Inclusive Development and Entrepreneurship for All.

 

The world’s population is growing at a time when traditional, stable labour markets are shrinking. With an estimated 74 million young men and women worldwide unemployed. The youth unemployement rate is three times higher than its adult counterpart despite the global educational improvement trend. There is an undeniable need to create employment for youths. The challenges of youth employment in least-developed and middleincome countries, which are particularly acute, are subject to many development efforts by Governments and development partners. Many of these efforts foster the engagement of youth in productive activities. The success of these initiatives however depends on the availability and capacity of local enterprises, particularly small and medium sized businesses. There is now empirical and anecdotal evidence that the number of sustainably-operating small and medium-sized enterprises (SMEs) that can provide work to additional employees in developing countries is limited and difficult to expand. Meanwhile, start-up SMEs face severe constraints during their creation related to hurdles in registration, access to credit, business organisation and developing markets. Entrepreneurship and self-employment are therefore a viable alternative for young people when given the right skills and provided with adequate support to establish and develop their own micro or small enterprises. Youth entrepreneurship cannot only create employment opportunities for self-employed youth but also for the other young people who they may employ. In addition, the changing structure of the job market (types of jobs available, sectors and the nature of hiring employers), the lack of access to professional networks and the growing value employers place on work experience all put a strain on young people while entering the job market. The labour market shortcomings are such that they have to be addressed through adequate vocational training to match youth skills with current needs in the industry, through opportunities to brigde a gap in work experience for young people. Thus, there is a critical need to create more entry points and progression routes for young people. This report features IDEA (Inclusive Development and Entrepreneurship for All), a strategy recently developed at UNIDO aiming at addressing in an integrated approach the main constraints faced by youth when trying to enter the labour market. Indeed, Idea’s main focus is to engage youth in economic/productive processes through enhancing youth employability (by addressing the skills mismatch of youth by providing training skills in line with the needs of the job market) and in providing young aspiring entrepreneurs with the necessary tools to effectively start and run their businesses. By building the capacity of youth and women with a view to create jobs by the means of entrepreneurship development, IDEA also contributes to reduce the vulnerability of economies to crises and strengthens their capacity to absorb and overcome severe shocks while supporting strong growth in post crisis stuations for instance. IDEA goes beyond common training and technology transfer approaches, putting all conditions into place to enable successful enterprise creation and development by tackling the challenges of enterprise development, which are specific to youth. IDEA proposes to close the gaps between many targeted capacity building projects in one integrated programme that will build on national achievements and that is modular and flexible enough to be able to adapt itself to national reality and be tailor made to the country’s strategy in terms of youth employment, job creation and private sector development. In order to do so, IDEA accompanies beneficiaries from the very inception of their business plan through first steps of technical, technological and practical capacity building passing by an internship giving the opportunity to have a real-life working situation experience as an entrepreneur. After this transition mechanism, the beneficiary is ready to go through the formalization process of a new business while benefiting of extensive managerial, financial and technological capacity building with a view to strengthen the enterprise and turn it into a viable and sustainable business anchored in the private sector. The next step will provide assistance and capacity to support the created companies on the path to sustainable growth by the means of cluster development to boost innovation and productivity and integrate regional or international value chains. Finally, IDEA intends to make sure that enterprises created within the programme have reached autonomy and the expected behavior in terms of sustainability and growth. IDEA builds on UNIDO’s unique expertise in the various stages of SME development. In particular, UNIDO has vast and significant experience in providing technical assistance and service programmes in the developing world focusing on youth employment, entrepreneurship development, skills and technological upgrading, added value and market access, standard setting and compliance, cleaner production, new and more efficient energy supplies as well as policy advisory services. UNIDO also has been able to blend manufacturing-sector-specific technological knowledge with business and entrepreneurial skills and the experience in this is reflected in IDEA. Further IDEA builds also on the partnerships that UNIDO has fostered between private sector, marginalized producers and Government agencies through the world’s industrial sectors providing beneficiaries with unprecedent opportunities for income generation and employment. IDEA is also a valuable tool towards inclusive and sustainable industrial development (ISID), the new approach championed by UNIDO. Indeed, IDEA aims to create shared prosperity by contributing to generate widespread productive employment through enterprise development. It is socially inclusive for item powers disadvantaged young men and women to develop their skills and to take advantage of available local business opportunities. IDEA also promotes inclusiveness on a wider scale since it brings together a wide range of actors ranging from public institutions, private sector organisations, clusters, vocational training centres, business development services, to financial and knowledge-based institutions. Thus, IDEA fosters Private Public Partnership (PPP) for stronger communities and enhanced synergies for local economic development. The report constitutes an introduction to how and why IDEA should be used in enterprise development, fostering youth employment in middle-income and least developed countries. With this it addresses decision makers of youth and employment programmes in Governments and development agencies that look for more effective measures to address existing job creation and enterprise development opportunities in Least Developed Countries (LDCs) and Middle Income Countries (MICs).


The report is structured as follows: Chapter one reviews the current global employment situation facing youths, presents the main bottlenecks and draws conclusions on the importance of addressing them in order to promote youth employment for economic development in least-developed countries (LDCs) and the middleincome countries (MICs) and particular challenges associated to it related to informality and gender. Chapter two identifies entry points for youth employment-relevant enterprise development and illustrates experiences and common practice within UNIDO projects. Finally, chapter three presents the IDEA approach which was developed out of experience of a youth entrepreneurship programme in Senegal providing evidence for its effectiveness and giving a greater insight into the IDEA five-step- approach.




Inclusive Development and Entrepreneurship for All - The IDEA Approach to Youth Employment and Enterprise Development
UNIDO inclusive and sustainable industrial development (ISID) working paper series No. 2.

What is inclusive entrepreneurship?