Spotlight Exclusives

Transforming Disconnected Youths into Microbusiness Owners and Employees

Connie Evans, Association for Enterprise Opportunity Connie Evans, Association for Enterprise Opportunity, posted on

Unemployment among young adults is plaguing families and communities across the United States, as automation and lack of skills for today’s jobs contribute to limited career opportunities for many high school, and even college, graduates. And those without these credentials face even stiffer challenges. Our research at the Association for Enterprise Opportunity (AEO) has determined there may be a largely unexplored career pathway for these job-seeking millennials – starting their own businesses.

At first, that may sound like a daunting challenge. But our research, accumulated in a recently released study, “Linking Young Adults to Microbusiness: Providing New Pathways to Economic Opportunity,” documents a surprising desire among unemployed, not in school young adults to become entrepreneurs. The study identifies programs that counsel young adults on becoming small business owners, but it’s also abundantly clear that more people must be channeled in this direction, and more public, private, and non-profit resources should be committed to expanding and improving programs to guide them.

Unemployment or under-employment for young adults, especially those in communities of color, are at crisis levels, demonstrating a need for public and private sector policymakers to adopt new approaches to improve career scenarios for them.

The Bureau of Labor Statistics sets unemployment for African American youths ages 16-19 at 32 percent, Hispanics at 20 percent, Asian Americans at 15 percent, and whites at 14 percent. Opportunity Nation, a coalition of businesses, nonprofits, academic institutions and other organizations, says there are 5.5 million youths ages 16-24, who are neither working nor in school across the country. With their hopes for success dashed, many of these disconnected millennials are frustrated and turning to undesirable activities, such as crime and drugs, making the dearth of career opportunities an issue not only for their families and communities, but for our nation.

Furthermore, the longer people remain unemployed or under-employed, the lower their lifetime earnings, starting a cycle that increases reliance on government social programs and reduces potential tax revenues.

Supported by the Charles Stewart Mott Foundation, AEO worked with M&RR Research to conduct unique research on the attitudes of young adults towards starting their own businesses and of successful small business owners who started their businesses when they were young. Six hundred young potential entrepreneurs were divided into two groups – Opportunity Millennials (OMs), who were ages 18-24, and either not working but looking for employment or under-employed, and not in school and with no post-secondary degrees; and On Their Way Millennials (OTWs), 18-24 year olds who either possessed a post-secondary degree or were enrolled in a program to obtain one.

The most significant findings were that 45 percent of OMs were highly interested in starting their own businesses and 59 percent want to own a business at some point in their lives, but acknowledged that they lacked the knowledge, resources and support to do so.

Our society must help them. The microbusiness industry, in particular, can offer young adults training, mentoring, apprenticeships, and possibly hire them, too. There are 26 million microbusinesses across the country, with 11 million of those in underserved communities. Further, disconnected youth can be an important bridge between older generations and today’s technological advancements.

Millennials understand and use digital technology better than the generations before them. Their skills can help to vastly improve the digital capacity for microbusinesses ranging from dry cleaners to bake shops, making these operations more efficient, effective, and profitable. For instance, Chatham Business Association in Chicago offers a program that trains at-risk youth to bring technology advancements to businesses in the area.

Organizations such as Youth Business USA in Oakland and City Startup Labs in Charlotte are operating innovative programs that work with young adults on business fundamentals, financing, critical-thinking, team building, business plan development, and others skills that are essential to starting, sustaining, and working in small businesses.

But more can be done. Non-profits could partner with digital developers to produce apps, and even video games, that in fun, accessible ways inspire and promote entrepreneurship. Small business lenders can facilitate connecting youths to microbusinesses through expanded promotion of their start-up funding and providing resources for training. Political and corporate leaders should consider Youth Bonds, Social Impact Bonds, tax credits, and other revenue producing methods to make expanded entrepreneurship by youths a reality.

The nation must prioritize finding pathways to success for our youth. Where once the American Dream started with a good paying job, now it can also begin with owning or working at a microbusiness.

Connie Evans is president and CEO of Association for Enterprise Opportunity (AEO), the voice of microbusiness in the United States.

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