4 minute read 26 Apr 2018
young entrepreneur holds match her

How to help young entrepreneurs succeed

By

EY Americas

Multidisciplinary professional services organization

4 minute read 26 Apr 2018

Entrepreneurs have never been more important, and the markets where they operate change quickly. How can governments help them grow?

Digital platforms and data flows are influencing the scale, growth and operation of businesses worldwide. The digital economy contributes up to 8% of G20 countries’ GDP, and that figure is set to rise, according to data published by the European Commission in 2016.

This is part of an ongoing seismic shift in the commercial world: the emergence of new products, services and business models; changes to global trade and value chains; increasing connectivity between businesses; and greater mobility and collaboration.

For entrepreneurs, this digital disruption brings both risk and opportunity. However, navigating and embracing this upheaval is far from straightforward.

At the same time, global changes in demographics, the decline of labor-intensive industries, and stubbornly high levels of youth unemployment mean that creating the conditions for young entrepreneurs to thrive and build job-creating businesses is a top priority for governments around the world.

Setting up entrepreneurs for success

Although entrepreneurs themselves are disruptors, an arguably larger force of disruption is the rapid advancement of new digital technologies.

As governments think about how to set up their economies to succeed in this evolving digital environment, they need to keep an important question at the forefront: how can they help equip young entrepreneurs for the age of digital disruption?

It is not unusual to see start-ups struggling to keep up with change. It follows then that aspiring young entrepreneurs – even the “digital natives” –are also set to face serious challenges unless governments do more to prepare the way.

Young people are closest to evolving digital technologies and should be best placed to take advantage of the benefits they offer in business. But to do so, they need adequate support: better access to finance and education, and the right exposure to different markets.

This will require an entirely different policy approach: one that is cross-border, education-focused and collaborative.

How can governments help?

Policy can play an important role in turning digital disruption into a powerful opportunity, but policymakers must first address some fundamental questions: How are young entrepreneurs transforming in the face of digital drivers? And how are they using emerging digital technologies to grow and make their businesses more efficient?

In a recent report, Disrupting the disruptors (PDF), we measured and compared the digital dimensions of entrepreneurship across G20 countries with our new G20 Digital Entrepreneurship Barometer. We found that Canada, Germany, Japan, the UK and the US had the leading digital entrepreneurial environment; while Argentina, Brazil, India, Mexico and Russia lagged behind.

 

The EY G20 Digital Entrepreneurship barometer rankings, 2016

So, how can the leading nations maintain and further improve conditions for entrepreneurs, and how can those who are behind catch up? The report highlights five areas for action:

  1. Access to finance: promote the development of early-stage financing and support schemes for young entrepreneurs, including incubators and accelerators.
  1. Entrepreneurial culture: introduce entrepreneurship as a specialized stream in higher education and integrate it throughout courses at primary and secondary levels; engage industry in developing tech-, digital-, and management-focused training; and protect young entrepreneurs with targeted intellectual property provisions to encourage innovation and collaboration with larger organizations and investors.
  1. Digital business environment: champion a G20 entrepreneur mobility visa and promote the development of support networks for newly arrived entrepreneurs in G20 host countries, and establish clear guidelines on data privacy and security, including usage, data rights and quality.
  1. Digital skills and entrepreneurial education: prioritize science, technology, engineering and mathematics (STEM) in schools, particularly for female students, and promote youth entrepreneurship mentoring and coaching programs within industry and entrepreneurship networks.
  1. Digital knowledge base and ICT market: foster multi-stakeholder digital clusters and networks, including those with a sectoral or city-level focus, along with coaching and mentoring schemes, and support university-entrepreneur collaboration, including through funding incentives for universities.

At a glance, there is a lot to do, but closer inspection shows many of these frameworks – financing, education and training, cross-border collaboration – are already in place. What is needed now is the political will to turn these recommendations into a reality.

With the global economy still fragile, and so many social and economic trends converging to make conditions more challenging all the time, the stakes are high. The time for action is now.

Summary

If young people are supported, they can use digital opportunities to turn great ideas into success, providing jobs and inspiration.

About this article

By

EY Americas

Multidisciplinary professional services organization