To support youth entrepreneurship, the federal government must foster it in elementary and high schools and make it less risky for youth.
When the topic of youth and entrepreneurship comes up, we are often quick to discount the need to support our innovative youth, because it seems as though they are already well positioned. They receive their education partly at government expense, and they should pay their dues and get entry-level jobs like their parents did, is how the thinking goes.
This mindset is short sighted. Canada has the opportunity and the responsibility to take the lead in supporting youth, by giving a strong leg-up to those who are most vulnerable, and by elevating the shining leaders at an early age.
There are many misperceptions about millennials, but one thing we know is true: they’re not satisfied with the status quo. Many turn to entrepreneurship as away to solve problems and make an impact. Since Futurpreneur Canada’s inception in 1996, we have seen 8,159 new businesses launched by youth, businesses that have created over 39,000 jobs and contributed an estimated $244 million in tax revenue to the Canadian economy. Given that Canada’s economic backbone consists of small and medium-sized businesses, it’s essential that our government supports our country’s youngest innovators.
Canada needs to recognize that youth entrepreneurship is about more than just starting a business. It’s also about fostering an entrepreneurial environment, a problem-solving mindset and an attitude of courage.
Government needs to boldly support entrepreneurship as a viable, exciting and valuable career option. We are hearing from young Canadians that they are anxious and uncertain about their future in a world where the cost of living is rising, competition is global and the pressures are real. Encouraging an entrepreneurial mindset helps youth to envision a future in which they are co-creators and change makers. Our communities will thrive as a result of their leadership and contributions.
When discussing youth and entrepreneurship, we also overlook that they tend to create their businesses in a novel way – many start “side hustles” as a way to test out their ideas and decrease the risks for themselves. For all the horrible clichés that chase millennials, the “side hustle” represents two characteristics of young entrepreneurs: the need for a gig to supplement their income, and the opportunity to creatively chase their passions and start something new.
When I think about my work at Futurepreneur in the context of the future of work, I think of entrepreneurship. We saw a need to support these young innovators, so we recently launched a program we called Side Hustle, a funding and mentorship program to help them grow their early-stage ventures.
But governments need to play a role: to invest in youth’s entrepreneurial ambitions and help them make a smooth transition — whether they land jobs in teaching, health care, or natural resources or whether they start their own businesses or side hustles. Entrepreneurship is not something that magically happens independent of government. It requires strong support networks and access to capital. Governments need to foster both.
So where should the federal government start?
Our education system needs a major upgrade
Some provinces are paving the way. For example, British Columbia recently introduced computer coding in elementary school, but this is already a decade too late. According to the BC education ministry’s 2015 Satisfaction Survey, only 24 percent of BC students say schools are preparing them after they graduate from high school for a job, and only 40 percent say they feel prepared for post-secondary education. These grim statistics need to change.
Make entrepreneurship less risky for youth
Having access to flexible capital and a safety net is important way that risk for young entrepreneurs can be reduced.
Youth often start businesses while still in school or while juggling other work. Thus flexible capital that facilitates part-time work and allows youth to transition into full-time entrepreneurship is critical. Specifically, the federal government can support this flexibility by
- Encouraging students to partake in co-op programs that allow the student to get paid while they pursue their entrepreneurial endeavour for the duration of the co-op term. Simon Fraser University is leading the charge here.
- Supporting programs like Futurpreneur’s Side Hustle program, which allows part-time entrepreneurs to access funding and mentorship as they look to grow their early-stage businesses.
Currently Canada does not have a strong social safety net for young entrepreneurs. Most youth do not meet EI eligibility criteria, and with precarious work such as contract and part-time employment on the rise, income security will continue to be a challenge. When you get fired from a job, you have EI to fall back on. When your business fails and you are 25 years old, not everybody has a mom and a dad to fall back on. Without more government support, youth entrepreneurship will be viable option only for youth who have the privilege of parental support to rely on (that is, a basement to move into, a garage to innovate in, a large savings account).
A bold path for the government to embrace would be to introduce an annual basic income (ABI) geared specifically to youth. An ABI could allow more young people to take the leap and pursue entrepreneurial ventures. Imagine the impact their leadership and innovations could have on the Canadian economy in the generations to come. Canada should pay close attention to pilot projects like YCombinator’s ABI pilot in Oakland, California, which targets 18to 35-year-olds, which by nature of the demographic will include a majority of youth, as well as consider feedback from the Ontario pilot.
Canada’s youngest entrepreneurs, those who are still in high school, are not legally empowered to govern and manage their own businesses — they can be an employee, but they can’t be directors of their own companies. This group might be a small subset, but eliminating this barrier could be part of recognizing youth as entrepreneurs in the future world of work and sending a signal that teenagers can manage and govern their own businesses.
Young entrepreneurs are and will continue to be the backbone of Canada’s economy. The role of the federal government in supporting them should be to make its programs more flexible, promote entrepreneurship education, create tax policies that reflect their needs, and then to get out of their way as they create and innovate Canada’s future.
This article is part of the The Changing Nature of Work special feature.
Do you have something to say about the article you just read? Be part of the Policy Options discussion, and send in your own submission. Here is a link on how to do it. | Souhaitez-vous réagir à cet article ? Joignez-vous aux débats d’Options politiques et soumettez-nous votre texte en suivant ces directives.