The proportion of young individuals participating in self-employment varies globally, potentially indicating differences in barriers, opportunities, and labor market conditions. Regions with a notable prevalence of self-employment tend to also have higher rates of youth self-employment, while areas offering plentiful opportunities for wage employment may see fewer young people pushed into self-employment, leading to lower rates among youths. Despite sharing similar motives, young and adult entrepreneurs frequently employ different strategies and operate distinct types of businesses.
What Types of Business Models do Youth Use?
1. Sole-Proprietorship Self-Employment
The most common form is sole-proprietorship self-employment, with approximately three million of these businesses starting in Europe every year . These enterprises serve as the primary catalyst for job creation. Nevertheless, alternative business models like part-time entrepreneurship and cooperative ventures can fulfill different objectives such as fostering social inclusion.
2. Part-Time Entrepreneurship
Part-time self-employment holds appeal for young entrepreneurs as it offers a pathway into entrepreneurship while simultaneously pursuing education or holding paid employment. Although young individuals are less inclined to engage in part-time entrepreneurship alongside paid employment, data from the United States shows that 5.5% of young adults in post-secondary education uses self-employment to fund their studies. This approach presents an attractive entry point to entrepreneurship due to its lower capital requirements and reduced risk of failure. Additionally, part-time self-employment offers valuable hands-on experience in managing a small-scale business.
3. Cooperative Enterprises
Cooperatives represent another form of enterprise that may attract young people. These ventures involve pooling collective resources, with entrepreneurial endeavors aimed at mutual benefit. It is defined as autonomous associations of individuals voluntarily united to meet shared economic, social, and cultural needs and aspirations through jointly-owned and democratically-controlled enterprises.
Cooperatives, despite their complex decision-making processes, offer allure due to the potential for members to achieve more collectively than individually. This aspect can be particularly advantageous for young entrepreneurs seeking to overcome limitations in resources and expertise.
Despite the United Nations estimating that the cooperative sector comprises over 800 million members across 100 countries, youth participation remains low. Many young entrepreneurs concentrate solely on local markets due to familiarity and a lack of awareness regarding opportunities in other markets and how to capitalize on them. Nevertheless, young entrepreneurs are often more receptive than their adult counterparts to international ventures.
Fostering Entrepreneurial Spirit
Entrepreneurship skills programs aim to address the challenge of insufficient knowledge, skills, and attitudes towards entrepreneurship, as well as a lack of prior work and entrepreneurial experience. These programs equip young individuals with competencies such as identifying opportunities, creating business plans, and operating trial businesses, alongside soft skills like initiative, creativity, independence, and teamwork. Such skills are valuable not only for aspiring entrepreneurs but also for those pursuing employment, while also fostering greater awareness among young people about self-employment as a viable career path.
These entrepreneurship skills initiatives are often integrated into the education system, with objectives tailored to different student age groups. At lower educational levels, the focus is on introducing entrepreneurship as a career option and fostering a foundational set of knowledge, skills, and attitudes conducive to entrepreneurial behavior.
Methods may include inviting local entrepreneurs to share insights in classrooms or arranging visits to small businesses for firsthand observation and learning. Entrepreneurship education should increasingly emphasize practical skills acquisition through activities such as establishing simulated or actual business enterprises, particularly at higher education levels where students need essential skills for business startup and operation, alongside understanding the importance of networking.
Traditionally, entrepreneurship education at higher levels has involved establishing specialized schools or integrating entrepreneurship into conventional subject teaching. Moreover, policymakers should reassess the role of entrepreneurship training within vocational education, considering how vocational schools engage with industry.
While current vocational entrepreneurship education often prioritizes formal business planning, there should be a shift towards practical business development and real-world knowledge acquisition. This could involve radical changes like establishing separate schools focused on owner-managers and entrepreneurship development, or more gradual reforms enhancing entrepreneurship integration within existing vocational curricula, teacher training, assessment methods, and industry engagement.
Entrepreneurship skills development can also occur outside formal education systems through government partnerships with community and business organizations, providing students with firsthand exposure to business operations. Additionally, mentorship programs like the ‘Mentors In Nigeria Initiative (MINI)’ initiative facilitate skill acquisition through interaction with experienced entrepreneurs.
While evidence linking entrepreneurship education to business startups is not extensive, studies from various countries indicate increased student interest in entrepreneurship after exposure to such programs. Surveys also suggest a notable proportion of program participants eventually start their own businesses, with alumni demonstrating a higher likelihood of entrepreneurial engagement compared to the general population. However, there are instances where participation in entrepreneurship education may lead some individuals to realize that entrepreneurship is not suitable for them.
