SDG 8: Decent Work and Economic Growth | SDG 9: Industry, Innovation, and Infrastructure | SDG 4: Quality Education | SDG 10: Reduced Inequalities
Ministry of Skill Development and Entrepreneurship | Ministry of Micro, Small and Medium Enterprises (MSME)
The OECD-EU Youth Entrepreneurship Policy Academy (YEPA), launched in 2023, highlights a significant “intent-action gap” among young people: while 40% express a preference for entrepreneurship, only 5% are actively working on a start-up, with barely half succeeding at launching. This gap is driven by systemic barriers, including a lack of technical knowledge, limited access to finance (due to “thin” credit files), and complex administrative hurdles.
The policy framework identifies five key lessons to bridge this gap and drive the digital and green transitions:
Design Together, Succeed Together: Policies are most effective when policymakers, young entrepreneurs, and business professionals collaborate to ensure support is relevant and practical.
Invest in the Future: Addressing financial barriers requires a mix of microfinance, crowdfunding, and financial literacy training to compensate for a lack of collateral.
AI-Driven Competitiveness: Equipping youth with AI and digital skills is crucial for fostering innovation in an increasingly automated global market.
Diverse Role Models: Showcasing diverse entrepreneurial success stories sparks a wider range of ideas and encourages participation from under-represented groups.
Evaluate to Elevate: Implementing robust monitoring and evaluation mechanisms allows governments to refine policies based on real-world impact.
What is the ‘Youth Entrepreneurship Intent-Action Gap’? It refers to the discrepancy between the high number of young people who want to start a business and the small fraction who actually do. This gap exists because interest alone cannot overcome structural hurdles like lack of professional networks and the high perceived risk that traditional banks associate with younger, less-experienced borrowers. Closing this gap requires “bridging” mechanisms, such as tailored mentorship and government-backed funding streams.
Policy Relevance
While the report studies countries, primarily within the European Union (EU), its insights can be adapted to other countries. For India, with one of the world’s largest youth populations, its pointers are highly relevant to the Startup India initiative and the National Education Policy (NEP).
Strategic Impact for India:
Addressing Structural Barriers: India can bridge the “intent-action gap” by streamlining business registration and embedding financial literacy into the school curriculum to prepare the next generation of founders.
Promoting Green and Digital Growth: Aligning youth-led start-ups with national goals like Digital India and climate action can turn young entrepreneurs into the primary drivers of India’s sustainable development.
Leveraging AI Talent: Providing AI-specific training and incubation programs can capitalize on India’s tech-savvy demographic, ensuring global competitiveness.
Mentorship Networks: Establishing local entrepreneurship networks and showcasing diverse Indian role models can inspire youth in Tier-II and Tier-III cities to pursue job creation over job seeking.
Evidence-Based Policy: Adopting the OECD’s evaluation frameworks would allow the Ministry of Skill Development to assess the long-term impact of its schemes, ensuring they stay aligned with evolving market needs
Follow the full news here: Policy Pointers from the Youth Entrepreneurship Policy Academy