of the baby boomer who was unlikely to think of a global market at the start of their career. This type of thinking helps the global economy as well as the local economy.

Third – provide more transparency and additional youth funding. Ever try to navigate government funding programs or any government website. I doubt that even someone with a Masters degree in the subject (which doesn’t exist) would be easily able to navigate most sites. It is not uncommon to speak to one department in the same city who is not aware of a program in another department or to need to go to numerous places to find out about potential funding options including things like hiring grants. And, even employees in the departments may not have the right information. When I started my first business, a city employee told me I didn’t need a permit because of the type of my business except a very similar business had to get one. Confusing? Yes. When the information is not clear, it can be very frustrating. There are also numerous programs available to help small business, entrepreneurs and startups but unless you somehow stumble across one you may never know it exists. Further, even should you find the program you then need to navigate through the program to determine eligible, deadlines and a multitude of other things. Youth over 18 have a few funding options to assist them such as Futurpreneur unsecured repayable loans however their are few programs outside Summer Company that offer funding for those under 19 or that offer funding to pilot a project or validate an idea which can make it very tough for many young entrepreneurs to get started.

In summary, if we want to see the economy continue to grow as existing business owners retire and current jobs disappear, we need to ensure that we empower the next generation to be ready for the future. That means more up to date training, providing entrepreneurial skills in high school or younger, connecting the community and transparency in government services and funding, access to information (including metrics and data collected by cities). The next generation – our current youth – are the key to future economic growth. With our help, the growth will be exponential.