By Jorge Vinicio Murillo. Entrepreneurship plays a very important role in the economic development and employment generation of Latin American countries. According to the Global Entrepreneurship Monitor (GEM), the overall early-stage entrepreneurship (EER) rate for the Region was 17.6% in 2014 and in general terms, 36% of new entrepreneurs are under 34 years of age. According to GEM data, Latin American youth have a strong entrepreneurial spirit, being one of the regions in the world where young people have the highest entrepreneurial intentions.
In the region, the OER for the youth population was 19% in 2014, which is higher than in other regions of the world and only surpassed by Sub-Saharan Africa. However, despite this dynamic activity, the GEM points out that among young Latin Americans, only 5% manage to maintain their businesses for more than 42 months. This survival rate is significantly lower than the survival rate of new businesses started by adults, which calls for reflection on the need for initiatives and programs to strengthen youth entrepreneurship, not only in the initial stage, but also in subsequent stages (consolidation and exit).
The profile of the Latin American youth entrepreneur is quite particular. According to a research by the Youth Business International Organization, 68% of them are motivated to do business by opportunity and only 32% are motivated by necessity. Almost 70% of them have completed secondary education or post-secondary studies. The source of financing of these young entrepreneurs is mostly from personal savings (52%) and from banks and other financial institutions (26%). This reflects the limited development of other financing mechanisms for entrepreneurship. In addition, these young people develop new businesses in the consumer-oriented services sector (63%), such as retail, hotels and restaurants. Finally, 47% of them are in the upper third of the population's income distribution.
The environmental conditions in which youth entrepreneurs develop and grow their businesses are not entirely favorable. Several obstacles impede greater entrepreneurial development in the region, including the lack of financial support, weaknesses in education and training, some limitations in the development and transfer of Research and Development (R&D), and the need to further strengthen government policies aimed at strengthening entrepreneurship.
In order to promote youth entrepreneurship, the public and private sectors and other civil society organizations have promoted different initiatives to develop young people's capacities, such as mentoring by experienced entrepreneurs, facilitating financing, access to training and coaching, access to technological tools, and the development of public policies and programs to support entrepreneurship. There is still much more to be done, and these efforts developed so far have been insufficient to fully propel the entrepreneurial ecosystem in the region, so it is necessary to generate new strategies that benefit youth entrepreneurship.
Greater coordination of the different efforts made and a greater diversity of initiatives and actions are still required. Public policies related to these programs have just begun to have some kind of effect on the entrepreneurial context in the Region and it is expected that in the coming years their impact will be greater for the good of Latin American youth entrepreneurship and society in general. Furthermore, given the entrepreneurial drive among young people and its tendency to continue to grow, it is extremely important to have entrepreneurship policies specifically aimed at them.
