One out of five people in the world is between 15 and 24 years of age and over 85% of these youth lives in developing or transition countries: the global youth population has currently risen to 1.5 billion, with 1.3 billion of these youth residing in developing countries. While the global youth population has risen 10.5% over the past decade, youth employment has only grown by 0.2%, which has resulted in a vast amount of unemployed youth which is only on the increase (Making Cents International Report, p6).
Although youth unemployment is a growing problem all over the world, it is most severe in developing and transition countries. In several developing countries the youth unemployment rate is at least two to three times that of the regular unemployment rate (Egulu 2004). In the last decade the unemployment and poverty rates of many developing countries have increased and there is no sign that this will significantly change in the next few years (Semboja 2007:2). Although there is little detailed information on the socio-economic situation of young people in these countries, youth seem to be bearing a disproportionally large burden in all of this. Consequently youth employment poses one of the biggest social and economic challenges in the world today.
Youth in developing countries attempt to make a living by engaging in self-employment. They generally engage in self-employment enterprise activities with other motives than youth in Europe or the US do. Self-employment is in these countries often considered the only way out of poverty: youth set up a business not to make profit, but to survive. As such youth entrepreneurship has an extremely important economic value, as it creates jobs and hereby provides youth with a possibility be self-sufficient. It also has a social value since it brings youth (back) into the society.
The youth however face several constraints in setting up and maintaining their businesses, even more than adults in the same context do. They face bureaucratic constraints at the governmental level such as a lack of access to finance and appropriate space to set-up their enterprise. In addition they are often not educated sufficiently to run a successful enterprise and lack entrepreneurial experience. As a result, the self-employment rates in sub-Saharan Africa for example are considerably lower for youths than for adults (Chigunta 2002 B: 5- 8; Olomi 2006: 10).
According to, amongst others, the World Bank, ILO and the UN, small-scale entrepreneurship is a way out of poverty that should be encouraged. Their theories are based on the idea that the promotion of entrepreneurship is a means of development, economic empowerment, employment creation and economic dynamism in a globalising world (ECA 2002: 15, Chigunta 2002B, ILO 2008). But although the importance of self-employment and entrepreneurship in a developing context is currently widely acknowledged, this subject is according to Lingelbach and others:
‘The least studied significant economic and social phenomenon in the world today’
In addition there are, according to Frances Chigunta, insufficient efforts to look at entrepreneurship from a youth angle and there is little research that looks at the needs of youth who want to become self-employed (Chigunta 2002).
