As the World Bank noted, private sector initiatives for creating jobs are often the most successful as they are more likely to have built-in incentives to respond to the needs of employers and job seekers. Here are some well-known private sector-led initiatives:
Easing access to finance
Though traditionally most youth say that it’s the difficulty they experience trying to get a loan that puts them off trying to start an enterprise, there is now a proliferation of private sector sources for low interest, start-up loans. Organisations like Kiva.org, Lendwithcare.org, Lending Hive, the Vision Fund, the Sparkasse Foundation etc. + supplier credit, franchise & leasing companies are now stepping in to plug this gap which has terrorised young entrepreneurs for so long with punitive annual interest rates of well over 50%.
“Loans and returnable capital have to be the finest and fairest form of development aid because, unlike grant aid which casts the recipient in the role of a mendicant, a loan is a contract between equals. Loans empower. Grants disempower.” David Woollcombe, Lead author
Enable women to borrow for their businesses: Women are also beneficiaries of the online crowdsourced loans for start-ups, but cultural attitudes towards women’s economic empowerment means specialist programmes are often required. Goldman Sachs 10,000 women started in 2008 to provide women entrepreneurs around the world with business management education, mentoring and networking skills, and access to capital. The initiative has reached more than 10,000 women in 56 countries, resulting in immediate and sustained business growth for its graduates. Partnering with IFC, it has also raised US$600m in capital for 100,000 women around the world.
Women’s World Banking (WWB) has, over the course of more than 35 years, helped nearly 3 million women access the financial tools and resources they require to build security and prosperity. Women are typically good clients who reinvest in their families and communities, but they remain an underserved market. WWB does market research to learn what financial products low-income women need, then develops new and practical ways for institutions to do business with women designing sustainable financial products.
Equity for Tanzania(EFTA) – Leasing equipment not lending cash
EFTA enables farmers and small businesses to acquire machinery to improve productivity. As the equipment serves as the underlying collateral, entrepreneurs can obtain the equipment they need without having to risk everything as security for a bank loan. To date, EFTA has advanced $8 million creating or safeguarding over 1,000 jobs, with 20% of these going to female employees. In many companies, staff wages have doubled post investment. EFTA has also provided training and networking events to over 1,400 small businesses.
- James Rikoyan, 27, runs a brickmaking business in Tanzania. EFTA leased him high-quality vibrating block machines, cement mixers and moulds to improve brick quality and expand his business. He said: “EFTA empowered me to reach my goals and to become my own boss.”
- Anna Martin Mengor’iki, 29, wanted to start a business providing private medical care to Arusha’s growing population. EFTA leased her modern laboratory equipment to support her business plan and catalyse her business
Paying for it – some policy ideas: Enabling successful youth business start-ups is not a one-off project: to succeed, it has to be available to every child everywhere. Governments – local, national and international – can do this in several ways: they can require banks to invest a percentage of their profits in their future clients (youth)or invest in arms-length instruments like Start-up Loan companies, VSLAs or MFIs for youth such as YouthBank International or those started by Julius Shirima in Tanzania, or Alpha Bacar Barry in Guinea. Online crowdsourced funding is a promising growth area, while list over fifty funding sources for youth start-ups.
Franchising opportunities: Franchises attract inward investment at low risk and measurably improve the management skills of a country’s young entrepreneurs with free, experiential training. This could be a promising area of growth in LEDC economies and organisations such as the International Franchising Association seek to promote such opportunities worldwide, adopting the slogan, “Owning a franchise allows you to go into business for yourself, but not by yourself.”
Cleaning up the informal sector: The ILO’s Syndicoop programme has changed approaches to informal work in East Africa by encouraging informal traders into co-operatives. For example, the Assetamorwa motor-cycle co-operative in Rwanda obtains better deals for its members by training riders, negotiating with city authorities and traffic police etc. A similar cooperative helps traders in the Gikombo market in Nairobi. Given that the ‘informal’ will remain normal for millions of workers for many years, interventions aimed at improving informal working conditions – rather than attempting to formalize their work – need to be encouraged.
