Business Magazine


Posted on the 17 August 2012 by Center For International Private Enterprise @CIPEglobal

#YouthChangeIn honor of International Youth Day, CIPE and Atlas Corps co-hosted a series of TwitterChats revolving around issues youth are facing around the world.  In the first discussion Seif El Khawanky, a youth activist from Egypt, and several winners of CIPE’s youth essay contest offered insight into the role youth can play in democracy building.  The general consensus was that youth involvement needs to go beyond participating in elections.  While voting is an integral part of democracy, as Seif stated, “change needs a sustained youth presence.”

When asked what else youth can do Risaka Mirzalina stated that in addition to participating in civil society or developing community development projects, “entrepreneurship [is another] example of democracy building.” When youth become entrepreneurs, they have a stake in the way their countries are run and contribute to economic growth, which gives them a voice that elected officials will take seriously.  Young entrepreneurs are also key to consolidating democratic gains in transitioning societies.  After all, the root of the Arab Spring was economic in nature.  Youth who enter the free market are well positioned to decrease economic exclusion and contribute to the overall development of their country.

Entrepreneurship, important though it is, will not always immediately emerge.  In many countries the institutions that govern society must be changed as they do not account for the aspirations of the youth population.  Kirsten Han lamented the fact that in Singapore, the deference given to elders has prevented many youth from striking out on their own and following their ambitions.  Another participant added to this, saying that youth are often steered “into paths that don’t fit them.”  These and other obstacles are the results of the underlying institutions of society.

During Tuesday’s chat titled, “Inclusive Growth for the Next Generation,” CIPE partners and staff in Pakistan focused their discussion on encouraging youth to participate in entrepreneurship.  Throughout the exchange, issues such as poor education and corruption were raised as barriers to youth participation.  While youth in Pakistan seem to exhibit entrepreneurial aspirations from an early age, the environment in which they grow up seems to discourage following such a path.

Majid Shabbir suggested that part of the problem is in the education system, where business schools focus too much on theoretical education as opposed to pushing students into considering an entrepreneurial career.  A recommended remedy might be to provide students with a stipend over the summer to grant them an opportunity to get their feet wet, so to say.   More than finance however, there is consensus that an established culture of mentoring could go a long way to encouraging youth to enter the market with new ideas.  Most youth are overwhelmed by the idea of starting up a business and an experienced voice to help guide them is much needed.

Mr. Shabbir also lamented that “youth are discouraged by the high level of corruption and cost of doing business.”  Such obstacles seem to arise from a system of complex regulations as another participant, Muhammad Azam Roomi, indicated that “there is a need of changing the regulatory environment.” Pakistan ranks 105th on the World Bank’s “Doing Business” survey.  According to the data it takes at least 21 days and 11% of per capita income just to register a new business.  Add to that actual start-up costs and it is easy to see why youth are not eager to become entrepreneurs. Though they may have great ideas and ambition, pressure to gain financial independence by securing  a job with a large company prevents them from assuming the burden of start their own business.

Institutional reform is the key to removing any discouraging factors.  Formal institutions such as the regulatory environment contribute to the high cost of starting a business and can be the breeding ground of corruption.  It is very easy for an official to process paperwork faster for an additional “service fee.”  Similarly, people with connections to government may be able to “grease the wheels,” creating a sense of unequal opportunity among others. Other institutions such as the education system can help push youth toward entrepreneurship and give them the necessary skills to be successful such as leadership and team work.

Informal institutions such as cultural norms are also important to change.  Instead of disparaging the possibility of failure, youth should be encouraged to learn from past mishaps and apply their experience towards the next endeavor.  Similarly misconceptions surrounding financial security and independence should be dispelled.  After all, the old adage goes, “You have to spend money to make money!” Young entrepreneurs need encouragement that they can succeed and what they are doing is worthwhile.  A mentor system, as suggested during the TwitterChat, can help with this but the support of family and friends is perhaps more essential. Only once both formal and informal institutions are changed will youth actively pursue entrepreneurial career paths.

The discussions hosted by @CIPEglobal and @atlascorps were highly engaging and allowed the voice of youth to really express the issues they face.  Although the official TwitterChat sessions have concluded, the discussion can continue as long as youth contribute.  Help continue the talk by using the hsahtag #youthchange and support the efforts of youth around the world!

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