- By Chris Kremidas Courtney
Here’s a wake-up call: Entrepreneurship is actually falling in the U.S. Shocked? Entrepreneurship and innovation, however, aren’t the same thing – it’s very possible to have innovation without starting your own venture. And the converse is also true; someone can start a new enterprise without a single innovation. But why does it matter which countries are more innovative and entrepreneurial? Economically speaking, over the next 25 years, it may be all that matters and the world should take note. Globally, there is a tsunami of young people entering the labour force but there just aren’t going to be enough jobs if current trends hold true. Half of India’s 1.25 billion residents are under 25 years old. Estimates show that by 2050 there will be more than half a billion young people in Africa.
In the next twenty years, the world will need about 600m more jobs than we are currently projected to have. The looming crisis is so bad that the World Economic Forum (WEF) ranked “persistent structural unemployment” as the number-three trend of 2014 – ahead of cyber security and climate change. Clearly, the problem is global. This year, an estimated 56% of those younger than 26 years old in Spain were without jobs. In Greece, that number was more than 62%. Nearly a year ago, I quoted Bernadette Segol, the chief of the European Trade Union Confederation, who said: “27m [young] unemployed in Europe see no light at the end of the tunnel, only the light of a high speed train ready to run them over”.
With such a large train on the tracks, to borrow Segol’s metaphor, the country which best prepares its young people to innovate – making their markets more efficient and creating their own jobs through entrepreneurship – will be best positioned to avoid being run over. That’s because the jobs of tomorrow will come from the companies and innovators of tomorrow. According to research in Japan, companies created after 1996 contributed a net 1.2m new jobs. But conversely, older companies have shed 3.1m jobs in that time. This means that a 10 year old in Japan will likely be working for a company that has not yet been founded. And the same is true in the U.S. and in Europe.
Worldwide, education leaders have embraced the importance of teaching STEM subjects – science, technology, engineering and maths. These skills will be essential in the coming, hyper-competitive global workforce marketplace. But entrepreneurship skills are different, more nuanced. They include ‘softer’ skills such as creativity, opportunity recognition, problem-solving and persistence. They are harder to measure – there’s no really good school-based test for these types of entrepreneurship skills because together they are more of a mindset than a skill-set.
In fact, evidence suggests that hard skills such as maths and the softer entrepreneurship mindsets don’t co-exist well at a macro level. Dr. Yong Zhao, a researcher at the University of Oregon, found that while the correlation isn’t exact, the idea exists that countries with higher maths test scores rate their entrepreneurship confidence poorly. And vice versa. Dr. Zhao noted “Putting the two lists together reveals that countries with higher Programme for International Student Assessment (PISA) scores have fewer people who are confident in their entrepreneurial capabilities. Out of the innovation-driven economies, Singapore, South Korea, Taiwan and Japan are among the best PISA performers, but their scores on the measure of perceived capabilities or confidence in their ability to start a new business are the lowest”.
At my organisation – the Network for Teaching Entrepreneurship (NFTE) – we work with school districts in ten different countries to try and teach the entrepreneurship mindset. Our research shows that students who take entrepreneurship classes are more likely to start their own business, are more likely to be employed and earn more on average than their peers. Expanded nationally, this could be a very big deal.
Today, our largest programme – by far – is in China. Our program there has 48,000 students enrolled this year. There are more Chinese students learning about entrepreneurship today from NFTE than there are American or European NFTE students combined. As Chinese schools are run by the national government, having nearly 50,000 students a year, learning the entrepreneurship mindset is clearly a national investment. And while 50,000 students out of a secondary school population of more than 78m can be seen as symbolic, it’s also important.
Fifty thousand annual hopeful innovators and entrepreneurs are not nothing. And ours is not the only program in China. When you consider that it takes just a few companies such as Google (50,000 employees) and Facebook (7,000) and Amazon (130,000) to put hundreds of thousands of people to work, hatching one innovator can spark an entire sector and even an economy. And this is what China has realised.
Even though we know major innovations aren’t random occurrences, through that prism, China’s investment in teaching entrepreneurship is bettering the odds that those innovations – and the connected jobs – will be produced. And this is the lesson for policymakers in other places. In stock metaphors, China is long on entrepreneurship. They, correctly, think of it as a self-fulfilling prophecy.
In the U.S., policy leaders have largely left the business of teaching entrepreneurship to colleges, many of which are private. According to recent findings, 224 U.S. and Canadian colleges and universities offer some type of entrepreneurship program. But otherwise, the approach has been scattered and minimal. European leaders, to their credit, see the opportunity more clearly. The European Union has a plan which states: “Education is key to shaping young people’s attitudes, skills and culture and it is vital that entrepreneurship education is addressed from an early age. Entrepreneurship education is essential not only to shape the mindsets of young people but also to provide the skills and knowledge that are central to developing an entrepreneurial culture”.
But even in Europe, the embrace of entrepreneurship is seen as an add-on to other education tracks. The concepts have yet to embraced and enacted as wholly and deeply as other teaching reforms, such as teaching STEM. It’s not yet clear whether Europe collectively – or individual member states – can or will make entrepreneurship education at early ages a principle of education and reach the numbers China already has. To be successful, education leaders will have to remind themselves, and their business and political leaders, that the combination of hard and soft skills offer the best opportunity to empower tomorrow’s workforce. Entrepreneurship and innovation should be equal partners in that education formula.
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