29/11/2021 - Young people, women and seniors have fewer opportunities to transform their business ideas into reality, according to a new OECD report. They are faced with problems of access to finance, skills and networks that make it harder for them than for other groups in society to start-up their ventures. These "missing entrepreneurs" are costing economies ideas, innovation and jobs.
The new OECD-European Union report "The Missing Entrepreneurs 2021" shows there could be an additional nine million people starting and managing new business in the European Union (EU) - and 35 million across OECD countries - if everyone was as active in business creation as 30-49 year-old men. This could translate into 50% more people engaged in early-stage entrepreneurship in the EU and 40% more in OECD countries. To help close that gap, the additional barriers faced by under-represented social groups need to be addressed. About three-quarters of these "missing" entrepreneurs are women, half are over 50 years old and one-in-eight are under 30 years old.
Youth create fewer businesses in the EU than those aged 50 and older. Nearly one-quarter of the 18 million people involved in starting or managing a new business in the EU in 2020 were more than 50 years old - a greater share than those who were between 18 and 30 years old. More needs to be done to support youth in realising their entrepreneurial potential. Surveys suggest nearly 45% of university students intend to start a business within five years of graduation, yet only 5% of people aged 18 to 30 are actively working on a start-up. This drop-off can be explained by several factors, including skills gaps. Those under 30 years old are only 85% as likely as those older than 50 years old to be confident in their skills and knowledge to create a business.
Women are less active than men in business creation. Over the period 2016-20, fewer than 5% of women in the EU were involved in creating a business or managing one less than 42 months old relative to 8% of men. A similar gap appears in OECD countries where 9% of women were starting and managing new businesses compared to 13% of men. These gender gaps are caused by several factors, including barriers in financial markets, skills gaps and institutional conditions that affect motivations. For example, women are about 75% as likely as men in OECD and EU countries to report having the skills needed to start a business. This gender gap represents a missed opportunity for economic growth.
OECD Deputy Secretary-General Yoshiki Takeuchi said: "A lack of diversity in entrepreneurship is a missed opportunity to create employment and growth in the wake of COVID-19. More funding, investment in skills and support for the diverse needs of different entrepreneurs are critical for creating equality of opportunity for those aspiring to run their own business."
The report explains how inclusive entrepreneurship policy can open up opportunities in entrepreneurship to everyone with an idea for a sustainable business, regardless of their background and characteristics. Harnessing this untapped potential can uncover new ideas, create jobs and contribute to economic growth, which are central to plans for economic recovery.
Much progress has been achieved over the past decade, the report says. However, current policies and programmes do not always adequately address the obstacles faced to entrepreneurship by diverse groups of entrepreneurs.
Three priorities for governments include actions to:
1. Address gaps in finance, such as increasing microfinance designed for people who cannot access traditional loans and investments since there is significant unmet demand for these financial products;
2. Close skills gaps with entrepreneurship training and coaching adapted to the needs of different population groups, e.g. boosting self-confidence of women entrepreneurs; and
3. Use tailored schemes to address systemic biases in entrepreneurship support systems, the greater obstacles faced in business creation by groups such as women, immigrants, youth, seniors and the unemployed, as well as varied local conditions.
Read More on OECD Work on "The Missing Entrepreneurs". Watch the video https://youtu.be/I5rEbbEmCF4.
For further information, journalists are invited to contact Shayne.MACLACHLAN@oecd.org.
Working with over 100 countries, the OECD is a global policy forum that promotes policies to preserve individual liberty and improve the economic and social well-being of people around the world.
OECD - Organisation for Economic Co-operation and Development published this content on 29 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 November 2021 08:59:01 UTC.