Youth Surge in the South: A Great Business Opportunity

The world’s youth population (those between the ages of 12 and 24) has now reached a historical high of 1.5 billion – 1.3 billion of whom are in developing countries (World Development Report 2007). Nearly half of the world’s unemployed are youth, and the Middle East and North Africa alone must create 100 million jobs by 2020 to meet demand for work.

Some 130 million people between the ages of 15 and 24 cannot read or write. This enormous cohort of talent and energy in many countries of the South goes untapped. Many youths lack access to quality employment and education opportunities. Yet knowledge of business could make the difference between success and failure for these young people, especially when they come from poor families with few choices. Business is also a great way to help harder-to-reach young people such as child soldiers, young girls, youth affected by HIV/AIDS, gang members, and orphans.

“The youth bulge is happening and it is an enormous opportunity or an enormous challenge: how are all these young people going to have productive and valuable livelihoods and contribute to their communities?,” said Fiona Macauley, founder and president of US-based consulting firm working with entrepreneurs, Making Cents International. “Policy makers are only just realizing they need a change of perspective on health issues, issues of poverty, the education system – all of it needs to respond.”

Micro-entrepreneurship, where risk is low and the amount invested small, offers the most realistic route into business for youth in countries where more formal opportunities are absent. While concepts like micro-credit and social lending have taken off, youth have not received the attention they deserve, according to Macauley. She has also found financial services need to change to encourage youth to save, while also opening up to give them access to credit for micro-entrepreneurship.

To address this problem, Making Cents is organizing a Youth Microenterprise Conference on September 1-12, 2007 in Washington D.C. in order to start building the links and networks between groups working with youth businesses, and to build a global movement for youth economic development. It will tackle three themes: the role of youth, sector strategies, and building partnerships.

“It is important that entrepreneurship is mainstreamed into the school system,” continues Macauley. ”That youth are getting good skills the private sector are looking for: how to budget, costing and pricing, developing entrepreneurial mind sets, problem solving, leading groups, researching, how to be problem solvers. If we can get this into the high school and the elementary school level, imagine how different the workforce would be?”

Other initiatives that are focusing on youth entrepreneurship:

South African Breweries Limited has been providing seed capital to youth businesses run by 18 to 35 year olds through its KickStart program. Successful youth enterprises to come out of the program have included Golden Sunset Fresh Produce, started by 27-year-old Alwyn Jepha to help pay for his law school studies. Starting on a small scale producing vegetables and fruit, the business has grown substantially, making in a month what it once made in a year. The KickStart grant enabled Jepha to buy irrigation equipment and to scale up his operations. At Zanopt, Khetla Leqola has been producing afro-centric optical frame styles, meeting a market need not being met by the global brands. KickStart enabled Leqola to buy the equipment required to produce the frames and run his office.

The Barbados Youth Business Trust has an excellent web portal for youth, with practical tips on starting a youth business and good examples of young people actually doing it. At 29, youth entrepreneur Ailene Harrison-Malcolm found herself unemployed. She had long noticed the lack of clothing for full-bodied women in Barbados, and decided to open her own store, Full Elegance Boutique in 2002. She was able to tap into a mentoring scheme run by the government’s Youth Entrepreneurship Scheme toget a loan. It is this kind of joined up support that youth need.

By David South, Development Challenges, South-South Solutions

Published: May 2007

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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