Many young people in Africa and Nigeria cannot find job due to bad leadership and financial crisis in the continent. One of every ten young graduates is employed and some of the young people are employed outside the field that they were trained in the colleges and Universities. These outcomes are both inefficient and inequitable. Evidence shows that the unemployed are unhappier, more likely to experience a range of health issues, and face difficulties in integrating back into the labour market place. For young people, the effects of unemployment may be particularly scarring.
Evidence suggests that a spell of youth unemployment increases the likelihood of poorer wages and unemployment in later life. Such outcomes also have pronounced social costs. One potential way of integrating young people into the labour market is to increase youth entrepreneurship. Becoming an entrepreneur potentially offers benefits to the young person through deepening their human capital attributes like self-reliance and skill development, and increasing their levels of happiness. It also offers societal benefits.
Entrepreneurs create jobs, increase innovation, raise competition and are responsive to changing economic opportunities and trends. Entrepreneurship offers other positive externalities. A young person setting up a new business may provide ‘demonstration’ or learning externalities in that they may act as a role model for other young people. This may be particularly advantageous in deprived communities because setting up a new business – especially if it goes on to be successful – may signal that entrepreneurship is a mechanism for helping disadvantaged people break out of social exclusion. Indeed, one of the reasons why youth entrepreneurship is so attractive is that it offers an indigenous solution to economic disadvantage
Youth entrepreneurship is also attractive to policy makers because of the high rates of latent entrepreneurship amongst young people. Because the labour market experiences of young people have become increasingly delayed and fractured, one expectation might be that young people have increasingly adopted differing forms of work and business activity. In terms of entrepreneurship, this may have led to the adoption of differing ‘business models’ such as part-time self-employment; some form of co-operative or social enterprise; or a focus on a particular (innovative) sector.
Again, however, there is limited evidence on the adoption of new business models by young entrepreneurs. Younger people were more likely to set up social enterprises than older people. Social entrepreneurs are happy people, interested in politics, giving to charities, extroverted, and more liberal in their political ideology. There is clearer evidence on the business sector chosen by young people. This largely follows the patterns of businesses set up by older individuals. On average, the typical new business is focused on sectors in which the entrepreneur has prior experience of; tend to be service rather than manufacturing orientated; and have relatively low entry barriers and low capital requirements. Businesses set up by younger people seem largely to follow this pattern.
Rosa (2003) finds that the graduate businesses “were not imaginative ‘cutting edge’ businesses”. It is difficult to reliably know how many young people who may be running a full-time or part-time business whilst studying. This is largely because the statistics on students typically focus on post study work outcomes rather than work outcomes in education.