EntrepreneurShip – Sailing to Success

Posted: 2017-12-17
Written by: EU Network
Category: Europe
Tagged: youth eu entrepreneurship employment

Young people have been hit very hard by the economic crisis and many young people feel that in their country they have been marginalised and excluded from economic and social life. Youth unemployment rates are still high and one in four young people (under 25) is unemployed in the European Union. Youth unemployment is still at crisis levels in many European countries. According to the latest Eurostat figures, in January 2017 4.017 million young persons (under 25) were unemployed in the European Union, of whom 2.826 million were in the euro area. In January 2017, the lowest youth unemployment rate was observed in Germany (6.5%), while the highest were recorded in Greece (45.7% ), Spain (42.2%) and Italy (37.9%).

Despite progress over the last years, early school leaving remains at unacceptable levels for example the highest level has been recorded in Spain(26.5%) and Portugal (23.2%). Young people have left school, seeing no space for diversity of learning preferences. Their self-confidence is often characterised by phrases such as, “I am no good at learning”. Others might find learning boring, difficult and painful.

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Education is often about power, which may end up in learnt powerlessness in the context of learning. Attention should be focused on the development of entrepreneurial skills, because they not only contribute to new business creation but also to the employability of young people. Literacy, numeracy and basic maths and science are key foundations for further learning. These skills are nonetheless being redefined by the ongoing digital revolution. In a world of international exchanges, the ability to speak foreign languages is a factor for competitiveness. Languages are more and more important to increase levels of employability and mobility of young people, and poor language skills are a major obstacle to free movement of workers. So it would come as no surprise if the word ‘learning’ did not elicit positive feelings and enormous excitement among young people. Education needs to drive up both standards and levels of achievement to match this demand, as well as encourage the transversal skills needed to ensure young people are able to be entrepreneurial and adapt to the increasingly inevitable changes in the labour market during their career.

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Businesses require the language skills needed to function in the global marketplace. Increasing transversal and basic skills alone will not be sufficient to generate growth and competitiveness, and there is still too much distance between the educational environment and the workplace.  The share of 15 year olds in Europe that have not acquired basic skills is around 20%, while five countries have over 25% low achievers in reading. As we know, many young people have been almost literarily traumatised by formal education systems.

43 managers, experienced youth leaders and project managers from Denmark, Croatia, Czech Republic, Germany, Greece, Latvia, United Kingdom, Former Yugoslav Republic of Macedonia, Turkey, Lithuania, Portugal, Spain, Italy, Romania, Hungary gathered together in Denmark for contact making event “EntrepreneurShip – Sailing to Success” to promote cooperation between organisations in the European Union program Erasmus+ Programme countries in order to foster entrepreneurship among youth and to test their project ideas  and to create concrete proposals for promoting entrepreneurial spirit amongst youth through utilising the best practices.

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Logo of the contact making event made of  Lego bricks by participants in Denmark. The Lego Group began manufacturing the interlocking toy bricks in 1949 and it has become one of the simbols of Denmark.

The younger generation is currently faced with a situation where there is not only a lack of jobs, many jobs are simply inaccessible to many, especially those who live in deprived areas and who may not have access to adequate education and training. This situation dramatically changes a young person’s ability to plan their future and their general outlook on life. The share of youth which are neither in employment nor in education or training in the youth population the so-called “NEET rate’’ in the European Union from 17.6 % in 2006 to a relative low of 16.5 % by 2008, but then jumped to 18.5 % the following year, after the onset of the global financial and economic crisis.

 

One potential way of integrating young people into the labour market is to increase youth entrepreneurship.



Being an entrepreneur is associated with starting a business, but this is a very loose application of a term that has a rich history and a much more significant meaning. The term “entrepreneur” originated in French economics as early as the 17th and 18th centuries. In French, it means someone who “undertakes”. In the 20th century, the economist most closely associated with the term was Joseph Schumpeter. He described entrepreneurs as the innovators who drive the “creative-destructive” process of capitalism. In his words, “the function of entrepreneurs is to reform or revolutionize the pattern of production.” Schumpeter’s entrepreneurs are the change agents in the economy, by creating new ways of doing things, they move the economy forward.

