EY ROMANIA

  |  08.07.2013

Entrepreneurship: the key to avoiding a lost generation

Worldwide, 13% of young people, meaning 75 million people, are unemployed and many are also under-employed relative to their training and capabilities - according to the International Labour Organisation

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entrepreneurship

Youth unemployment affects the world's largest economies (G20 countries) and, equally, Romania. Moreover, it is expected that the rate of youth unemployment will rise in the next 5 years.

 

In the most affected countries, the rate of youth unemployment has even exceeded 30%. According to The Economist the actual rate is much higher, estimating that worldwide there are more than 290 million young people neither working nor studying.

 

There are no solutions with overnight results, but great hope lies in entrepreneurs. Entrepreneurs and SMEs are the engines that generate significant employment and economic growth. According to the report Do SMEs create more and better jobs?, employees of SMEs (with fewer than 250 employees) represent, on average, two thirds of the number of employees in G20 countries. These firms create jobs at a double rate compared with larger companies and are more likely to recruit previously unemployed people.

 

In addition to supporting entrepreneurship as an engine for creating jobs, the more young people become entrepreneurs, the lower the rate of youth unemployment will be. Given the two levers that have to be activated to reduce unemployment, both based on entrepreneurs, providing the most appropriate tools and adequate help to entrepreneurs is critical in avoiding the sacrifice of the next generation of young people.

 

Entrepreneurs identified 5 key imperatives for action to support their work, according to the EY study Avoiding a lost generation, which surveyed 1,500 entrepreneurs from the G20 countries, of which 1,000 aged under 40:

1. Expand the choice of funding alternatives for entrepreneurs

2. Increase mentoring and broader support from experienced entrepreneurs

3. Change the culture to tolerate failure

4. Clearly target incentives

5. Reduce red tape and excessive taxation

 

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