The Employment Alternative
Youth Entrepreneurs and the Rise of the Gig Economy
By Jaysen Francis
Brianna West writing in Forbes Magazine refers to us as “permalancers” meaning that we are not quite freelancers but we are also not employed full time. Still others refer to our profession as the “gig economy.” Call it what you may, this is entrepreneurial activity. We are entrepreneurs. As work and occupations evolve people like me will be lecturers, consultants, traders on the stock market and business owners – all at the same time. Let’s face it, there is the belief that millennials were “dealt a bad hand” since the great economic depression.
Governmental organisations such as the United Nations (UN) and various governments around the world have cited the lowest unemployment rates since the Great Recession particularly for young people. For this reason, among many of the young people, especially those born to baby boomers, there is the realization that the definition of a job has to change, ushering in the rise of youth entrepreneurship. To this effect, nearly all of the job and employment expansion being felt currently across various economies can be accounted for through alternative careers. Young people are increasingly getting involved in different alternative careers other than what can be considered as 9-5 jobs. The gig economy, Small Office/Home Office (SOHO) businesses as well as freelancing are becoming the new norm in employment solutions for youth.
Reimagining what a job or a career is and how it is defined is leading to a new wave of small-scale entrepreneurship and business growth with promising new opportunities. This largely explains the emergence of the “gig economy”. A gig economy is an environment where people work in temporary positions as organisations and employers move towards more short-term and flexible contracts.
Over the years, the trend of white-collar full-time employment is getting redefined with more and more millennials opting for contract employment instead of looking for permanent jobs. Low levels of available jobs have greatly contributed to the influx of young job seekers and entrepreneurs in the gig economy. In line with this observation, we can conclude that the trend towards the gig economy has begun and is creating a remarkable change in the creation of employment for youth. According to a study by Intuit, a US-based business and software financial company, about 40 percent of young American workers will be independent contractors and freelancers by 2020. While there is no available data for Trinidad and Tobago, our high propensity to consume western culture may place us in the same ranking. This reflects the shifting business and cultural business environment, especially the perception by young people of what it means to be employed.
There are some factors that have largely contributed to the rise of this way of working in the digital age. Worldwide, the workforce is becoming increasingly mobile with the use of digital gadgets such as phones and computers. This means work can be done from anywhere, a factor which largely decouples work from the location. With the advancement of technology, increasing numbers of people are able to work remotely, from the comfort of home and even across borders; and this flexibility is fueling a rise in this type of work. Due to the digitization of payment transactions, it is also becoming easier for individuals to work from the comfort of their homes and receive payment directly to their mobile phones. It is also easier to transact business through mobile phone money transfers, another factor that has contributed to the rise of the gig economy.
Entrepreneurship is the best answer to youth unemployment. Currently, there are more than 358 million young people around the world that are unemployed and not undergoing any training, according to the United Nations. This is more than the populations of the USA and Canada combined, which shows the seriousness of the unemployment problem. Entrepreneurship plays a crucial role in providing opportunities and job creation in solving the seemingly intractable problem of youth unemployment. An annual Job Creation Survey carried out by the World Economic Forum this year shows that hiring plans by entrepreneurs outpace most of the employers in the job market including governments. The survey indicates that in 2015, 47% of entrepreneurs across the world have plans to expand their workforce compared to large corporations which had plans to expand their workforce by a paltry 29%. This means that entrepreneurs and entrepreneurship have the potential to greatly impact employment rates.
Entrepreneurship has proved to be a good alternative to employment. Young people are increasingly embracing the idea of starting and running their businesses rather than looking for formal employment. The self-employment ambitions are particularly strong in developing markets, like ours, especially in countries that have embraced empowerment for young people such as China. Governments and youth empowerment organisations should provide young people with a conducive environment and financial support to help them to establish their businesses. Governments can also provide incentives such as reduced taxes to young entrepreneurs to help them establish their businesses with ease.
Technology is evolving and advancing almost by the day with numerous developments affecting entrepreneurship. For instance, in the field of Information Technology, fundamental changes have cropped up in recent years. One such change is the emergence of the Internet. The Internet provided a whole new level and platform for advertising and sourcing of ideas for entrepreneurs. Today, a considerable percentage of customers purchase commodities online through the Internet. This poses a great deal changer in entrepreneurship where businesses are forced to advertise online as well as operate online selling of their products to keep up with the competition. This scenario showcases the deep and strong role of technology in modern day entrepreneurship. Today, entrepreneurs have to cope with technology to stay afloat in their areas and keep up with competition, failure of which will result in the collapse of their businesses. As it is said, “innovate or die”.
Two examples come to mind – Matthew Charles Mullenweg who developed WordPress at the age of 19 years while a freshman at the University of Houston, now has a net worth of 40 million. WordPress is one of if not the most popular blogging platform worldwide. Definitely, Matt Mullenweg is a successful youth entrepreneur. Another is David Karp, a web developer and youth entrepreneur. According to Forbes, Tumblr, a popular microblogging and social networking website, is currently valued at $800 million, and Karp’s net worth is more than $200 million. Before developing Tumblr, Karp was working as a Software consultant. Tumblr emphasises customisation to its users and ease of use, features that have made it quite popular among many people worldwide. In Trinidad and Tobago stronger structures are needed to facilitate the development of youth entrepreneurship.
On a whole, governments and non-governmental organisations worldwide have the responsibility to formulate and implement policies and practices that are vital in encouraging and developing youth entrepreneurship. However simple and repetitive this may sound, it will require extensive cooperation and political will to achieve. Non- governmental organisations also need strong dedication on their part, if this feat is to be achieved. All policymakers involved in developing policies and enforcing practices to oversee better and increased youth entrepreneurship should introduce training on entrepreneurship in training institutions to help youth gain entrepreneurial skills. They should also increase funding to entrepreneurial studies to support entrepreneurial curriculum and professional development and to evaluate programme results. It is also necessary for governments to adopt global standards for youth entrepreneurial education.
After providing the necessary entrepreneurial education to youth to enable them to establish their businesses, it is also vital to provide mentorship and guidance to young entrepreneurs to help them to establish their goals and objectives in their businesses. This ensures that young people do not get lost through lack of vision for their businesses and subsequent failure of their businesses. It is also necessary that the governments and concerned organisations provide funding regarding loans to the young entrepreneurs to help them to establish their businesses. Provision of incentives such as reduced taxes and allocation of building spaces for small businesses of young entrepreneurs also comes in handy in helping young entrepreneurs to establish their businesses. It also would be a major boost to young entrepreneurs if governments provided free and strong internet connection which is a major ingredient in today’s businesses. All this must be taken into account if, as a country, we are seriously thinking about diversifying the economy. In the next issue, I propose to look at entrepreneurship and diversification.
Jaysen Francis, is a lecturer and CEO of Shufffran Business Consulting, holds a B.Sc. Business Administration from New Brunswick in Canada and an MBA from the Lord Ashcroft Business School, Anglia Ruskin University.