Enternships: Enternships’ mission is to help recent graduates find the best opportunities to kickstart their careers, mostly in tech companies. Since 2009, the organisation has helped thousands of graduates finds jobs and internships in more than 7,000 companies including Telefónica’s Wayra, Propercorn, Havas, eHarmony and Santander – all with a focus on enterprise. Their blog lists some astonishing stories and ideas for how to find or create jobs.
AIESEC: AIESEC is one of the world’s largest youth-run organisations, with 2,400 campus groups in 126 countries, organising tens of thousands of internships and volunteer experiences for youth leaders every year. Its target is to provide life-changing leadership experiences to 1 million young people in the next three years. AIESEC counts a Nobel Peace Prize laureate and many world, business and NGO leaders among its one million-strong alumni community. AIESEC members can experience paid internships in companies, NGOs and development organisations that see the internship as a way of recruiting and shaping top youth talent. “AISEC is a strategic talent provider –that’s how we want to grow with AISEC.” Laurence Dumont, Global Co-ordinator
Branson Centre of Entrepreneurship – South Africa and Jamaica: The Branson Centre of Entrepreneurship focuses on providing aspiring entrepreneurs who have started a business with the skills, opportunities and inspiration to grow their businesses. It does not provide funding but assists entrepreneurs with access to networks, knowledge, resources and markets. Once they have completed the development programme, entrepreneurs are introduced to the Circle of Excellence, which gives them access to mentoring, coaching, additional programmes, workshops and initiatives. The centre also provides Business Bootcamps, impact accelerator programmes to teach business skills quickly and effectively.
Travel and tourism – is the world’s fastest growing job sector. It is expected to add 86 million new jobs by 2026. Chris Nassetta, president and CEO of Hilton Hotels, started his career cleaning toilets at a Holiday Inn. With six daughters of his own, he has partnered with groups such as IYF to find out more about how young people think about their career paths. A recent youth survey sponsored by Hilton found that only 17% thought hospitality was an attractive career, while 47% favoured technology. Consequently, Hilton runs an annual Youth in Hospitality celebration, along with apprenticeship programmes to expose more than 1 million youth to the hospitality industry – and tell the story of how one young man who started cleaning toilets rose to become CEO.
Accenture’s Skills to Succeed programme advances employment and entrepreneurship opportunities by using technology to drive impact at scale. To date, Accenture has donated $300m to the programme, equipping 1.2 million people with skills to succeed. The programme draws on two of Accenture’s core capabilities: developing talent and convening partnerships to achieve tangible, measurable results. It has set itself and its partners the following targets by 2020:
- Demand-led skilling to equip 3 million-plus people with the skills to get a job or build a business.
- Achieve employment and entrepreneurship outcomes and improve the sector’s collective ability to measure and report on these outcomes.
- Collaborate for systemic change to bring together organisations across sectors to create large-scale, lasting solutions aimed at closing global employment gaps.
Microsoft 4Afrika: Microsoft 4Afrika focuses on three areas:
World-class skills: Microsoft plans to develop a self-sustaining, world-class education platform, both online and offline, to help Africans develop skills for entrepreneurship and improve their employability and competitiveness. To that end, it has established the Afrika Academy, a unique way for students to learn and interact online with experts from across the African continent.
Access: Provide affordable access to technology, particularly cloud services and smart devices that can and will serve as a great accelerator for African competitiveness. The 4Afrika Initiative intends to help provide affordable access to smart Windows devices, including PCs, slates and phones for young Africans.
Innovation – Microsoft wants to help ignite African innovation for the continent and for the world. It is committed to working closely with African ISVs and developers to accelerate the development of highly relevant apps – by Africans, for Africa. It is investing in developers to enable them to get access to the technology, mentorship, connections, and go-to-market support they need to thrive.