A Problem with a Gift in Its Hands
I have always liked the story of the CEO who sends two shoe salesmen to Africa. When they report back, one says “Bad news, they don’t wear shoes here”. The other reports excitedly “Wonderful news boss, they have no shoes”.
One of the worst features of this recession is the sharp rise in youth unemployment worldwide. In the U.S., close to half of the young people were unemployed this summer. UK statistics released last month suggest that 1 in 5 of its 16-24 year olds are unemployed. The youth unemployment rate in Nigeria is 60 to 70 percent. What can we do with this huge amount of spare capacity in the world economy? With so many in a post-Google world less skeptical of the marketplace as a place to change the world, I see nothing but opportunity. I think our task is not to find them jobs but help them make them. We should be unleashing the economic potential of these potential young job creators many of whom are seeking an opportunity to launch their ideas.
Not long ago, a panel of experts on youth and employment from Ghana, Kenya, Mali, and Colombia met at the World Bank. Some leaders suggested specific targeted interventions related to youth training and creating incentives for firms to hire them, while others pointed out that despite such efforts, the crisis of youth unemployment will continue. Youth unemployment is certainly a multi-dimensional problem that requires strategies for education, employment regulation and wages. But leaders must not overlook what is perhaps the most important dimension: entrepreneurship or the ability of the young to create jobs.
If you think I am being naïve in assuming that 16-24 year olds in, for example, Sub-Saharan Africa understand the entrepreneurial culture, listen to the two Africans who were my fellow panelists at a State Department briefing last week. Both Amadou “Gallo” Fall from Senegal and successful businessman Aloy Chife from Ghana told a gathering of the new US Ambassadors to African nations that they tweet and talk about the same cultural phenomena as their counterparts in Europe and America.
Unfortunately, it seems like until recently leaders have missed the opportunity to discuss in depth this important component of the solution to unemployment and development in general. As Carl Schramm, President of the Kauffman Foundation, has argued, new firms do not appear as a natural by-product of having free-market institutions. They are the result of an entrepreneurial system, a concept that unfortunately has not had a place in the traditional development models.
Yet, while we have yet to see a call for an “Entrepreneurs Corps” (similar to the idea of a Civilian Response Corps) as part of our foreign aid efforts, we are increasingly seeing entrepreneurship as a major, explicit component of development initiatives. At the fifth annual meeting of the Clinton Global Initiative (CGI) last month in New York, members committed themselves to work toward innovative solutions in four global challenge areas - energy and climate change, education, global health, and economic empowerment. One of the innovative solutions will come from The Network for Teaching Entrepreneurship which committed to supporting young entrepreneurs from low-income communities across the U.S. interested in creating environmentally friendly businesses. NFTE will create a monetary award for the best "green" business plan at 12 regional and national competitions. Winners will also receive mentorship from top business leaders to transform their commercial plans into viable enterprises. In South Africa, the SOUL Foundation will rehabilitate 42 miles of the polluted Jukskei River by putting waterway management in the hands of small entrepreneurs who will receive training on how to maintain the river and create jobs through community enterprises. The Soul of Haiti Foundation will empower selected Haitian communities to create their own success through relationships with Ireland's leading and most successful entrepreneurs.
CMEA Capital in turn committed to invest in technology entrepreneurs and innovators, while the Arthur Guinness Fund, working with the newly formed Youth Business America, will lend seed capital to aspiring young entrepreneurs without access to funds so they can start new businesses. The Omidyar Network, the philanthropic investment firm established by eBay founder Pierre Omidyar, made a three-year, $30 million commitment to support global entrepreneurship in India and Sub-Saharan Africa. The Omidyar Network aims to improve the quality of life for people living in extreme poverty by investing in high-impact entrepreneurial ventures, particularly those providing goods and services to the base of the pyramid.
Overall, this year’s CGI commitments amount to $5.4 billion invested in or loaned to small- and medium-sized enterprises. Together, the 2009 commitments, once fully implemented, are expected to yield, among other benefits, 79 million people generating sustainable income through self-employment or new job opportunities.
The Kauffman Foundation offers another high-impact initiative: Global Entrepreneurship Week. This global movement promises to unleash entrepreneurial potential around the world, inspired by one week of thousands of activities each November. In the words of Carl Schramm, who conceived the idea with British Prime Minister Gordon Brown, the message of Global Entrepreneurship Week is this: “I can make my own life better. I can expand my human dignity, and I can take my fellow citizens along into the future that we can create.” Last year, this campaign involved nearly 10,000 organizations which planned more than 25,000 events attended by more than 3 million participants around the world. For example, the Peace Corps in Paraguay organized 180 different activities to brainstorm entrepreneurial solutions to local problems.
This year’s Global Entrepreneurship Week activities will run from November 16 – 22 and are expected to involve millions of young people in over 90 countries across six continents. Nations are highlighting the activities focusing on mentoring, innovation, networking and the environment. The Global Clean Tech Ideas Competition will comb the world for the best green innovators. Mentoring Madness, sponsored by NYSE Euronext, will offer advice to aspiring bootstrap entrepreneurs. A Global Innovation Tournament will challenge students around the world to compete with each other over a common global problem, and Speednetwork the Globe will build hundreds of local networks to help bring ideas to life.
The creative genius among the young is perhaps one of the least-tapped resources in many economies. Given the opportunity to explore entrepreneurship as a career path, proper guidance, access to credit and a business-friendly environment, young people can unleash their potential and create social, economic and environmental value. I can’t think of a better development tool than teaching and enabling entrepreneurship.
Jonathan Ortmans is president of the Public Forum Institute,
a non-partisan organization dedicated to fostering dialogue on important policy issues. In this capacity,
he leads the Policy Dialogue on Entrepreneurship, focused on public policies to promote entrepreneurship in the U.S. and around the world. In addition, he serves as a senior fellow at the Kauffman Foundation.