Entrepreneurship is increasingly feted by politicians in both the UK and Japan as a solution to the challenges facing young people, with the hope being it will provide them with jobs and personal development opportunities whilst also stimulating economic growth. Yet two recent events held in London highlight how far both countries have got to go before this is a reality.
Big in Japan?
Since the mid-1990s the Japanese economy has performed sluggishly, with the result being a casualisation of labour in many quarters. Young people have been particularly affected, as the large corporations so favoured by Japan prioritise those with the most experience. In the past twenty years the proportion of workers classified as “casual” has gone from being less than 20 percent to over 35 percent. With job insecurity also comes low pay – many part-time workers earn less than $10 an hour. Entrepreneurship represents one way to address these issues, though it is far from a popular solution in Japan.
Speaking at a recent event hosted by the Daiwo Anglo-Japanese Foundation, sociologist Noritoshi Furuichi highlighted the “cultural dampeners” which have inhibited entrepreneurship in Japan. Going it alone and starting your own business is still widely frowned upon, and for the past 60 years the percentage of self-employed people has continued to decline. This has resulted in lots of young people who still live at home with their parents and who postpone getting married, still considered taboo behaviour in many quarters.
Yet rather than causing resentment and discontent, Furuichi argues that young people in Japan are actually happier than their elders, as their prospects have not shrunk, but grown. His reasoning is that with the decline in “jobs for life” young people have been presented with the option of creating their own opportunities, citing the slow but steady growth in social entrepreneurship as a sign that young people are looking for something more meaningful. Furuichi argues that since the Kobe earthquake in 1995 interest in social entrepreneurship has grown. Following the 2011 tsunami, interest accelerated even further, with existing initiatives such as the Entrepreneurial Training for Innovative Communities flourishing. There are signs that a new paradigm is emerging within Japan.
A manifesto for youth enterprise
Young people in the UK face a similar situation in terms of job insecurity and low pay. There are currently 208,000 people on “zero-hour” contracts, which offer no minimum limit on the number of hours worked. Thirty-seven percent of people on these contracts are aged 16 to 24. In addition to this, of those young people in work, two-thirds earn less than £7 an hour. That’s £1.1 million young people aged 18 to 21. This is even before considering that close to an additional one million young people are currently not in employment, education or training.
But the UK differs from Japan in a number of ways. The 2011 riots is testament to the fact that unlike their Japanese peers, young people in the UK are not happy with their lot. The two countries also differ in terms of support for entrepreneurship. The UK government has already ploughed a lot of resource into helping young people set up their own enterprises, with initiatives such as the Start Up Loans scheme and Business in You campaigns. Outside of the government, there are organisations like the Prince’s Trust and Young Enterprise offering business support to young people. The signs are positive – startup rates have increased sharply for young people over the past five years, with entrepreneurial activity for 18- to 29-year-olds rising from around 5 percent in 2008 to 7.5 percent in 2011. Further to this, evidence suggests that a quarter of youth startups are social.
A recent paper entitled ‘Manifesto for Youth Enterprise’ from the RSA and The Royal Bank of Scotland Group argues that even more could be done to show young people how running a business could help them achieve their goals in life. A culmination of the findings from the first year of RBS’s Inspiring Enterprise initiative, the Manifesto contains many ideas which have relevance for all forms of entrepreneurship, including social. It sets out 15 key “principles” designed to help more young people realise their entrepreneurial potential. These include:
- Shining a light on the “everyday entrepreneurs” that young people can more easily relate to and be inspired by, rather than solely “celebreneurs” that may put entrepreneurship on a pedestal;
- Exposing more young people to enterprise-related learning by embedding it throughout school curricula and further education/higher education courses, rather than treating it as a bolt-on exercise;
- Going beyond traditional support such as financial help and advice, to provide young entrepreneurs with hands-on practical help – for example assistance with website development – that would enable them to take their product or service to market more rapidly;
- Boosting demand for the products and services of young entrepreneurs, for example by encouraging large corporations to build them into their supply chains or helping them win contracts with local authorities;
- Encouraging the media to avoid using the term “failure” to describe the act of closing a business – explaining instead how dropping in and out of business is part and parcel of life as an entrepreneur.
With more and more young people turning towards entrepreneurship, and particularly social entrepreneurship in both Japan and the UK, these principles offer food for thought for policymakers and thought leaders in both countries.