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Is entrepreneurship the silver bullet for youth unemployment?

Abu Dhabi: As the Outlook on the Global Agenda 2014 finds structural unemployment among the top ten issues for world leaders next year, and with the UAE having nearly 40,000 unemployed youth, Gulf News interviewed Dr Marc Ventresca from Saïd Business School at the University of Oxford about the crucial role of entrepreneurship in combating unemployment on the sidelines of the World Economic Forum Summit on the Global Agenda 2013 held in Abu Dhabi this week.

Dr Ventresca addressed a number of issues including whether entrepreneurship can be the silver bullet for youth unemployment in the UAE, how entrepreneurship directs youth energy towards innovation, and how business, government and civil society in the UAE can work together to finance and develop these entrepreneurship programmes, as well as how programmes can be tailored to reflect the diverse set of needs and aspirations of young people.

“Entrepreneurial activity combines talent [human capital] with resources [financial capital but also social and cultural capitals] to create new business opportunities brought about by changed technological, cultural, and commercial conditions,” says Dr Ventresca.

He stresses that there is no “silver bullets” for UAE’s youth employment, or for any of the complex challenges that face the society.

“Instead, these are tough, ‘wicked’ policy problems that require fresh attention using available tools to leverage market processes, state resources and capacity, and community expertise and talent.”

Dr Ventresca’s work in Abu Dhabi for the World Economic Forum/Global Agenda Council Summit is directly linked to the Council on Fostering entrepreneurship. “We take what we know from academic research, policy experiments in many countries, and practical insights about how to support entrepreneurial activity, to engage these challenges. The wisdom is that government agencies, corporations, and civil society organisations all have a role to play, and that experiments with new forms of cooperation across these sectors is critical to developing local, relevant initiatives for the UAE and other countries.”

He says university graduates are a precious source of talent and capacity for the UAE. They represent “raw materials” bringing extraordinary energy and optimism along with their talents.

Directing youth energy towards innovation

On how entrepreneurship can be seen as a way of directing youth energy towards innovation, Dr Ventresca says entrepreneurial activity involves trying new ways of solving and servicing unmet needs. This is fundamentally relevant for young people — who are curious, approach the world based on their own experiences and insights, and bring diversity of view point and effort. Most organised entrepreneurship programmes recognise this — whether community-based agencies encouraging young people to turn their energies to local community benefit, or more organised incubators and accelerators that we find in many places today. Young people have aspirations and are often impatient — these are raw materials for innovation. There are many cases that show that when you bring young people into organised activities in the community, their energy and imaginations can contribute to innovative solutions such as widespread “hackathons” built around coding for software applications, and the more general usage of the idea of “hacking”.

Unemployment a national security issue

Members of the Federal National Council (FNC), see unemployment among citizens as a national security issue, describing unemployed young people as a scarred and lost generation.

Dr Ventresca says it is important that senior leaders pay attention to the pervasiveness of youth unemployment and the challenges this poses for these young people, their communities, and the society.

He, however, notes that entrepreneurship is not the solution, but rather can offer a set of insights and potential actions to re-engage young people. It can also create ways for them to develop skills that benefit their own well-being, the community, and the broader economy and society. “Where I see successful entrepreneurial initiatives and culture, I see serious investments by firms, government agencies, and civil society organisations building platforms connected with schools, religious organisations and other agencies that serve the youth. These partnerships are critical for youth entrepreneurship, where young people can experiment with ideas and initiatives that address the waste of potential, frustration and discontent.”

Effective entrepreneurship programmes

On how entrepreneurship programmes can best be designed, implemented and delivered in a way that maximises their benefits to young people and the wider economy, Dr Ventresca says effective programmes that engage and encourage young people in entrepreneurial activity:

— are connected with practical concerns in the local community, where young people can see and experience and “know” something about the context and about possible, untried solutions, then see the impact and effects of their efforts

— create the sort of experimenting mindset and take seriously the “getting to plan B” approach to entrepreneurship: the first ideas are often rough, and benefit from a rethink — but they are a starting point.

— have flexible support from sponsors and key stakeholders. This is key for the potential “learning” from what is tried out and may not always go well the first time.

— recognise that “failures” are actually teaching moments, and build in explicit tolerance for “trying things out”. This involves honest feedback, and explicit effort to understand the process and where it went wrong and/or right.

— start small and focused, and add more complexity or scale or scope in measured fashion — over months, or even years. The successful models of community entrepreneurial activity start with big ambitions but modest initial challenges and commitments.

This model allows learning and also, importantly, local capacity-building in both the programme and in the sponsor agencies. In addition, the young entrepreneurs begin to build up cognitive flexibility and the ability to see alternatives and to understand how to engage resources beyond their immediate control.

On how programmes are tailored to reflect the diverse set of needs and aspirations of young people, Dr Ventresca says best practices these days take a “design” approach: pilot a programme with various features, work with one or two cohorts of participants, take on feedback and observations, incorporate insights, and implement again. Repeat with different groups of young people, such that those differences actually become a point of learning and insight in building robust ventures.

The challenge is to build in this kind of “experimenting” mindset into the expectations of the sponsoring agency and the participants. The overall value of a programme may be in this purposeful design that challenges young people to seriously adopt this sort of learning/experimenting approach.

Gulf News asked what success looks like when implementing programmes in places where there is little or no cultural precedent of risk-taking, particularly in remote areas in the UAE. Dr Ventresca said the issue of how culture shapes entrepreneurial effort and aspiration is an important consideration. But the focus on “risk-taking” may misdirect both efforts and how we assess “success”. Entrepreneurship is primarily about local problem-solving: the “local” can vary, but the skills are the same.

The imagery of “risk taking” is common but is by no means the most prominent or most effective feature of early entrepreneurial activity. Particularly in communities where this is not culturally valued, I would counsel building on local traditions of problem-solving or experimenting; these are more likely to reinforce available capacity and interest. Most young people are curious about the world and pay attention to different priorities than their elders. Successful programmes build on these available resources to encourage young people to think through current needs in fresh ways.

For these remote areas, entrepreneurial “success” may well seen in young people finding purpose to do something of value in the community, and to garner resources and recognition from the community in support of their efforts.

On how can business, government and civil society in the UAE work together to finance and develop these entrepreneurship programmes, Dr Ventresca says this is the most challenging issue — how to engage key actors across many sectors and with different institutional missions. “ The success stories that I know around the world start small. Key partners from these different worlds and different policy sectors gather in informal conversation and they talk with young people, and then, they start somewhere. For some, this starts with a community agency partnering with a government. For others, a firm takes a lead role, working with a civil society or a humanitarian agency. There is no single method. What is common is that the effort has to build from both individual and common interests, and has to “make sense” in local terms to each of the partners. This may well mean that each partner has to be clear and direct about what actions will serve its own mission. At that point, as in any good negotiation, they can look for shared actions and solutions that address the well-being of the youth of the coming generations. I am hopeful for these initiatives in the UAE — born out of public attention and concern, emboldened by the recognition that the country’s youth are a crucial and precious resource,” Dr Ventresca said.