Governments have renewed their commitment to support young people in finding pathways into the labour force following the COVID-19 pandemic, including through increased investment in entrepreneurship schemes. These investments can be effective if there is a positive awareness about entrepreneurship among young people. This can be fostered in many ways, including through the use of role models, outreach campaigns and events to showcase the range of possibilities in entrepreneurship. Many countries are also promoting entrepreneurship through education.
Youth in inclusive entrepreneurship
Young people are the key to solving the problems of today and tomorrow, and are leading innovative practices in the digital and green transitions. While many young people are attracted to entrepreneurship for its flexibility, independence and agency, relatively few young people pursue it as a career. Governments can do more to help young people realise their entrepreneurial potential and support the next generation of entrepreneurs.
Key messages
Youth entrepreneurship support schemes seek to help young people overcome their lack of experience and access to resources. This includes building entrepreneurship and business management skills through training, coaching and mentoring, and bootcamps, as well as offering various financial supports such as small grants and loans. While it can be beneficial to deliver specific supports to the right entrepreneur at the right time, evaluation evidence suggests that the impact is often greater when measures are packaged together to offer some training and coaching along with funding. Another important element of support packages is networking.
The success of youth entrepreneurship policies often depends on reaching the targeted young people and their interest in using the available support. Governments can achieve greater engagement with potential young entrepreneurs by working with youth organisations to ensure that support schemes are attractive and to leverage their communication channels. It can also be effective to deliver support through partnerships with non-government actors that have experience working with young entrepreneurs.
How are we helping policy makers untap the entrepreneurial potential of youth at the OECD?
At the OECD, we:
- Monitor trends and policy developments in the area of youth entrepreneurship;
- Offer policy analysis and advice on policies and programmes that support youth in business creation and self-employment through in-depth reports, policy briefs, workshops, webinars, blogs and rapid policy assessments; and
- Support national, regional and local governments in strengthening the design and implementation of tailored entrepreneurship support for youth with tailored analysis and policy recommendations.
The need to untap youth entrepreneurial potential
High ambition, limited action
Entrepreneurship holds potential for young people but there is a substantial gap between their ambitions and actions. Surveys continue to show a high level of interest in entrepreneurship among young people – 39% of young people (15-30 years old) in the European Union would prefer being self-employed to working as an employee yet only 7% of were self-employed in 2022. Moreover, young women are a strong source of untapped entrepreneurial potential. In 2022, young men (20-29 years old) in the EU were about 1.6 times more likely to be self-employed than young women. The lower rates of youth self-employment are in part due to the lower levels of resources and experience as well as the greater challenges faced by youth entrepreneurs, particularly in accessing finance.
Millions of "missing" youth entrepreneurs
Despite high levels of entrepreneurial interest and intention, many youth do not take the plunge into entrepreneurship, leading to missed opportunities for innovation and job creation. If youth (18-30 years old) were as active in entrepreneurship as core-age men (30-49 years old), there would be an additional 3.6 million more young entrepreneurs across OECD countries. Youth account for about 13% of all “missing” entrepreneurs in OECD countries.
Quality is key
While start-up rates vary across OECD countries, young people are more likely to be starting a new business than older adults. About 9% of young people in the OECD were working on a start-up relative to an overall rate of 8% between 2018-22. Young people are also active in managing new businesses with a share of 6% in the period 2018-22, which was above the overall population (5%). Yet, young people are much less likely than adults to be operating an established business. The large drop-off between ownership of a new business and an established business suggest that young entrepreneurs often struggle to develop their business into one that will be a relatively stable source of income and perhaps create jobs for others.
The role of youth
Young entrepreneurs have a huge role to play as slow productivity growth, climate change, demographic change and the digital transition come together in a perfect storm for many economies. The new OECD-EU “Missing Entrepreneurs” report finds that if youth (18-29 years old) participated in early-stage entrepreneurship at the same rate as “core age” men (30-49 years old), there would be an additional 3.6 million “missing youth entrepreneurs” in OECD countries. This accounts for about 11% of the total number of “missing entrepreneurs” in the OECD as young people face a range of barriers to success. David Halabisky from the OECD and Anita Tiessen, the CEO of Youth Business International, unwrap issues around money, mindset and motivation for young people in the world of business.
SPOTLIGHT: Unleashing the future of youth entrepreneurship policy
The OECD also manages the Youth Entrepreneurship Policy Academy (YEPA) in collaboration with the European Commission, which is a peer-learning network of more than 150 participants, including policymakers, youth entrepreneurship networks and organisations, social entrepreneurship networks, programme managers and researchers. The aim of YEPA is to strengthen youth entrepreneurship policies and programmes by raising knowledge about the barriers faced by young people in entrepreneurship and facilitating exchange among YEPA participants on “what works” in youth entrepreneurship policy.
Related publications
Entrepreneurship 360
Fostering entrepreneurial intention and motivation among young people is key to developing the pipeline of future entrepreneurs. Activities in schools can help shape the attitudes, skills and knowledge youth will need for entrepreneurship, but schools and teachers need the right frameworks and support. Through the Entrepreneurship 360 project, the OECD and the European Commission investigated how government policy makers, school managers and school teachers can strengthen entrepreneurship education and training in schools.
Get in touch
For further information, please contact David Halabisky or Helen Shymanski
David Halabisky, Project co-ordinator
Helen Shymanski, Policy Analyst