Entrepreneurship’s Triple Payoff: Job Creation, Work Skills, and Social Impact
Caroline Jenner, CEO, JA Europe, and Asheesh Advani, CEO, JA Worldwide
Entrepreneurial ventures not only create employment opportunities around the world, but also build the skills employers seek in their employees, and help tackle local and global social issues. For this reason, we believe that every young person—regardless of geographic location, educational attainment, gender, or age—deserves access to entrepreneurship education and the benefits it brings.
Job Creation: Answering the Coming Employment Crisis
Technological advances are emerging faster than ever. New industries and automation require new skills. And the largest generation in history will enter the workforce in five years, while global youth unemployment and under-employment are on the rise and 200 million people are currently out of work. Future job prospects for Gen Z have been called “the great challenge of our time.”
Enter entrepreneurship, the little engine that could. Thirty percent of North American entrepreneurs expect to generate jobs this year, with 21% in Asia Pacific, 19% in Europe, 18% in the Americas, and 17% in Africa. According to EY, global entrepreneurs create twice the jobs of more established companies.
In the developing world, medium, small, and micro enterprises (MSMEs) account for roughly half of all employment. In India, for example, MSMEs, the second-largest employment sector, employ more than 50 million people and contribute 8% of India’s GDP. In Africa, 22% of the workforce is starting new businesses, with MSMEs representing the largest portion of formal jobs (that is, stable jobs with regular hours and salary). Meanwhile, in MENA, MSMEs account for a whopping 80% of formal jobs.
Furthermore, some types of tech companies create far more jobs than their headcounts represent. Etsy, for example, not only creates opportunities at the marketplace headquarters, but also produces income for millions of hobbyists and online retailers who use the service.
Work Skills: Preparing Youth for the Future of Jobs
In addition to creating jobs, entrepreneurship education and experience build the skills employers are seeking. In Harvard Business Review, Timothy Butler, director of career-development programs at Harvard Business School, reminds us that “entrepreneurialism is highly valued in today’s labor market. Companies of all shapes and sizes aspire to be seen as highly innovative, nimble, and agile—all qualities traditionally ascribed to entrepreneurs.”
Here are a few examples of the skills that can be built by learning-by-doing programs for young entrepreneurs:
- Experimentation and risk-taking: Taking calculated risks, experimenting with new products or services, and probing the boundaries of innovative ideas—the foundations of innovation—aren’t easy skills to learn in corporate settings or traditional schools.
- Design thinking and problem-solving: Design thinking—a structured approach to creative problem-solving—is one of today’s sought-after career skills. Practitioners identify a question or problem, gather information and inspiration, brainstorm ideas, develop prototype solutions, test them, and use what they learn to repeatedly and continuously improve. With it, entrepreneurs cannot continue innovating new products or services. Likewise, any type of organization will benefit from this disciplined methodology.
- Adaptability: In our rapidly changing world, what better skill than being able to adapt, pivot, and reinvent a company, product, or service at a moment’s notice? In entrepreneurial ventures, mastering this skill has long been the difference between turning a profit and closing one’s doors. Today, the same holds true for organizations of all shapes and sizes.
Category : entrepreneurship education, skills for employability, impact research
Posted : 14 November 2018 11:16 UTC
Because such a high percentage of CEOs struggle to find employees with the right skill—and see the unavailability of key skills as the biggest threat to their businesses—an international certification of young people’s practical experience in entrepreneurship may be part of a solution. In our own organization, by taking part in the JA Company Program for an entire school year and passing the Entrepreneurial Skills PassTM (ESP) exam, students validate their knowledge, skills, and competencies for employment and entrepreneurship. Supported by the European Commission, the ESP micro-credential is available in 22 languages across 28 countries.
Social Good: Delivering a Double Bottom Line
Perhaps the biggest benefit of entrepreneurship—one that is especially evident when young people start up new ventures—is the opportunity to improve the state of the world. Entrepreneurs have the potential to represent a global force for good, as they develop solutions for emerging local and global issues, ranging from drought, food insecurity, and hunger to poverty, income inequality, gender inequality, disease, disability, and more.
Fully one-third of today’s start-ups aim for social good, while 52% of entrepreneurs recently surveyed reinvest their profits into social initiatives. Investors, too, are actively seeking out companies with a social mission and the long-term profitability they bring.
In our own organization, we’ve seen startups that equip marginalized workers with employable skills, target the causes of gender inequality, provide better access to education, turn waste into household goods, and assist persons with disabilities with a variety of tools. All this from young people under age 25. According to the World Bank, these types of startups “contribute to growth, help diversify the economy, provide innovation, deliver goods to the bottom of the pyramid, and help empower young people and women.”
The workers of the future—which will experience, perhaps, a half-dozen different careers throughout their lifetimes—will apply their entrepreneurial experiences at each iteration, sometimes running their own startups, other times working for corporations, and still other times helping manage NGOs or government agencies. The broad range of skills developed as young people operating their own businesses enable flexible and more resilient career paths, a higher likelihood of new job creation, and a better future for everyone.