5 ways governments can unleash the power of young entrepreneurs

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum. Author: James Dacosta, Director, Hult Prize Foundation

---

Meeting the sustainable development goals (SDGs), addressing youth unemployment and promoting entrepreneurship are all top issues on global and national agendas. But do governments have a plan to address them in a cohesive way?

There is currently a $2.5 trillion funding gap standing between us and the realization of the SDGs, according to the United Nations Conference on Trade and Development. At the same time, one in five people globally aged between 15 and 34 are either unemployed, not engaged in formal education or not involved in training. In some countries it’s as high as 60%.

But this presents an opportunity as well as a challenge. Could this spare capacity of youthful talent be harnessed to plug the gap in market need?

International organisations have already cottoned on to the fact that youth entrepreneurship is central to the process of solving the SDGs. This was made clear at this year’s UN Global Goals Week by the number of newly created youth-led initiatives such as the UN Foundation’s Social Good Summit, the Plus Social Good community or the Gates Foundation GoalKeepers.

Despite this, governments are still lagging behind.

Here are five concrete steps I believe governments can and should take to create positive change through youth entrepreneurship.

Two of the most powerful tools to spark entrepreneurship and crowdsource innovation are competitions and prizes. These can mobilise large groups to focus on specific problems – such as the X-Prize or the £10m Longitude Prize, which challenges teams to help solve the global problem of antibiotic resistance. Although no-one is yet to win the Longitude Prize, several of the 250 registered teams from elite research institutes and universities are on track to do so.

As the largest programme for students coming out of university, the Hult Prize Foundation has done the same in the social impact space. It inspires 200,000 students from over 100 countries each year to build businesses that solve social issues, and was coined the Nobel Prize for students by former US president Bill Clinton. Or take One Young World, a global forum for young leaders. One Young World has created Lead2030, the first coalition of global businesses working together to support youth-led innovation directed towards the SDGs. Lead2030 provides $500,000 to the most impactful youth-led initiatives that are working towards a selected Sustainable Development Goal.

Prizes are not the whole answer, because they ultimately mean a small group receives a disproportionate amount of support – but they are a great first step. Regardless, whether governments create their own prize programmes or harness existing ones, they are a proven way to begin building an entrepreneurship pipeline.

The promotion of entrepreneurship must be grounded in local contexts and the problems it is required to solve. Policy in this area also needs to be considered in the context of young people’s lives today, and what is on their mind – as for many young people this means pursuing impact as well as profit.

The spending power of youth is also going to have a significant impact. Over the next 30 years, in the US alone $30 trillion of wealth will be transferred from baby boomers to millennials and generation Z. These generations are making higher social demands of companies, and they have a greater awareness of planetary issues and a strong desire to make positive changes in the world.

Policies and initiatives are rarely successful if the decision-making process does not engage the end recipient. Under-30s make up 51% of the global population but only 2% of them are members of parliament. In the private sector, the average age of the board member of S&P 500 companies is 63 (with an upward trend), and less than 1% of them are under the age of 40. This is a concerning pattern, not least for the success of youth focused policy. As the Arab Spring showed, young people have an insatiable appetite for engagement, and not engaging them can have disastrous consequences.

The Global Shapers, an initiative of the World Economic Forum, is an example of how to promote the interests of youth in the right way. Global Shapers is a network of young people driving dialogue, action and change. Shapers also attend Forum events such as Davos, where they are able to represent their generation and ensure its interests are included in the conversation.

As the late Kofi Anan said: “I am convinced more than ever that any society that does not succeed in tapping into the energy and creativity of its youth will be left behind.” World leaders are now including youth in their decision-making bodies and this is beginning to yield positive results.

While it’s a reality that most enterprises fail, robust training can help to reduce this risk. Providing training in entrepreneurship recognises that entrepreneurship itself is a distinct skillset which is increasingly demanded by corporate and political recruiters.

“Skills development reduces poverty and better equips young people to find decent jobs” (UN Secretary General, 2017). pullquote?

Policies meant to encourage youth entrepreneurship must enable young people to learn the skills necessary to pursue this path successfully.

Showcasing and creating case studies of successful youth entrepreneurs who have been supported by their government will in turn show others that this route is possible for them.

The UK government has done this through their Business is Great campaign, in which early-stage entrepreneurs are connected with more seasoned entrepreneurs to support them along their journey. It can be as simple as writing up a case study, recording a video or match-making.

As Alibaba’s founder Jack Ma said in the early days of his business: “We will make it because we are young and we never, never give up.”

The power of youth entrepreneurship is not to be underestimated as a value creator. It is now time for governments to do their part in making this a reality.