Govt can nudge young entrepreneurs ahead

There are several points deserving our attention to encourage both Chinese and European youths to jump onto entrepreneurship.

The first is a fighting spirit. We live in a world with enormous material wealth. Europe's long-term prosperity and development ensures its people a comfortable life. China's middle class has grown since the reform and opening-up. Research shows that the total amount of wealth created in the past 200 to 300 years under the market economy makes up more than 90 percent of that in all of history.

No matter how fast material wealth is created, it could never replace the power of spirit. Social progress still needs the fighting spirit of young people. I think this is more essential than the spirit of entrepreneurship. The fighting spirit, which is worth pondering on and advocating for, is reflected in young people's desires for job opportunities and starting their own businesses.

With some financial backing, more youths could entertain the idea of entrepreneureship. Neither in Europe nor China, young people can easily start their own businesses right after graduation. In the West, the most intensive emergence of successful entrepreneurs was at the early stage of industrialization, which testifies to the prosperity of the industrial revolution.

Starting a business can be a test for young people's attitudes toward future risk and uncertainty. If they do not like to face risks, it will be very difficult to convince them into starting their own businesses.

And youths need guidance, especially when deciding on which industry to invest in.

One possibility to investigate further is emerging industries. The development of new technology is of great importance to the booming entrepreneurs of the past three industrial revolutions in 1760, 1840 and 1950.

In these three industrial revolutions, leaders of some enterprises were relatively younger, with an average age younger than that of entrepreneurs from traditional industries.

There are many potential emerging industries youths should follow closely, such as environmental protection and solar energy.

Another category that should be researched is the creative industry. The only authoritative definition is from the United Kingdom, which covers industries that require profound innovation. Its broad definition consists of fashion design, industrial design and industrial technologies as well as many others.

The creative industry is where young people could possibly establish a new product or idea that could contribute to way of life. For example, designing an application that could be used through the Internet that would enhance or streamline daily work could be very popular. Older people may not use the product since they are not familiar with the technology, but young people will continue to develop this industry with the introduction of developed technology. This is a common phenomenon in Europe and China.

Hand-crafted items, such as high-end purses or clothes, shouldn't be overlooked as a potential industry since it has the possibility of raking in huge profits. One of the big obstacles for young people entering this field is that they do not have large-scale capital or technical input. What they have is knowledge and skills. Because of industrial mass production, the advancement of technology and standardization of industrial products, the average product price should be falling. However, the price of making a garment in China with a renowned brand name is still two to three times more expensive than the price of a television.

The reason is these products require attention to detail and special skills, which are irreplaceable.

These are just three recommendations for young people to start. We cannot push them to undertake high risks, but we can encourage them to focus on these industries.

More entrepreneurship will create more jobs. Young people tend to succeed more easily with certain degrees of skills and work experience. A survey indicates that the number of Chinese entrepreneurs without work experience versus the ones with is 4 to 127. It shows that young people are more likely to accomplish their goals with experiences from previous employment. Many successful entrepreneurs in China have gone through this process.

Of course, the government is responsible for helping them enter entrepreneurship, rationally and scientifically.

Young entrepreneurs also need support and help. The government bears the responsibility of social resources distribution. Making macroeconomic policies directly determine the national employment rate. Every government puts full employment at the top of their macro-economic policy.

To fully support entrepreneurship, the government should first make favorable policies and guide the development of emerging industries. It should also encourage various social organizations to support young people's businesses.

Another important step that the government must take is providing more financial support. Lack of funding is still a big problem that prevents most young entrepreneurs from starting their own businesses. It is meaningful and feasible for the Chinese government to provide small loans to young people.

The article is an excerpt from the speech given by Lu Hao, first secretary of the Chinese Communist Youth League, at the recent China-EU Forum on Youth Entrepreneurship.