Ahead of the G20 Young Entrepreneurs’ Alliance (YEA) summit in Sydney between 18-21 July, EY has launched Avoiding a lost generation – ten key recommendations to support youth entrepreneurship across the G20. The report, put together in collaboration with the G20 YEA, identifies and analyzes the different youth unemployment issues faced by countries across the G20 and seeks to offer actionable recommendations, as well as providing examples of successful entrepreneurship schemes and policies already in place. The G20 YEA summit will feed recommendations into the G20 Leaders’ Summit taking place in Brisbane in November, which has a clear focus on global employment. 

Youth unemployment remains high, at 16% across the G20 nations. Encouraging entrepreneurship is widely seen as one of the solutions to the problem, thanks to the jobs a vibrant entrepreneurial organization can create. Indeed, recent EY studies show that entrepreneur-led businesses will create more jobs than large corporates over the coming year – with 76% of entrepreneurs saying they’ll expand their workforces in 2014 compared to 31% of senior executives at large corporates [see notes to editors that follow]. 

Maria Pinelli, EY’s Global Vice Chair of Strategic Growth Markets, said:

“Youth unemployment is a persistent issue across the world and, despite improving economic conditions, it remains stubbornly high. This is not only a tragedy for the young people affected, but it is a huge wasted opportunity for governments across the globe.

“Fostering a vibrant entrepreneurial ecosystem is one of the best ways to deal with youth unemployment, thanks to the large number of jobs that entrepreneurs create and the path to employment and fulfillment that starting a business can offer young people.”

Recognizing that there is no one-size-fits-all solution is key to the report’s findings, which analyzes the different challenges faced by G20 countries using a new methodology which helps countries identify where to look amongst fellow G20 members for the right solutions to the issues they face.

Pinelli continues:

“Governments around the world are determined to encourage greater levels of entrepreneurship and have developed a range of very successful schemes and interventions to do this, whether it’s encouraging and targeting funding where it is most effective, reducing tax liabilities on start-ups, or creating innovation hubs. All are to be commended when in the right context.”

The report includes analysis of schemes currently in place across the G20 and beyond to develop 10 key recommendations for action that will be presented to the G20 YEA Summit, these are:

1.    Create funding mechanisms, either government run or government backed, that make mentorship and financial education a condition of funding.

2.    Create strong relationships, and provide incentives, with venture capitalists, incubators and business angels to develop or create initiatives that enable alternative sources of capital.

3.    Sponsor start-up growth with low-cost funding for targeted groups.

4.    Create a new class of loan for small businesses and young entrepreneurial firms that offer targeted funding to meet expansion capital needs.

5.    Encourage investment in start-ups by offering tax benefits.

6.    Encourage top international talent by changing visa rules and offering funding support.

7.    Simplify and streamline tax administration to ease administrative burdens on young entrepreneurs.

8.    Create a positive narrative around entrepreneurship to help engage young people from an early age.

9.    Encourage and foster hubs, incubators, accelerators and networks to bring relevant talent together.

10.  Create the foundation for a regional entrepreneurial ecosystem to flourish.

Pinelli concludes:

“While the solutions to promoting entrepreneurship vary by country, our experience is that there are some key principles that all countries should follow, these include tying funding to mentorship, which helps to ensure that government money and support is not wasted. We’re also seeing great success in countries where governments have worked with business and academia to create entrepreneurial hubs and run initiatives to encourage a broader acceptance and celebration of entrepreneurial spirit and endeavor. There are a number of very successful schemes across the G20 that are to be commended.”

 

 Ronald Attard, EY Malta's country managing partner, said:
“Policy-makers around the world including Malta need to develop a funding ecosystem that encourages entrepreneurial growth. If they succeed in doing so growth will follow“