Infrastructure Development for Entrepreneurship
Nigeria’s global industrialization performance is hindered by deficient infrastructure like inadequate electricity and road networks, coupled with inconsistent government policies lacking robustness. These policies includes aspects such as tax subsidies, import substitution strategies, and initiatives promoting local content. To bolster young entrepreneurs, governments must prioritize establishing supportive infrastructure to mitigate hurdles related to networking limitations, skill deficiencies, financing for facilities, and access to startup assistance.
Key initiatives within this realm involve fostering networks for young entrepreneurs and setting up business incubators. These networks and associations offer vital opportunities for mutual learning, business connections, and collective advocacy for youth interests in governmental and industrial spheres.
Internationally, organizations like Junior Chamber International (JCI) play a crucial role, boasting a membership exceeding 200,000 youths aged 18 to 40 across over 100 nations. JCI organizes various conferences at local, regional, national, and international levels to facilitate networking and knowledge-sharing among young individuals. Furthermore, it provides training and acknowledges members’ accomplishments through award ceremonies.
Another effective policy tool is the business incubator, which not only offers startup funding but also provides physical workspace where startup founders can collaborate. Additionally, incubators typically offer ancillary support like coaching, mentoring, advice, and access to expert networks. While many incubators cater to entrepreneurs in general, several universities host youth-specific incubators tailored to their students and graduates.
Research indicates policymakers can achieve notable success in enhancing startup outcomes by improving the entrepreneurship support ecosystem. However, it is essential to acknowledge that the effectiveness of business incubation programs is often influenced by a selection process favoring projects with high growth potential. Thus, evaluating the additional impact of these programs necessitates matched sample approaches.
Although there’s a scarcity of evaluations specifically targeting youth incubation programs, the relatively lower costs associated with youth networking initiatives suggest they could be efficient tools if they achieve meaningful impacts.
Implementing Entrepreneurship Education Programme
1. Entrepreneurship Education Project
A notable initiative in Nigeria’s transition towards fostering entrepreneurship development involved collaboration between the government and the National Board for Technical Education (NBTE) to incorporate entrepreneurship education into the curriculum of all tertiary institutions nationwide.
2. Teacher Entrepreneurship Training
The establishment of entrepreneurship centers facilitated the development of programs aimed at training educators to effectively teach entrepreneurship education curricula. Specifically, a methods course was created through workshops and seminars to equip trainers with the skills and mindset needed to impart entrepreneurial abilities and attitudes to trainees, regardless of gender, thereby challenging stereotypes associated with entrepreneurship.
Faculty members underwent training from reputable organizations and institutions, both domestically and internationally, including Entrepreneurship Development Institute of India (EDI), Oxford Brookes University UK, University College Lancashire, Pan Atlantic University Lagos, and the British Council, among others.
3. Curriculum Development
The National Board for Technical Education (NBTE) formulated an entrepreneurship education curriculum framework and devised syllabi for all levels of training in Nigerian Polytechnics. This framework included various core areas, including entrepreneurship and self-employment, identification of entrepreneurial opportunities, raising entrepreneurial awareness, understanding entrepreneurial motivation, acquiring entrepreneurial competencies, and mastering enterprise management.
The entrepreneurship education program primarily targets the pre-start phase in vocational institutions, aiming to cultivate favorable business and entrepreneurial mindsets in trainees before they embark on self-employment endeavors. As part of this initiative, all students enrolled in technical training institutes at the artisan, craft, and technician levels are mandated to complete a 154-hour course in entrepreneurship education to foster positive attitudes towards self-employment and entrepreneurship. Moreover, trainees undergo practical exposure to business planning and are required to develop a comprehensive business plan prior to graduation.
Conclusion
Fostering youth entrepreneurship requires a multifaceted approach including diverse business models, robust education initiatives, and supportive infrastructure development. Sole-proprietorship self-employment, part-time entrepreneurship, and cooperative enterprises offer varied pathways for young entrepreneurs to navigate.
Entrepreneurship education programs play a pivotal role in equipping youth with essential skills and attitudes, while infrastructure development, including business incubators and networking initiatives, provides vital support. Collaborative efforts between governments, educational institutions, and organizations are essential for creating an enabling environment where young individuals can thrive as entrepreneurs. By addressing barriers, promoting opportunities, and enhancing skill development, societies can unleash the full potential of youth entrepreneurship for economic growth and social prosperity.
