Activist: Jobs creation starts with youth entrepreneurship

This article is part of our special report Jobs and Growth.

To reduce youth unemployment, training and education might not be enough, turning young people into entrepreneurs is the solution, Peter Matjaši?, president of the European Youth Forum, told EURACTIV in an interview. 

?Peter Matjaši? is president of the European Youth Forum, an umbrella of young people organisations. Matjaši? spoke to Daniela Vincenti, EURACTIV managing editor.

Youth unemployment is galloping at an unsustainable rate across Europe. As president of the European Youth Forum, how do you perceive the cost of non-youth employment to society?

The costs of youth unemployment and exclusion are becoming increasingly apparent as the impacts of the economic crisis and austerity measures filter down to the most vulnerable in society.

Eurofound, the European Foundation for the Improvement of Living and Working Conditions, conducted research showing that across 21 EU member states, the costs of the exclusion of young people amounted to more than €100 billion.

This study, which just looked at the costs of social welfare payments and the contributions to gross national product that these young people are unable to make, puts a preliminary figure of the cost to society of €14,000 per young person not in education, employment or training [NEET], of which €11,000 represents unpaid contributions and €3,000 represents benefits payments.

The social costs to the young person and society at large are not quantifiable but are numerous (less autonomy, self-esteem, poorer health, poverty and social exclusion, criminality etc).

How do you reintegrate young people in the labour market and provide them with the right skills so that they are employable?

Internships as part of education and apprenticeships as part of vocational education and training can and should be used as means to help to bridge the gap between education and employment for young people.

It is known that countries with dual education systems have weathered the crisis much better and their youth unemployment levels are considerably lower.

Unfortunately, internships (especially those taking place after education) are becoming a widespread practice for precarious jobs for young people with no or little learning involved. This type of internships are replacing real entry-level jobs as nowadays to get a “real” job a young person is required to have already several years of work experience.

Good quality internships and apprenticeships instead would greatly contribute to bridge the skills mismatch gap.

Are there any policies that you think are better than other to reduce youth unemployment?

A standardised youth guarantee policy accompanied with adequate financial investments and monitoring that will offer young people a job, training or retraining within four months of inactivity is what is required to tackle the youth unemployment rate and kick-start the European economy.

Such a policy measure will help young people keep in touch with the labour market and keep updating their skills and competencies, thus contributing to their employability at a later stage.

Youth guarantees that will offer a more tailored approach in helping young persons deal with the structural failures of the labour market will eventually build trust and confidence, and are more likely to strengthen the labour market ties and participation rates for the future.

The youth unemployment problem has been recognised at all possible highest levels (also now G20 has set up a task force to address this issue), now it is time for concrete commitments and actions.

Is training the solution to structural youth unemployment?

If there are only a very limited number of jobs available, training, retraining and education are solutions only of a temporary nature.

The answer is in fostering entrepreneurship – job creation. Commitment to a youth guarantee encompasses a lot of different measures that eventually lead to its overall target – not to leave any young person behind.

Youth entrepreneurship should be part of this guarantee for the young generation, an alternative way to be active on the labour market, get income and realise their potential. However, the number of young people that engage in entrepreneurial activities is still very low.

Entrepreneurship is not only a form of employment but also a way of realising innovative ideas and solutions. Entrepreneurship creates jobs, fosters wealth for society as a whole and particularly via social entrepreneurship, including green entrepreneurship, contributes to community development, supports environmental sustainability and produces social capital.

The number of young people engaged in entrepreneurial activities remains very low. Only a small percentage of young people are actually running their own businesses.

According to the EU Youth Report, only 4% of young people aged 15-24 and 9% of those aged 25-29 in Europe were self-employed in 2009. The main reasons why 15-39 years olds have a preference for employee status rather than being self-employed are that they prefer regular, fixed income; stable employment with fixed working hours; and protection by social security or insurances.

When addressing youth entrepreneurship, the stability and security aspects have rarely been in the centre of the discussions. However it might actually be one of the key ones. First, because in some societies entrepreneurs are perceived having the risk prone or “gambler” nature. Second, because this image might very often be based in the reality – unfortunately in many countries becoming an entrepreneur means taking all the risk for yourself, including health and social protection.

Do you think the institutions will listen?

A renewed investment effort from the EU should recognise that youth organisations are an indispensable channel for supporting active citizenship in Europe and for developing young people's skills and competencies, both for the needs of the labour market and for an active and participatory European society. Young people and youth organisations deserve nothing less.

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