W H A T W O R K S
Once governments and others have succeeded in changing the mindsets of their youth to embrace enterprise, What Works is for governments and society to create nurturing environments that “enable” that enterprise. This starts with ‘ideation’ and proceeds through careful research to the costing and elaboration of a viable business plan. Then, to become operational, most business plans require access to low-cost flexible start-up loans, supplier credits or business equipment leasing arrangements. Women, too, must have unconstrained access to such credit, and it can come in a bewildering variety of forms: angel or family investors, impact investors, venture capitalists, online crowdfunding sources (such as kiva.org and lendwithcare), peer-lending schemes, Village Savings and Loan Associations (VSLAs), and many others. Policymakers need to encourage and expand this variety.
To ensure youth business start-ups are registered and pay taxes, governments must open up one-stop shops or online websites for easy, cheap business registration.
Caring mentorship is also vital: research done by Youth Business International (YBI) in several countries shows that, where there is effective mentorship, 70%-80% of youth start-ups are still in operation after three years. Where there is no mentorship, that figure falls to less than 50%.
Governments must also ensure that there is wide access to hi-speed internet to accelerate the spread of internet-based jobs. And they must provide market information about the industries and businesses where their country has competitive advantage.
Finally, governments must embrace the reality that most young people will not set out to start an enterprise: most youth would far prefer to land a steady job with a pay check going into their bank account at the end of every week. Most successful entrepreneurs have started out working for others before they strike out on their own. But, in LEDCs, ‘necessity entrepreneurs’ are what most youth have to be – forced into enterprise creation by the lack of any available waged jobs. And, rather than lazily falling into whatever enterprise their parents or family have done for years, they must start the process of setting up an enterprise with ‘ideation’ – thinking about what they themselves want to do; doing the market research and competition analysis, finding gaps in the marketplace, and preparing a business plan. At the bottom end, this can provide ‘survival employment’ for young people and their families. At the top end, for the lucky, talented few, these opportunities can create a thriving business that employs several people and provide a satisfactory livelihood for all of them.