Why Stereotypes Are Damaging To Youth Involvement In Entrepreneurship

“Young people under the age of 35 start about one-third of new firms, but their businesses tend to exit more quickly than small businesses with older owners.” These are the exact words from a report released by JPMorgan Chase Institute.

This report is based on data from a study involving 138,000 US-based businesses, each with fewer than 500 employees. In great detail, the report reveals that a 60-year-old entrepreneur’s company has an 8.2 percent chance of going out of business in the first year, 9.6 percent for a 45-year-old entrepreneur and 11.1 percent for a 30-year-old founder.

The average number of new small businesses started in the US as of March 2019 reached 774,725. If people aged 35 and below start a third of these businesses, and 11.1 percent of them are likely to go under within their first year of operation, then that means about 29,000 out of 258,242 businesses started by young people crash every single year, in just one country.

Simply put, young people are less likely to start a business, and even if they get to start one it is more likely going to fail. So, why is this the case?

Just as it is the case in social exclusion, stereotypes about youths in entrepreneurship also bear a heavy consequence on the level of entrepreneurial activities and economic growth of any region.

What Stereotypes Hinder Youth Involvement In Entrepreneurship?

When we hear the words “young entrepreneur,” we typically get an image in our brains of a tech-savvy millennial producing an app or a business, perhaps fresh out of college, in their mid-to-late 20s, loving every minute of it. However, behind this media-generated façade of the life of young people venturing into entrepreneurship, lies the more detailed, less admirable reality of being a young person pursuing a business initiative.

It would be assumed that in a world where the global youth unemployment rate stands at 13.6% and 23% of young people currently employed earn less than USD1.25 a day, the efforts made by youths to create sources of income through entrepreneurial activities would be highly encouraged. But this isn’t always the case. In fact, many societies are riddled with so many stereotypes that negatively impact the ability of your people to indulge in entrepreneurial activities. Some of these stereotypes include:

You Must Have A Lot Of Experience Before Starting A Successful Business

Often, young people are made to believe that their youthful days should be spent trying to gain experience in their respective areas of interest, so that when they get to their middle age they can use this experience to set up their own businesses. While this concept is helpful in allowing youths to gain more insight and prepare themselves for the nooks and crannies of starting a business, it can also be a hindrance for youth entrepreneurship.

In our opinion, there is no “right” time to start a business. You will never be fully ready, fully equipped, or even fully funded. We believe that the best time to start any entrepreneurial activity is when you have an idea of a business that you can start. Since ideas are not confined to older individuals only, then young people have no reason to believe that they must wait until they are much older to start a business.

Older People Are Automatically More Knowledgeable

It is a given that age brings with it experience and exposure that can make one more knowledgeable of certain issues. Nevertheless, this should not be taken to mean that younger people lack the ability to be knowledgeable in as far as entrepreneurship is concerned. In fact, young people, given their curious nature, ability to keep up with emerging technology and their enthusiasm, possess a great potential for gaining and expressing business-related knowledge.

Unfortunately, what young people lack is a suitable environment from which to acquire this knowledge. Plagued by education systems that tend to emphasize the power of internalization and memorization over that of questioning and finding solutions to problems, young people are put at a disadvantage. In fact, the major reason why young entrepreneurs appear less knowledgeable than their older competitors, is the fact that young founders are not well equipped with knowledge and skills to run their business.

You Have To Work To Save Capital For Your Business

In line with the lack of knowledge and skill in matters of entrepreneurship, young people are often poorly informed on financial matters. When it comes to entrepreneurship, they are not cognizant of the opportunities that exist for raising or sourcing capital. They have been made to think that only their savings can be converted to capital.

Of course with the ever-increasing number of students with college loans, young people not getting meaningful employment and the overall economic situation in many parts of the world being dire, young people take a longer time to raise funds to start their businesses and that means they start fewer and often underfunded businesses which often fail for lack of funds.

Changing The Stereotypes Of Youths In Entrepreneurship

Just as it is the case in social exclusion, stereotypes about youths in entrepreneurship also bear a heavy consequence on the level of entrepreneurial activities and economic growth of any region.

That said, we believe that these stereotypes need to be lessened if not done away with all together. To achieve this, we believe that entrepreneurship education needs to be made accessible to everyone. Young or old, there should be no bias as to who can become an entrepreneur.

The beauty of entrepreneurship education is that it can help reshape the perceptions that many have about youth involvement in entrepreneurial activities. At the same time, entrepreneurship education is vital in helping the youths bridge some of these gaps that make them appear as less competent entrepreneurs when likened to their older counterparts.

For us, the world can become a place where no idea are inhibited and the first step towards getting there is to make sure that as many people, especially young people, know that entrepreneurship is an option for everyone, and a great one at that. It’s about time we levelled the playing field for young entrepreneurs and we believe entrepreneurship learning is the way to go. Care to go with us?

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