World Bank estimations indicate that there will be three billion people in the world under 25 by the year 2015. While the youth population grew by 13.2 per cent between 1995 and 2005, employment among young people grew by only 3.8 per cent to reach 548 million. According to an ILO study (ILO/06/48), of the 1.1 billion young people aged 15 to 24 worldwide, one out of three is either seeking but unable to find work, has given up the job search entirely or is working but living on less than US$2 a day. Statistics also indicate substantial differences between regions and cultures. Youth unemployment is lowest in East Asia with below 10 per cent, and highest in the Middle East and North Africa with 25 per cent (2003).

Becoming self-employed is for many young people not as much a question of opportunity than it is a question of necessity. The Global Entrepreneurship Monitor (GEM) concludes that youth in low-income and developing countries tends to become engaged in business driven by necessities, such as lack of other employment opportunities and the need to contribute to the household income. Globally improving education along with technological opportunities such as ICT, governments around the world increasingly understand the potentials their youth offers for innovation and economic development.

Discussing local specifics on global level

Starting in late 2008, the infoDev incubator initiative has been supporting three working groups on women, youth, and high-growth IT enterprises bringing together incubation experts from all over the world. For the working group Youth and Incubation, the main question to be answered first was how business incubation can help developing youth entrepreneurship. For answering this question, the working group decided to focus on a needs and situation analysis, to learn about good practice and existing instruments of incubation of young entrepreneurs, and to jointly identify and start actions.

More than 50 members from 30 countries have joined the working group since its launch in late 2008, indicating the high relevance of the subject. Dr. Radu Big, coordinator of the working group and general director at CDIMM Maramures in Baia Mare (Romania) since its start, says about the first year of the group that “acting on global scale you have to have flexibility, adaptability and a vision of the phenomena you discuss. First, we all had to learn how to communicate in a global working group.” According to Radu Big, who also promotes youth entrepreneurship at Baia Mare North University, there is no single recipe for successful promotion of youth entrepreneurship. “We are living in one world but we are over 6 billion individuals. There are a lot of different concepts and understandings of “Youth”, and so are the challenges to youth entrepreneurship.”

“You can turn being young into an advantage”

In fact, internationally there is no standard for the term “Youth”. Each country has established its own definition of youth based on different cultural, social and economic influences and backgrounds. Social and cultural settings do not only define the term “Youth” but form the attitude towards youth entrepreneurship. “In Africa, business is considered to be a big white elephant and not a toy for young people. Business for people in Africa means big business. In India the situation is much different, where young people are encouraged by their communities to start small enterprises.” says Mr. Rajeev Aggarwal, a native Indian and director of TBIF incubator in Kigali (Rwanda), who has been facilitating the working group in Africa.

Besides the overall social and cultural context, a situation analysis conducted by the working group in 2009 revealed that limited experiences in starting and managing a business, the lack of supportive networks and social capital, limited availability of financing but also an overall low level of awareness on the opportunities and benefits of self-employment are major barriers for youth entrepreneurship. “Young people just form their life objectives and visions. Starting your own business is a tremendous step and commitment. Helping young people to become entrepreneurs first of all means helping them to understand what they want to achieve in life.” adds Philip Hostert, project manager at SPARK International, in the discussion and break-out session on youth entrepreneurship and incubation at infoDev’s Global Forum in Florianopolis (Brazil) in 2009.

“We should not only look at barriers. Being young can be an advantage, also in the perception of people. Young people have energy and fresh ideas, and they quite often have the willingness and commitment to succeed” argues Steliana Economu, a young entrepreneur from Romania and founder of Ithaca Journey. In fact, the study conducted by the working group along with the discussions indicate, that support systems for young entrepreneurs exist in most countries, and that the worldwide improvements in the education sector are supportive for youth entrepreneurship and innovation.

In order to address the barriers and to make use of the opportunities, the global working group recommends improving legal frameworks and support programs for young entrepreneurs such as tax exemptions, to raise awareness about the opportunities of entrepreneurship among young people but also among policy-makers and further stakeholders, and to support and strengthen youth entrepreneurship and mentor networks. Furthermore, the global working group recommends integrating entrepreneurship into higher and vocational education curriculums, improving access to finance but also to markets, and to build up capacities on both youth and youth support levels.

How can business incubation contribute to youth entrepreneurship?

One of the key questions the global working group aimed to answer was the role and status of business incubation in youth entrepreneurship development today. “Most incubators work with young entrepreneurs here in Asia but very few do really focus on youth entrepreneurship” says Mr. Annuar Mohd Saffar, executive director at Kulim Hi-Tech Park in Malaysia and facilitator of the working group in Asia. In fact, the research conducted by the working group indicates that business incubation tools specifically addressing the needs of young entrepreneurs are rare.