Becoming an entrepreneur potentially offers benefits to the young person through deepening their human capital attributes  such self-reliance, skill development etc. and increasing their levels of happiness related with personal achievements. It also offers societal benefits. Entrepreneurs create jobs, increase innovation, raise competition and are responsive to changing economic opportunities and trends. Entrepreneurship offers other positive externalities. A young person setting up a new business may  act as a role model for other young people. Indeed, one of the reasons why youth entrepreneurship is so attractive is that it offers an indigenous solution to economic disadvantage.

The decision to become selfemployed is complex and determined by different micro and macro factors. Furthermore, social and individual attitudes shape the perception and feasibility of entrepreneurship as a career option.

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Youth entrepreneurship should not be seen as a ‘mass’ solution which can cure the youth unemployment crisis or solve all society’s social ills, because only a minority of young people will have the right skills and attitudes to become entrepreneurs. However, there is no doubt that allowing young people to better exploit their talents and supporting them in transforming their creative ideas into business plans has a wide number of potential benefits.

 

Youth entrepreneurship also promotes resilience among young people, encouraging them to find new, alternative solutions in a changing market.

 

Furthermore, a young person setting up a new business may have a positive ‘demonstration’ effect, showing by example that with hard work and good ideas it is possible to be successful. This may be of particular importance in deprived communities with marginalised youth where setting up a new business may be a mechanism for helping disadvantaged people to escape the vicious circle of social exclusion.
Youth entrepreneurship offers innovative solutions for economic growth among young people.  Youth enterprise initiatives are still relatively new to global development. Thus targeted tax and business incentives are highly important to supporting young entrepreneurs in scaling their businesses. However, there is one encouraging trend which policymakers should seize upon: young people’s businesses that do survive have on average more growth potential than those of older entrepreneurs. Among businesses that survived three years, according to surveys, those run by people under 30 years old had an average growth rate of 206%—nearly double the growth rate of businesses run by those over 40.

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The young entrepreneurs hold the key to solving youth unemployment problem, but we must help them to achieve their potential. Their key concerns are as follows:

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Positive mainstream views about entrepreneurship are needed to attract young people thus support towards entrepreneurship culture is imporant.

 

Entrepreneurship gives young people an opportunity to take the initiative in creating their own employment, and to define their work so that it matches their own skills and interests. Encouraging entrepreneurship in young people is even  more important way of harnessing their enthusiasm, energy and ambition to contribute to economic development. If their initiative is successful, they can then contribute benefits more widely to society. It is generally accepted that entrepreneurs create jobs, increase innovation, raise competition and are responsive to changing economic opportunities and trends. Young entrepreneurs also can also act as role models for their peers and, by their own company’s operations or more specifically through mentoring, encourage others to follow their example.



Some Recommendations to foster entrepreneurship among youth:

● Start early. Influence the discussion among young people while they are still in school or  at university. Create a positive narrative around entrepreneurship to help engage young people from an early age.
● Emphasize entrepreneurial education and skills development for the 21st century.
● Target and educate unemployed youth about the opportunities entrepreneurship can bring them.
● Promote entrepreneurship opportunities through an integrated approach, combining government and industry in particular.
● Encourage investment in start-ups by offering tax benefits.
● Invest in initiatives that develop market leadership in specific areas for the country or region, targeting and enabling young entrepreneurs to flourish at the start-up stage, and that promote the value of entrepreneurship to society and in particular youth.
● Support enterprise collaboration, and procurement opportunities, between high-growth young entrepreneurial firms and market-leading corporates.
● Promote organizations and environments that will positively influence public perception of entrepreneurship.
● This seems to indicate that policies and initiatives to promote youth entrepreneurship should be targeted at those with the right skills, values and ideas in order to maximise the results of a public investment.
● Entrepreneurial education and skills should be provided to help this group better understand the risks associated with entrepreneurship and to face the challenges of the market. In this framework, promoting youth entrepreneurship has recently become a priority for stakeholders  in addressing youth unemployment to create employment and ensure sustainable growth.

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Contact making event “EntrepreneurShip – Sailing to Success” was implemented within the European Union program Erasmus+ KA1 and Latvian partner was Non - Governmental Organization ‘’Donum Animus’’. Erasmus+ KA1 program provides opportunities for individuals to improve their skills, enhance their employability and gain cultural awareness. Beneficiaries are able to spend a period of time in another participating country gaining valuable experience of life, study and work with the aim of increasing the opportunities available to them in the future. Key Action 1 is the largest action in Erasmus+ with focus on increasing mobility and skills.

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