The OECD-European Commission collaboration on inclusive entrepreneurship has produced a series of reports and policy briefs that examine the barriers faced by different under-represented and disadvantaged groups in business start-up and self-employment, as well as appropriate policy responses to address these barriers. This work has covered several social target groups, including women, youth, seniors, migrants, the unemployed and people with disabilities. Youth has been a key target group of this work programme given the political urgency for addressing labour market challenges for youth. Reports directly covering youth entrepreneurship include the “Policy Brief on Youth Entrepreneurship” (EC/OECD, 2012) and the series of Missing Entrepreneurs reports (OECD/EC, 2013; 2014; 2015).
Barriers to entrepreneurship for youth In general, youth face barriers to entrepreneurship in the areas of social attitudes, lack of skills, inadequate entrepreneurship education, lack of work experience, under-capitalisation, lack of networks, and market barriers:
• Role models: Young people are influenced by important role models such as their parents and teachers, but often they are not very aware of the requirements and opportunities of entrepreneurship. This lack of awareness among role models results in a lack of encouragement and support for entrepreneurship. A negative attitude exhibited by an important role model, or even negative social attitudes, can act as an obstacle to youth entrepreneurship.
• Lack of skills: Education and training programmes often do not do enough to nurture entrepreneurial attitudes and skills; instead they aim to prepare students for a career in employment.
• Lack of experience: A major determinant of business start-up and entrepreneurship performance for youth is prior work experience. However, youth typically lack the necessary human, financial and social capital to successfully start and run a new business. Moreover, relative to older people, youth are much less likely to have managerial or specialised industrial knowledge that would help them in self-employment.
• Under-capitalisation: Youth tend to have low levels of personal savings and have more difficulty than adults in obtaining external finance. Banks and other financiers typically consider credit history, past business performance and collateral when evaluating potential loans. Youth-owned firms are less likely to score well according to such measures.
• Lack of developed networks: Due to a lack of experience in the workplace and in entrepreneurship, youth people are likely to have limited business networks and businessrelated social capital. As a result, they may not be able to access a wide pool of resources and ideas. It will also be more difficult for them to build “legitimacy” amongst key stakeholders (e.g. financiers, customers, suppliers).
• Market barriers: Youth entrepreneurs may face “discrimination” from customers who are sceptical about the reliability or quality of their products or services. Similarly, youth entrepreneurs are more likely to enter industries where barriers to entry are low but competition is very strong.