“Besides legal support, capacity building and finance, young people need role models and social capital. Incubators can become network hubs for young people. Success stories and their exposure can change attitudes and perceptions, and can build up self-confidence. Incubators can play an important role here” says Radu Big. Rajeev Aggarwal adds that “incubators can also help connecting young entrepreneurs to the international business world.” Radu Ticiu, director at Timisoara Software Incubator in Romania, focuses on collaboration with the education sector. “Strategically, we intend to orient our attention to younger target groups like high school students. An early start in developing an entrepreneurial mindset is definitely needed, and only a common approach of different types of organization can lead to success.” 

When discussing the uniqueness of youth business incubation, Mr. Michel Richter, co-director of SPARK International, sees the special role of incubation in providing coherent start-up support packages to young people. “Generally speaking, young entrepreneurs would need the same sort of incubation services but with much more guidance and mentoring. We have to prepare a coherent package of business development services, and not just one-time trainings or grants. This can be achieved by connecting competitive elements such as business plan competitions with capacity building in for example finance or marketing, and on top of that mentoring and coaching as well as loans and incubation space.” Since 2007, SPARK International has established 7 business start-up centres (BSC) and business incubators in Western Balkans countries, in the Middle East and in Africa. Asked about regional specifics Mr. Richter adds that "in general the mechanisms and phenomenas are very similar. Cultural differences and other factors such as literacy rate require adaptation of these mechanisms."

Mr. Khalil Shiha, general director of PARC Agricultural Development Association in Palestine, confirms this approach. “Starting small income generating projects for young people accompanied by intensive training and extension services programs is effective, but providing training courses only is seen as a luxury.” Yet, incubators have to demonstrate the value they provide to young people. According to Ms. Sandra Ramirez of CREMAE in Medellin (Colombia) “young people tend to be less ready for the time-consuming incubation process. Quite often, young entrepreneurs do not perceive the value of the business incubation process, arrive unprepared at the incubator and look for financing only. It is very important to demonstrate the benefits of business support and incubation.”

The working group recommends the following key areas for incubators to take action:

• Providing incubation and business development tools designed to address the specific needs of young entrepreneurs;
• Providing social capital and market access in form of contacts and networks, also internationally;
• Collaborating with universities and vocational schools and helping to integrate entrepreneurship education into the education systems;
• Improving access to finance through micro-credit programs, angel investors, and fundraising;
• Raising awareness and advocating the interests and needs of young entrepreneurs through events, publication of good practice and success stories;
• Building up capacities and helping young entrepreneurs finding their life objectives;
• Demonstrating the value of business incubation to young people.

What the global working group can do

Based on the information generated by the group so far and the discussions the group could stimulate during its first year, the following areas where identified as most relevant for further joint action:

• Tools and good practice: Disseminating effective tools for youth business incubation, including also good practice and success stories, adopting extending existing incubation tools and trainings to youth specifics;
• Advocacy and awareness: Jointly starting advocacy towards governments and supporting public awareness on the benefits of youth business incubation;
• Research and exchange: Continuing studies and discussions on specific needs and good practice solutions;
• Outreach: Outreach to organizations worldwide dealing with youth entrepreneurship. Improving outreach to members by using social networking media.

One of the successful activities the working group plans to continue in the future is the Y2i Youth to Innovation Contest. The Y2i contest aims to support innovative thinking and acting among young people in both entrepreneurship and business incubation. It also helps generating and disseminating good practice and success stories. Concentrating on Eastern Europe and Central Asia in 2009, the contest received 21 applications from 8 countries including Armenia, Belarus, Georgia, Kazakhstan, FYRO Macedonia, Moldova, Romania, and the Russian Federation. The working group plans to bring the next contest in 2011 to the global level and to allow participation from all infoDev global incubator network regions.

Learn more

• To learn more about infoDev's global working groups, please visit iDisc: /workgroups/
  
• For more information about the y2i contest launch in 2009, please visit: http://www.ecabit.org/?p=227 
• For more information about the y2i 2009 contest winners, please visit: /en/Article.349.html
• For the report of the steering committee meeting of the working group in Baia Mare (Romania) 15 July 2009, please visit: /en/Article.399.html
• For a summary of the working group's survey on challenges for youth entrepreneurship and incubation, please visit: /en/Publication.394.html
• For downloading the protocol of the break-out session "Youth entrepreneurship and Innovation" (infoDev Global Forum, Florianopolis, Brazil, Oct 2009), please visit idisc: /en/Publication.395.html
• For downloading the presentation of Dr. Radu Big's presentation at the break-out session "Youth entrepreneurship and Innovation" (infoDev Global Forum, Florianopolis, Brazil, Oct 2009), please visit idisc: /en/Publication.396.html
• The newsletter #1 of the working group (Feb 2009) can be found here: /en/Article.38850.html