Missing entrepreneurs

OECD Observer

Becoming an entrepreneur has become increasingly popular since the economic meltdown of 2008, not least in Europe.

Young people are particularly attracted to starting their own business: 45% of 15 to 24 year-olds say they would prefer to be self-employed than work as an employee. More generally, groups facing labour market exclusion account for the majority of self-employment activities. Of the 30.6 million self-employed people in the European Union in 2014, 24.5 million were women, young people, seniors and people who were born outside the EU or who had been unemployed in the previous year. However, despite high start-up rates, these new businesses tend to have low survival rates and low prospects for growth.

Three factors account for this, according to The Missing Entrepreneurs 2015: a lack of access to financing, structured professional networks and entrepreneurial skills. The report focuses on inclusive entrepreneurship policies, reviewing successful mainstream programmes that enable people from all backgrounds to start and run a business.

One effective approach in the finance area is the Innovative Youth Entrepreneurship programme in Greece, which provides grants of up to €10 000 for business start-ups to unemployed university graduates. Other projects target ethnic minorities, such as the peer-mentoring initiative for Afro-Caribbean business owners in the West Midlands region of the UK. France’s Autonomie et Solidarité programme, targeting the unemployed, invests in new start-ups by previously unemployed people and has led to the creation of more than 2 000 jobs in the Nord-Pas-de-Calais region.

As lack of confidence and poorly developed business networks are important barriers to a successful business, coaching and mentoring projects have been set up in many OECD member countries. The Going for Growth project in Ireland recruits successful female entrepreneurs as volunteer mentors who lead monthly group sessions where women share their business experiences. Of the 60 women enrolled in the 2013 programme cycle, 50 created jobs the following year.

Business start-ups account for only 1.9% of active labour market policy expenditure across the EU, which the report recommends boosting, even if entrepreneurship is not suited to everybody and will not resolve all labour market challenges.

OECD/European Union (2015), The Missing Entrepreneurs 2015: Policies for Self-employment and Entrepreneurship, OECD Publishing, http://dx.doi.org/10.1787/9789264226418-en

©OECD Observer No 305 January 2016

Economic data

GDP growth: -9.8% Q2/Q1 2020 2020
Consumer price inflation: 1.3% Sep 2020 annual
Trade (G20): -17.7% exp, -16.7% imp, Q2/Q1 2020
Unemployment: 7.3% Sep 2020
Last update: 10 Nov 2020

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