Social Partners Lunch Debate: Youth entrepreneurship in the EU – values, attitudes, policies
The number of young people who are unemployed has reached 7.5 million in the EU as a whole. In the worst-hit regions, especially in southern Europe, up to 50% of 15–24 year olds are unemployed. EU youth employment initiatives have been slow to take off since 2013 and the Commission has recently made a proposal to increase pre-financing to promote youth employment to support the efforts of Member States to get 650,000 young people into work in 2015. In its Entrepreneurship 2020 action plan, the Commission states that entrepreneurship support schemes for young people should be put in place to encourage business creation as a route out of unemployment.
Focus of debate
The objective of this Eurofound lunch with EU social partners was to exchange and debate on pressing youth employment issues in the EU, focusing on selected policy measures to promote youth entrepreneurship, and the role different actors can play in it.
The discussion centred mainly on the launch of Eurofound's report Youth entrepreneurship in Europe: Values, attitudes, policies, which provides an overview of the youth entrepreneurship in Europe and presents an analysis of recently implemented specific policy initiatives aimed at fostering young entrepreneurship in five EU Member States: Finland, Hungary, Ireland, Spain and the Netherlands. Among other aspects, the report examines young people individual and social attitudes towards entrepreneurship, including the factors influencing the decisions of becoming self-employed, work values and personality traits of European young entrepreneurs comparing them with young employees.
Eurofound Deputy Director Erika Mezger, Donald Storrie, Head of Employment and Change Unit, and Massimiliano Mascherini, Research manager in charge of the report, introduced the debate (see video below). They gave insight into:
- recent policy initiatives implementation,
- the role different actors can play in their design and implementation
- challenges they have to address.
Main findings of report
The report shows that almost half (48%) of young people would like to become entrepreneurs and two-fifths (41%) see it as possible. However, these proportions are lower than in comparable and emerging economies like the US, Brazil, China and India.
While there is high policy interest across Europe in youth entrepreneurship to help create employment and sustainable growth, the findings show that this career path is not viable for all young people, as setting up as an entrepreneur requires the right skills and mindset. As a result, only 6.5% of young people aged 15–29 in the EU were self-employed in 2013.
Where are the young entrepreneurs?
Rates of youth self-employment differ between Member States, being highest in Italy and Greece (about 15% of those who work) and lowest in Germany and Denmark (3% or less). In addition, labour markets with high levels of young people not in employment, education or training (NEETs) are also more likely to have high levels of young self-employed: Italy, Greece, Romania and Spain.
Young European entrepreneurs are more likely to run small-scale businesses and less likely to hire employees than older self-employed people. One in three of them work on a part-time basis and sectors where they are most active are construction, wholesale and retail, the primary sector and other service activities. Yet they are overrepresented in construction, where forms of ‘bogus’ or false self-employment are rampant.
Values and characteristics
Young self-employed people have different values and personality traits to non-entrepreneurs. Showing innovation, strong creativity, a willingness to take risks, independence and autonomy are characteristic of an entrepreneurial personality. Yet, these young people value the experience and know-how of other, more senior entrepreneurs, who can provide advice and mentoring.
Only one in three young self-employed in the EU are women. Therefore, the report suggests that attention should be paid to promoting entrepreneurship from a gender-equality perspective.
Public investment to promote youth entrepreneurship should target those with the right skills, values and ideas, according to the report. Entrepreneurial education and skills training will help these young people better understand the risks involved and to cope with market challenges. Supporting youth entrepreneurship should be seen as a long-term strategy resulting in new companies but also changing attitudes of young people towards self-employment.
Views of the social partners
The social partners welcomed the report and agreed with the findings on the importance of education in the area of entrepreneurship – for example, they said entrepreneurial skills should be taught in schools, incorporating topics such as how to tackle administrative work, drawing up business plans, knowledge of health and safety issues, as well as social security matters.
They highlighted that fostering entrepreneurial thinking and promoting entrepreneurial skills is one of the priorities of the EU social partners’ framework of actions on youth employment, signed in June 2013, and that a comprehensive strategy to improve the employability of young people and job creation is needed.
Moreover, the social partners argued that the low rate of young women entrepreneurs cannot be explained by societal reasons alone, stating that labour market participation in general plays a role, as does a lack of gender-balanced education systems and the appeal of certain sectors of the economy to young women entrepreneurs.
Guy Lejeune of the Sectorial Employment Challenges, Youth Employment and Entrepreneurship Unit, within the EC Directorate General for Employment, Social Affairs and Inclusion, agreed that youth entrepreneurship is not a universal solution for youth unemployment. It should be regarded as a medium to long-term strategy in which the skills and mindset of an individual are important but should also be further developed within educational systems. As senior expert in charge of the European Commission–OECD project on inclusive entrepreneurship, and invited as commentator, he added that Eurofound’s research would complement the EC-OECD work on the issue and the forthcoming report on ‘Missing entrepreneurs’.
View interview with Massimiliano Mascherini, co-author of report on youth entrepreneurship in Europe
See also: Eurofound (2011), Emerging forms of entrepreneurship