ADVISORY COLUMN: Don’t start a business just to create a job
Are we setting up our youth for business failure? Are the majority of them ready or suited for entrepreneurship?
These are questions I've been asking for more than six years, since the Government launched the Youth Entrepreneurs Programme (YEP) targeting high school leavers and tertiary institution graduates under 25 years.
So concerned was I about this effort to produce mass quantities of entrepreneurs without enough attention to substance, practical obstacles and their overall readiness that I penned a letter to this newspaper titled 'Not so fast on YEP', which was published on May 18, 2009.
I wrote then: "YEP must engage those who are rich in ideas, while recognising that not everyone is suited for entrepreneurship. Therefore, a key facet must be to identify youth with great entrepreneurial spirit, discipline and passion."
I again raised these concerns at a recent panel discussion at the University of the West Indies on the topic 'A Paradigm Shift? From Degree to Entrepreneurship' hosted by the UWI Guild of Students. The discussion marked the launch of their 2015 entrepreneurship competition.
According to the UWI Guild Vice-President for Properties and Special Initiatives Oshane Reid, the forum was meant to bring attention to the growing trend of universities to push graduates to start businesses to create employment for themselves rather than pursuing the elusive 'dream job'.
Reid said the discussion was also meant to provide "information, encouragement and inspiration to students who may be scared to pursue entrepreneurship".
While I fully endorse entrepreneurial education and promotion, my concern is that the message from government, schools and some universities in the last few years has been 'unemployment is high, job growth is limited, so start a business to employ yourself'.
It's a dangerous mantra that can do serious harm to the national effort to develop a sound entrepreneurial ecosystem and a top-notch cadre of entrepreneurs. Why? Because pushing people to start a business to feed themselves encourages necessity-based rather than opportunity-based entrepreneurship, the latter being exceedingly more effective at creating innovative, high-growth potential and sustainable businesses.
Necessity entrepreneurs are people who have been pushed into entrepreneurship because no other suitable employment opportunities exist. These are people whose only motivation for starting a business is to earn an income.
The problem with necessity entrepreneurship is that it often results in the wrong type of people, going into the worst types of businesses, at the wrong time, with inadequate skills and resources, and without the requisite passion and drive. It's the perfect storm. The perfect set-up for failure for people who may never be motivated to learn from the experience and try again.
Opportunity-based entrepreneurs, on the other hand, are people who are driven to start a business because they believe they have identified some meaningful opportunity which they are determined to exploit.
They have an entrepreneurial mindset and are passionate about their endeavours. They are driven to take the risks necessary to launch enterprises that can bring their ideas to fruition with the expectation of making profits.
It's understandable, therefore, that they would be more likely to succeed in building dynamic businesses that are far more likely to grow and prosper over the long term. They know failure is a possibility and are often prepared to start again with even greater optimism and useful experience under their belts. Opportunity entrepreneurs, with appropriate training, support and mentorship, are more likely to start and thrive in the types of businesses Jamaica still greatly needs: those that export/earn foreign exchange; that locally produce/substitute what we import; and that can solve pressing societal problems.
Going back to my concern that we may inadvertently stymie our entrepreneurial ecosystem - when we push large numbers of youth to start businesses out of desperation we reinforce the notion that entrepreneurship is to be ventured into as the last resort for those who can do no better.
That it is the simplest and most practical employment option. In my opinion, this reduces entrepreneurship to a hustling and negates the development of a strong ecosystem.
In fact, we may run the risk of turning off an entire generation of young people who will grow to scorn and stigmatise entrepreneurship for its harsh lessons.
Entrepreneurship remains one of the most difficult and demanding careers in which only the most visionary, ingenious, resourceful, passionate, bold, and tenacious will flourish against unfair odds.
My advice to graduates who can't find employment remains - do not start a business just because you need a job. Start a business only when you have identified a great opportunity and are personally ready to capitalise on it.
In the interim, freelancing online remains one of the most feasible solutions to high youth unemployment in the current environment.
Correction from source:
In my last column, 'Overcoming the fear of accounting and finance in 2015, Part 2', the ICAJ is correcting the information it provided that persons can request the rÈsumÈ of any ICAJ member at no cost. Such requests cannot be made to the ICAJ, but the institute has a databank of student rÈsumÈs.
n Yaneek Page is an entrepreneur and trainer in entrepreneurship and workforce innovation. Email: email@example.com Twitter: @yaneekpage Website: yaneekpage.com