David Halabisky, Economist LEED Division, OECD Entrepreneurial Activities in Europe: Youth Entrepreneurship Partnership between Local Economic and Employment Development (LEED) Division of the OECD and the European Commission, DG Employment, Social Affairs and Inclusion David Halabisky, Economist LEED Division, OECD

Introduction Annual unemployment rates in EU, 2001 to 2010 Source: Eurostat, “Labour Force Survey”

Self employment rates Self-employment rates by country and age, 2010 *US data are for 2009 Source: Data for European Union Member States and European Average from Eurostat, “Labour Force Survey” (Data for 15-24 age group not available for Estonia, Latvia, Luxembourg and Malta); Data for the United States from the Bureau of Labour Statistics, “Labour Force Statistics from the Current Population Survey”; and Data for Canada from Statistics Canada, “Labour Force Survey”.

Entrepreneurship rates Proportion of youth and adults by stage of entrepreneurial activity and business ownership, EU and US Note: Error bars show standard error. Source: Global Entrepreneurship Monitor 2007–11, Adult Population Survey

Barriers to youth entrepreneurship Lack of awareness of potential for entrepreneurship among role models results in a lack of encouragement or even negative social attitudes Education and training programmes generally do not do enough to nurture entrepreneurial attitudes and skills Lack of prior work and entrepreneurship experience is a major determinant to business start-up and entrepreneurship performance Fewer financial resources and difficulty obtaining external finance, including debt finance, hampers business start-up Limited business networks and business-related social capital have consequences for business start-up and obtaining legitimacy Market barriers, including a bias in financial markets away from supporting youth-owned businesses and ‘discrimination’ in product markets

Policy responses Develop entrepreneurship skills Goal: overcome the of lack of entrepreneurial knowledge, skills and attitudes and the lack of prior work and entrepreneurship experience Approach: develop entrepreneurship skills within education system and through training outside of the education system Example: Think Big, United Kingdom Provide information, advice, coaching and mentoring Goal: provide ‘soft’ support such as information, advice, coaching and mentoring to overcome knowledge gaps Approach: disseminate information, provide advice, counselling, coaching and mentoring services Example: Prince’s Scottish Youth Business Trust, Scotland; Project GATE (Growing America Through Entrepreneurship), United States

Policy responses, continued Provide financial support Goal: provide financial support to overcome lack of initial capital and difficulty in obtaining finance Approach: provide finances for living expenses and working capital, as well as micro-financing and non-traditional start-up financing programmes Example: DEFi jeunes, France Develop infrastructure for entrepreneurship Goal: secure a supportive infrastructure to overcome barriers associated with lack of networks, skills, finance for premises and access to associated start-up support Approach: support youth business networks and associations, and business incubators Example: Garage Hamburg , Germany

Conclusions and recommendations Youth entrepreneurship is unlikely to be a panacea for solving the youth unemployment problem but it can be a part of the response There is some evidence of success in helping young people move into self-employment from unemployment, although the evidence base is relatively small and generally lacks rigour Evaluation evidence should be bolstered so that policymakers can focus on approaches that work To maximise effectiveness and efficiency, policy should: Target resources on young people with the best chance of success, Provide sufficient support to allow them to start businesses outside of low entry barrier but high competition sectors, and Provide integrated packages of complementary support rather than one-shot instruments

Capacity Building Seminar Trento, Italy 27-29 June 2012

Capacity Building Seminar Theme is financing business start-ups for under-represented groups Three themes: Effective policy tools to facilitate access to finance for start-ups Complementing financial support with other support to develop entrepreneurial skills Understanding good governance Programme will include keynote speakers and group work Participating will bring you into a network of senior policy makers and provides access to experts and events