Recently in the media, Australia was urged to take more of a gamble in business investments and to focus less on risk reduction strategies. This was observed by the Governor of the Reserve Bank, Glenn Stevens in his address to The Anika Foundations Annual Lunch, who stated that the economy has remained stifled after the financial crisis and has resulted in a lack of business confidence.
The financial crisis was also the catalyst for G20 priorities that have the economy and growth on the agenda during Australia’s presidency. The Youth version of the G20 (Y20) has continued the conversation to include young entrepreneurs and more specifically, how do we support these bunting young people contributing to the economy?
At the Y20 Summit in July, the delegation discussed recommendations around fostering academic collaboration in skills training, rewarding the creation of start-up incubators and enhancing programmes aimed at valuing start-up initiatives.
This all sounds very positive but the realities for how we encourage young people in our everyday lives is anything but supportive. Our education is structured mainly around a production style system and promotes little opportunity for young people to branch out and make profits from their natural passions or skills. We should also be promoting the inclusion of children in social and economic activities that surround our community locally and globally.
100 years ago, many young people were involved in the everyday transactions of the family farm and most went on to take over their family business. Most people were in fact born entrepreneurs and demonstrated skills that we would usually only be observed in business people today. The day-to-day operation of property, food and land management required a minimum level of independence, trade and negotiation skills.
In today’s society, the culture of raising a family in a business environment can be perceived in the negative as parents who, do not spend enough time with their children and varied other unqualified judgments. My observation is that children who grow up with a family business tend to be more mature, grounded, hardworking and often go on to be entrepreneurs themselves.
There are statistics that support the advantages of business start-ups by young people as communicated in the 2012 OECD/European Union, Policy Brief on Youth Entrepreneurship. It was discovered that among businesses that survived three years, those run by people less than 30 years of age have an average growth rate of 206 per cent, which is almost double the growth rate of businesses run by those over 40.
The factors surrounding the reasoning are varied but a lot can be attributed to the tech savvy generation that are running these businesses. For people who reached prime independence age in their teenage years, computers were a big part of their life and therefore have never known a life that wasn’t exposed globally.
Another factor is that we live in a world of credit. Our very driven young entrepreneurs know that money is not always required up front and never let finance get in the way of a good business idea. Globalisation has provided an added advantage to young people looking for investors to believe in their business idea, whereas earlier generations had to beg, save and borrow to get their idea off the ground.
These reasons may be why the Global Entrepreneurship Monitor Report showed that 25-35 year olds have the highest rate of entrepreneurial activity. This will likely increase as technology continues to improve and borders seem almost non-existent. Providing young people are encouraged in their endeavours and we continue to have access to information, we will see expanding business prospects into new markets hopefully creating a future culture of entrepreneurship.