The Entrepreneurship Answer to Youth Unemployment by Amy RosenAt their October meeting, assembled European trade leaders got a stern warning from Nobel Peace Prize laureate Aung San Suu Kyi. She told them, “Youth unemployment is a time bomb.” The same day, Pope Francis called youth unemployment one of “…the most serious of the evils that afflict the world these days…” In Europe, the rising tide of idle young people has governments in near panic. In Spain, an estimated 56% of those younger than 26 years old are without jobs. In Greece, that number is more than 62%. Bernadette Segol, the chief of the European Trade Union Confederation, told her colleagues, “Twenty-seven million [young] unemployed in Europe see no light at the end of the tunnel, only the light of a high speed train ready to run them over.” Elsewhere, high unemployment rates among young people are seen as the powder keg which helped spark Arab Spring uprisings and ongoing unrest in the Middle East. Leaders and investors there are rightly worried too. In the U.S., the situation is better but by no means good. A report issued this month pegs the U.S. out-of-school yet out-of-work population at more than six million – or about 15% of our workforce. According to the latest U.S. employment statistics, more than 22% of Americans between 16 and 19 are not working. And those numbers are growing. Earlier this year Joseph Brusuelas, a Senior Economist at Bloomberg, estimated the U.S. youth unemployment pinch will cost us $18 billion over the next ten years. Brusuelas also said, “That really underestimates the true nature of the problem. My gut tells me that (the cost is) much larger.” While Europe is rushing an $11 billion youth employment spending package to action, no similar spending solution is under credible contemplation in the States. And even if it were, a government spending package alone won’t put pay checks in the pockets of young people.
If we’re going to succeed in combatting what some are calling a ‘failure to launch,’ we need places for them to land. Finding and growing those options will require a great many programs, policies, investments and ideas.A popular idea has been focusing on and incentivizing education in so-called STEM fields – science, technology, engineering and math. Preparing today’s students for where we think the jobs will be in the future. It’s a good start and it’s logical that learning those key job skills will help make some students more suited for some future jobs. But we can do more. While we’re teaching people to be better employees, we should also invest in teaching them the mindset, coupled with the skills, to be innovators and entrepreneurs. Developing the ability to recognize opportunity and giving young people the tools to capitalize on those opportunities empowers them to take ownership of their future in ways which directly link education to real-world success. Best of all, we know it works. A survey of graduates from the Network for Teaching Entrepreneurship (NFTE) programs around the globe shows that those who received entrepreneurship training stayed in school longer, were employed more and made more money than their counterparts. In the ten largest cities where NFTE training is offered, high school graduation rates are between 57-78%. But in those same cities, 89% of those who had entrepreneurship training graduate. And those who have completed entrepreneurship training report earn 50% more than the national average – $38,000 annually as compared to $24,000. In other words, putting a young person to work does not mean finding them a job. In some cases, with the right investment in entrepreneurship and the encouragement to succeed, young people will create their own jobs and, in many cases, hire others. They can and will invent the next big things that change lives, lift up communities and grow economies. Youth unemployment is a global problem and the social, political and economic costs of a continued crisis will be extreme. Expanding programs which plant and nurture the seeds of success through experiential entrepreneurship training – preparing those who will create the companies that hire STEM graduates and others – will help put young people to work. And empowered youth who can seize their own opportunities are more likely to see a bright light as opportunity and not, as the European trade chief put it, a train.
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