Editor's note

The Eurofound report shows that almost half of young Europeans are interested in becoming entrepreneurs, and over 40% believe it is feasible. However, only 6.5% of young people in work are self-employed, and there are significant national and gender differences in Europe when it comes to the amount of young people that actually set up their own business.

Significant differences

There are significant differences between EU Member States, and the share of youth self-employment varies from 15% or more in Italy and Greece to 3% or less in Germany and Denmark. Youth self-employment is also a predominantly male activity as just 33% of young self-employed people in the EU-28 in 2013 were women.

There is also an issue with the overrepresentation of young self-employed people in sectors with low barriers to entry, such as construction, where there are issues with ‘bogus’ or false self-employment.

Although youth entrepreneurship is not a panacea for youth unemployment, a long-term strategy for supporting the creativity and ambition of Europe’s entrepreneurial minded young people can produce positive results. Tailoring policies and initiatives to those with the right skills, values and ideas, and encouraging the creativity and ambition of young people could significantly impact the European economic and social landscape in future.

Problems to solve

However, self-employment and entrepreneurship are not a panacea for solving the youth unemployment crisis, as only a minority of young people has the right skills, ideas and personality traits. However, making Europe more business-friendly and helping young people transform their creative ideas into successful business plans by removing the barriers to entrepreneurship has many potential benefits, including direct and indirect job creation and the development of human capital and new skills.

The report analyses selected policy measures aimed at fostering youth entrepreneurship in Finland, Hungary, Ireland, the Netherlands and Spain, organised around three main support pillars:

• fostering an entrepreneurial mindset and culture among young people;
• providing information, advice, coaching and mentoring to young would-be entrepreneurs; and
• removing perceived practical and logistical barriers.

However, it is still a very difficult task presently for young people in Europe to find their place in the world of work. Fostering greater participation of young people in the labour market has therefore become a policy priority.

By comparing the work and human values of young self-employed people with those of young employees, the report shows that the entrepreneurial personality has specific value preferences which affect social behavior.

Significant differences between the two groups emerge. In particular, among young people self-employment is positively associated with self-direction and stimulation, and negatively related to tradition, conformity and security. These results suggest that it is important for young self-employed people to be free and creative, to try different things in life and take risks; this group is less inclined to follow tradition and to prioritise having a secure and stable environment.

Openness to change is a specific behavioral characteristic of young self-employed people, while conformity is clearly associated with employees.

Policy measure recommended

The report examined 15 selected policy measures and initiatives that could foster youth entrepreneurship in the selected EU member states.

Thus, eight policy measures have been identified in relation to possible policy in the pillar 1: Fostering an entrepreneurial mindset, attitudes and culture among young people. Some policy measures recognise the important role that teachers play in these processes (‘train-the-trainers’) and the initiatives, usually offered within the education system, tailor the goals and tools according to the levels and age of students.

Then, seven policy measures were identified in relation to policy pillar 2: Providing information, advice, coaching and mentoring. These help young entrepreneurs to overcome gaps in their work/business-related knowledge and experience via different support tools.

Additionally, seven policy measures were found regarding another policy pillar: Removing perceived practical barriers and easing access to credit. These deal with the lack of initial capital and difficulties in obtaining external finance that especially affect young entrepreneurs, as well as with finding a premises and physical infrastructure to develop their businesses.

Perspectives for the Baltic States

All EU member states, including the Baltics’, can learn from best experiences, e.g. in countries where developing an entrepreneurship culture among young people is quite successful.

Youth entrepreneurship support needs to be understood as a long-term strategy: the policies put in place are more likely to produce both tangible (for example, new companies) and intangible results (changes in the general attitude of the young towards self-employment) in the medium and/or long term.

Support programs for youth entrepreneurs are especially effective when they provide a balanced, comprehensive range of support, as the difficulties encountered are often interrelated and require a combined approach.

This support is expected to spread over a relatively long time span to be fully effective, as the first years of any enterprise are usually the most crucial.

The quality of the teachers and mentors/counselors is key for the success of the initiatives as young entrepreneurs particularly value the experience and know-how of more experienced entrepreneurs.   

The report, Youth entrepreneurship in Europe: Values, attitudes, policies is available at: 

http://www.eurofound.europa.eu/publications/report/2015/labourmarket/youth-entrepreneurship-in-europe-values-attitudes-policies