This story is part of the #MissingEntrepreneurs 2023 campaign, which features an OECD-EC report analysing the challenges that underrepresented groups face as entrepreneurs. We will shine an entrepreneurial light on the stories of women, young people, seniors, people with disabilities, immigrants and unemployed people.
Three years ago, young people were reeling. As a result of the COVID-19 pandemic, they found themselves shut out of classes, jobs, and the world of business. The hours worked by young people fell by twice as much as for older workers, and there was a spike in the number of 18-to-29-year-olds reporting a mental health issue; more than doubling in several countries compared to 2019. Yet now young people are bouncing back, creating their own opportunities as entrepreneurs.
Youth self-employment is growing
The recent OECD-EU Missing Entrepreneurs report shows that the number of self-employed young people has surged in the European Union (EU) since the end of 2020 despite the difficult conditions caused by the COVID-19 pandemic. Remarkably, there were 14% more self-employed youth (15-24 years old) in 2023Q2 than at the end of 2019 when self-employment overall had not yet returned to pre COVID-19 levels.
The appetite has always been there. Nearly 40% of 15-30 year olds in the EU report that they would prefer to be self-employed over working for someone else. Most are motivated by the opportunity to follow their passions (46%), but many noted a desire to create their own job (28%), become wealthy (26%) and put innovations into practice (24%). While this interest is long-standing, the growing number of European Unicorns and high media visibility of their founders are helping to promote a positive image of entrepreneurship.
Yet young entrepreneurs are now making it a reality, empowered by digital tools. The new breed of young entrepreneurs is more likely to be operating their businesses online, which have grown since the onset of the pandemic. For example, a recent report by Youth Business International found that two-thirds of young entrepreneurs operated their business mostly or entirely online, while only 40% of entrepreneurs over 55 do. While online businesses certainly have lower start-up costs, the majority of young people use online tools for learning and networking to help their business develop.
On the other hand, some entrepreneurs start their business because they have difficulties finding a job. The job market for many young people has been difficult in recent years with several shocks (e.g. financial crisis, COVID-19) as well as structural changes such as automation, digital transformation and a continued decline of the agricultural sector. Between 2018 and 2022, nearly one-in-six young entrepreneurs in the EU report that they started their business because they could not find a job, which is up from about 11% over 2015-19.
Yet not all young people have the opportunities and resources to start their own business
There is still untapped potential in youth entrepreneurship. Young people are less likely to be self-employed now than they were before the financial crisis (2008-09) and are also less likely than “core age” men (i.e. 18-30 year olds vs. 30-49 year olds) to be creating and managing new businesses. If they created them at the same rate, there would be an additional 3.6 million young entrepreneurs in the OECD. This gap is due to several barriers, including a lack of skills, experience, and money.
One of the main challenges is that young entrepreneurs have difficulties building entrepreneurship networks that can facilitate access to ideas, people and money because many older entrepreneurs, investors and business professionals do not see young people as legitimate entrepreneurs. Their loss is our loss, as these missing young entrepreneurs represent lost jobs, businesses and innovations.
Partnering with non-government organisations to untap ideas from underserved groups
Governments have been supporting young entrepreneurs for many decades and this commitment has been renewed following several labour market crises over the past 15 years. One of the most significant underserved groups of young people are NEETs (i.e. those not in employment, education or training). Many NGOs are partnering with governments to deliver entrepreneurship training and support to NEETs such as YES, I Start Up Scheme in Italy and Young Entrepreneurs Succeed! (YES!) in Germany, Greece, Italy, Poland, Spain and the United Kingdom.
However, support does not always effectively reach all young people and non-government actors can play an important role in supporting those who fall between the cracks. For example, the Economic Opportunities for All initiative, launched by JA Europe in April 2021 with support from the NN Group. It is comprised of entrepreneurship education programmes for schools in lower socio-economic areas to spark their interest in entrepreneurship and provide some entrepreneurship experiences. To date, the initiative has trained more than 13 000 young Europeans, including VET students, disabled youth, migrants, youth living in remote and rural areas in Romania, Spain, Netherlands, Greece and Türkiye. In addition, more than 400 have been supported in securing employment.
There are also examples of initiatives for young female entrepreneurs (e.g. the Young Ladies in Business Club in Bulgaria), young black and indigenous entrepreneurs (Futurepreneur in Canada which offers programmes for young black entrepreneurs and young indigenous entrepreneurs) and more.
Governments need to develop deeper partnerships with NGOs
Non-government actors can be great partners for governments seeking to enable youth entrepreneurship. In many cases, they are better placed to deliver support initiatives for several reasons. First, NGOs have knowledge and experience about young entrepreneurs that could help governments identify policy gaps and areas of action. Moreover, their knowledge helps strengthen strategies and policies, including entrepreneurship education. Second, NGOs could increase the impact of public policy when they have shared objectives. This calls for strengthening relationships between ministries and youth organisations, which will also reduce duplication. Finally, NGOs with a successful track record offer an opportunity for governments to provide more cost-effective support by capitalising on their infrastructure, networks, and connections with young people. Because as any entrepreneur will tell you, scaling up a tried and tested method is easier than building from scratch.
The OECD and European Union are working to build bridges between governments, youth entrepreneurship organisations and young entrepreneurship through the Youth Entrepreneurship Policy Academy. This initiative facilitates international discussions between actors so that they can share about challenges and innovations, all in the spirit of learning and working together.
Salvatore Nigro dedicates his energy and passion to preparing young people to succeed in a global economy. He specialises in multi-stakeholder partnerships, workforce development and entrepreneurship programmes.
Salvatore joined JA Europe in 2020 after having spent twelve years at Education for Employment (EFE). As CEO of EFE-Europe and Vice-President of EFE-Global, Salvatore led EFE’s business development, partnership and programme management in Europe to support operations in the Middle East and North Africa. He previously was Director of the International Partnerships and Advocacy Department of the Glocal Forum and worked at the Italian Ministry of Foreign Affairs.
Of Italian origin, Salvatore holds an MBA from the University of Malta, an MA in International Strategic and Military Studies, and a MA in International Political Science from LUISS University.
Mr. David Halabisky is a project co-ordinator in the OECD Centre for Entrepreneurship, SMEs, Regions and Cities. He is currently working on several projects related to entrepreneurship policy, including a multi-year project on inclusive entrepreneurship and is the main author of the Missing Entrepreneurs reports. Prior to joining the OECD, David worked for more than a decade in the Canadian Public Service where he worked on SME policy at the Federal Ministries of Industry, Finance and Labour. Mr. Halabisky has won several awards during his career, including a Best Paper Prize from the Administrative Sciences Association of Canada. He has degrees in economics from the University of British Columbia and McMaster University.