The Challenges And Solutions For Entrepreneurship Among Youths

Photo by Papaioannou Kostas on Unsplash

Entrepreneurship Only For A Few?

Entrepreneurship among young people has seen a remarkable rise in recent years. While older adults aged 50 and above have on average started 3.5 companies, this number more than doubles to 7.7 companies for the new generation of millennial entrepreneurs. This is by far an impressive statistic, and it indicates that the future of entrepreneurship may not be as bleak as one could have thought.

On the flip side however, a BNP Paribas research also revealed that 78% of polled millennial entrepreneurs came from families with a history of running their own business. This was thought to be the case because such youths are exposed to the knowledge, skill and sometimes even resources needed to run a business. Their counterparts on the other hand struggle with the essential know-how and resources for entrepreneurial activities.

That said, despite the great potential possessed by entrepreneurship activities among young people, several challenges are still present. What are they, and what can be done about them? Let’s dive in!

Besides having their innovative nature crippled by education systems, and sometimes even social exclusion, young people also face other significant challenges as far as starting and running a business is concerned.

The Paperclip Study

Among the greatest challenges plaguing young entrepreneurs is that the majority of present day education systems are notorious for prioritising regurgitation of content over innovativeness, creativity and divergent thinking. In fact, the world-renowned education and innovation expert, Sir Ken Robinson points out that our current education system stifles and anesthetises creativity while it lowers the capacity for divergent thinking.

To illustrate his assertion, he refers to the book, Breakpoint and Beyond: Mastering the Future Today. In their book, George Land and Beth Jarman record the findings of a study dubbed The Paperclip Study. In this study the two researchers asked a simple question “How many uses can you think of for a paper clip?”. The study followed 1,500 kindergarten students through elementary, middle and high school tracking their responses.

As the students moved up through grade levels, the authors kept asking them this same question. When the authors first proposed the question in kindergarten, 98% of students scored at genius level in divergent thinking. By the age of 10 years old, only 32% of the same group scored as high, and by age 15, only 10% remained at genius level. When young minds have their creativity and innovativeness stifled, by lack of poor education systems or social exclusion, entrepreneurship efforts are likely to dwindle, much to our own detriment in the future.

What Challenges Are Faced By Young Entrepreneurs?

Besides having their innovative nature crippled by education systems, and sometimes even social exclusion, young people also face other significant challenges as far as starting and running a business is concerned. Some of these problems may include:

- Lack Of Reliable Insights On Entrepreneurship

Among the major obstacles for youth entrepreneurship development is the lack of reliable and up-to-date, personalised information on entrepreneurship.

In order to start and have the ability to run a successful business, having relevant, well-structured and detailed information about global trends, market factors, entrepreneurship opportunities, economic situations among other factors is very necessary. Even though there are many sources out there, not many sources are accessible or relevant to the entrepreneurs’ situation. Fewer still document such reports in a manner friendly enough for the young generation.

The lack of access to such crucial information makes it very challenging for young people to start their businesses, and even when they do, very few stand the chance of growing into successful enterprises.

- Lack Of Funding

According to the GuidantFinancial 2021, 39% of entrepreneurs start businesses with their own funds. But, for a majority of young people, these funds are inaccessible. In a country like the US for instance about 69% students apply for student loans, and the average loan debt they owe by the time they graduate is $32,741. Having such hefty debts at a young age makes it nearly impossible to find enough money to pay them off and at the same time start a business. With youth unemployment and underemployment levels also on the high, more youth lack the financial capacity to start business ventures.

While certain organizations offer funding for businesses, very few young entrepreneurs can access these funds because start-ups are considered high risk by both local and international investors and they would prefer to give the funding to more higher level start ups that already have tested markets and somewhat viable business models. Again, this limits the entrepreneurial capacity of most young people.

- Lack Of Entrepreneurship Training And Education

Almost similar to the lack of information, young people are not well equipped in terms of knowledge and skills to run their own businesses. A majority of them learn entrepreneurship by trial-and-error methods, which aside from being very costly, can end up being frustrating and dissuade them from engaging in entrepreneurial activities because of how unpredictable such activities may appear to be.

We are not insinuating that with entrepreneurship education and training one is guaranteed entrepreneurship success. However, we cannot stress enough that learning about entrepreneurship and receiving coaching at the same time can go a long way in mitigating the risks associated with running a business and ultimately, can empower you to start and run a successful business venture.

What Can Be Done To Make Entrepreneurship More Accessible To Everyone?

As an organization that believes in everyone having access to entrepreneurship, we know that a lot needs to be done. To narrow it down however, we believe that focusing on the following areas would make the process of empowering youths to become entrepreneurs easier.

- Encourage Innovation

Through creating conducive learning platforms that allow young people the freedom to express their innovativeness just as much as they are also taking in information can go a long way towards making entrepreneurship more realizable.

- Provide Entrepreneurship Education And Training

Entrepreneurship shouldn’t be something young people undertake blindly. Instead, efforts should be made towards helping them gain skills and guidance on how to approach entrepreneurial ventures.

- Offer Timely, Tailor-Made Information To Suite Specific Business Needs

Ultimately, from our end, we believe that entrepreneurship education should be made readily available and friendly enough for young people to understand and use.

These three steps that we have proposed are steps that we are taking ourselves, to ensure we can reach as many people as possible, especially youths, with the message that entrepreneurship is for everyone. To understand better how you can empower your ideas into businesses, as well as helping others to do the same, become a part of our community, follow us in your social media channels and join our journey by signing up to our waitlist! 📝