…And not just because the job market is tough.
Entrepreneurship is often quoted today as one of the means to tackle youth unemployment. If you can’t find a job, create your own, right? Kinda. But we’d need entrepreneurs even if the economy was growing at 5%.
Entrepreneurship and sustainable growth
Entrepreneurship doesn’t just help reduce unemployment; it strengthens the economy in the long run. A strong network of small and medium enterprises (SMEs) helps to generate demand as companies cater to each other’s needs. A high number of SMEs helps keep the market competitive, as each company vies for the top spot. It also fosters greater innovation as entrepreneurs seek to differentiate themselves from the crowd and translates into better services at lower costs for the public. Finally a flexible, diverse, competitive fabric of SMEs helps to absorb external shocks.
Take Germany: SMEs launched by driven entrepreneurs are one of the pillars of its resilient economy. BMWI, the German Ministry of Economics, reckons SMEs employ 60% of the country’s workforce. 52% of the country’s overall economic output in 2010 came from Mittelstand (SMEs). These small, often family owned companies represent more than 90% of the German private sector and strive to innovate continuously, which contributes to making many of them leaders in niche markets.
Given this long-lasting positive impact, public and private stakeholders alike are right in encouraging young Mauritians to be more entrepreneurial.
But it’s not exactly self-evident.
The benefits of entrepreneurship may be obvious at the macro-level of policymakers but less so at the micro-level. According to the TEC, only 1.4% of graduates over the 2006-2011 period were “self-employed.” Partly, it’s a cultural issue. Many assume (wrongly) that an entrepreneur is an uneducated person trying to eke out a living. We are trained from birth to be employees. In school we are pushed to be efficient in our task, not creative in how we solve problems. Even now, the promotion of entrepreneurship piggybacks on the need to find alternatives for would-be employees rather than solutions for would-be entrepreneurs.
To be fair, being an entrepreneur is hard (find me a job that isn’t). Launching a business involves uncertain revenues, financial constraints, frustration… There is also no guarantee of success and it’s easy to think that if the project fails it’s a waste of time. By comparison, “cadres” enjoy fixed salaries, good benefits, relative job security… It’s stable. Safer. But focusing only on those negative aspects is a mistake. Entrepreneurship yields benefits for individuals, as much as it does the overall economy.
Entrepreneur is a real job
Time invested in entrepreneurial ventures is never wasted. Trying to start your own company will teach you as much about finance, marketing, negotiation skills and project management as a earning a degree – although I do encourage you to get a degree as it will make it easier. Launching a business will force you to gain intimate knowledge of your market, your product and your clients as you woo bearish investors. Even if you fail, the experience gained will prove invaluable to any other project. If you decide to go corporate, it signals to companies that you aren’t just any other employee: you’re a growth driver.
Mauritius already has several schemes to boost entrepreneurship (more on that in my next blog!) But perhaps just as importantly, we need to start treating entrepreneurship as as good a career choice as liberal professions. This begins by raising public awareness about its real benefits and costs for individuals, rather than simply promoting entrepreneurship as an answer to youth unemployment. We need entrepreneurs, period.