Youth Unemployment & Social Entrepreneurship

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Youth Unemployment & Social Entrepreneurship

While youth employment is remaining a global challenge and a top policy concern, youth entrepreneurship has been attracting increasing attention of policy makers for its potential to play an important role in facilitating the entry of young people into the labour market.
The ability of youth entrepreneurship to tackle youth unemployment can stem from creating employment opportunities for young entrepreneurs and from generating jobs for other young people who can be employed by the social enterprises. 

What is a Social Entrepreneurship?

Let’s have a look at some numbers first!

Worldwide, there are currently more than 64 million unemployed youth and 145 million young workers living in poverty often employed in informal or temporary jobs.

In the European Union alone, the youth unemployment rate (those aged 15–29 neither in employment, nor in education or training) stood at 12,5% last year, against a total unemployment rate of 6,7% in the same year (EU-27).

Countries of the Central Europe are not doing much better, with the youth unemployment rate remaining closely around the EU average:


Youth Unemployment Rate





Czech Republic




Source: Eurostat. 2019. 

Young unemployed people are a huge waste of human capital that has a potential to contribute to economic growth. The economic loss due to the disengagement of young people who are not in employment, education or training has been estimated to be approximately €162 billion, corresponding to roughly 1.25% of European gross domestic product (GDP) (Eurofound, 2014).

And on top of that, being unemployed at a young age can also have long-term effects when it comes to reduced employment prospects, lower salary and lower level of well-being.
And although youth unemployment is heterogeneous both within and across regions, what is apparent is that youth unemployment and poverty have created multiple challenges tackled by the SDGs.

Did you know?

The economic impact of COVID-19 is set to make the job market more challenging for youth. The ILO (International Labour Organization) reports that in the first quarter of 2020, about 5.4 per cent of global working hours, that is equivalent to 155 million full-time job, were lost relative to the fourth quarter of 2019.

Can social entrepreneurship solve (youth) unemployment?

Social entrepreneurship is a global trend which has arisen out of the great need for social innovations within the community. Traditional institutions are unable to solve all the challenges the world is facing right now, like for example climate issues, demographic challenges, urbanization, aging population, segregation, unemployment and more. And such gaps generate demand for services and products that translate into commercial opportunities. 

Social enterprises often require innovations which youth are also well placed to make. Being able to find a commercially viable solution for a social problem requires innovative thinking and often means taking full advantage of new technologies. Acquiring knowledge about new technologies and tools enables youth to be prepared for future occupations that do not yet exist and that can be created by social entrepreneurs, like for example, diversity designer, university founders, wellness coach, invisible executive, ecosystem advocate, alien experience advisor, nutrient banker, and climate change adaptability agent. 

Social enterprises create jobs, provide socially innovative services and goods, facilitate social inclusion and promote a more sustainable economy and they have also proved their resilience more than mainstream businesses during the economic crisis.

The social economy in the EU is made of 2 million enterprises, representing 10% of all European enterprises, and employs over 14 million paid employees (the equivalent of 6.5% of the working population in the EU).

Youth entrepreneurship has been increasingly regarded as a possible means of tackling youth unemployment, promoting job creation and helping young people unlock their entrepreneurial potential and talents. With traditional forms of employment becoming rarer, it is youth entrepreneurship that might provide a way out of unemployment. 

“Wherever supportive and enabling entrepreneurial policies and programmes are in place, youth social entrepreneurship can leverage the energy and creativity of young people as agents of change.”

Elliott Harris, UN Assistant Secretary-General for Economic Development and Chief Economist. 

Social entrepreneurship is a noteworthy option because it is not a divergence from the conventional entrepreneurship program but, rather, a supplement. Standard entrepreneurship components can be adjusted to enable effectively launching social enterprises.
What makes social entrepreneurship appealing are the benefits outside of the labor market alone. Many donors have goals beyond addressing youth employment challenges and social entrepreneurship programs can make additional progress on these fronts as well. For example, a social enterprise launched by a young person can provide services that increase female safety for women at night in their community’s high traffic areas and, in doing so, produce benefits related to female empowerment.

At the individual level, self-employed young people in the European context possess a different set of values and personality traits in comparison with non-self-employed young people: the entrepreneurial personality seems to be characterised by stronger creativity and innovative tendencies, relatively low risk aversion and more freedom and independence and autonomy.

What we need to do is to encourage young people and nurture a spirit of entrepreneurship from early on in life through taking initiative, showing confidence, calculated risk-taking, creativity, organization and tenacity.

If you are a young person, we encourage you to join the voluntary activities because they can serve as means to obtain necessary skills that will help you one day with starting your own project. 

Be bold and channel your creative energy and capacity for innovation into meaningful initiatives!

Did you know?

European Union support social entrepreneurship through different programs, among which you should pay close attention to:

Erasmus for Young Entrepreneurs is a cross-border exchange programme which gives new or aspiring entrepreneurs the chance to learn from experienced entrepreneurs running small businesses in other Participating Countries (however, it does not grant financial support for running or establishing a social enterprise).

The exchange of experience takes place during a stay with the experienced entrepreneur, which helps the new entrepreneur acquire the skills needed to run a small firm. The host benefits from fresh perspectives on his/her business and gets the opportunities to cooperate with foreign partners or learn about new markets.

This program can be particularly valuable for young entrepreneurs who want to gain valuable skills, develop new or test their ideas and build their network across Europe.

Erasmus+ is the European Union programme for education, training, youth & sport in Europe. Through its various activities, it offers young people numerous opportunities to gain skills and increase their knowledge in terms of entrepreneurship.