Funding and Ecosystems Key to Young Entrepreneurs
A new report from EY has identified a collection of recommendations for policymakers to combat persistently high youth unemployment rates through entrepreneurial growth. The latest Avoiding a Lost Generation report, put together in collaboration with the G20 Young Entrepreneurs’ Alliance, identifies and analyzes the different youth unemployment issues faced by countries across the G20 and provides 10 key recommendations – on access to funding, tax and regulation and entrepreneurial culture and ecosystems.
Access to Funding:
- Create funding mechanisms, either government run or government backed, that make mentorship and financial education a condition of funding.
- Create strong relationships, and provide incentives, with venture capitalists, incubators and business angels to develop or create initiatives that enable alternative sources of capital.
- Sponsor start-up growth with low-cost funding for targeted groups.
- Create a new class of loan for small businesses and young entrepreneurial firms that offer targeted funding to meet expansion capital needs.
Tax and Regulation:
- Encourage investment in start-ups by offering tax benefits.
- Encourage top international talent by changing visa rules and offering funding support.
- Simplify and streamline tax administration to ease administrative burdens on young entrepreneurs.
Entrepreneurial Culture and Ecosystems
- Create a positive narrative around entrepreneurship to help engage young people from an early age.
- Encourage and foster hubs, incubators, accelerators and networks to bring relevant talent together.
- Create the foundation for a regional entrepreneurial ecosystem to flourish.
“Fostering a vibrant entrepreneurial ecosystem is one of the best ways to deal with youth unemployment, thanks to the large number of jobs that entrepreneurs create and the path to employment and fulfillment that starting a business can offer young people,” said Maria Pinelli, EY’s Global Vice Chair of Strategic Growth Markets. “We’re also seeing great success in countries where governments have worked with business and academia to create entrepreneurial hubs and run initiatives to encourage a broader acceptance and celebration of entrepreneurial spirit and endeavor.”
The report builds on an the April 2013 Avoiding a Lost Generation report from EY that identified five imperatives for action:
- Expand the choice of funding alternatives
- Increase mentoring and broader support
- Change the culture to tolerate failure
- Target and speed up incentives
- Reduce red tape and excessive taxation