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Entrepreneurship could be overrated

Wednesday October 23 2019

Younger people growing among us must be given an environment that empowers them

Ma Yun, known professionally as Jack Ma, the founder of Alibaba Group, gives a public lecture on entrepreneurship at the University of Nairobi on July 20, 2017. PHOTO | FILE | NATION MEDIA GROUP 

EMELDA OCHIENG
By EMELDA OCHIENG
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The halcyon days when education in Kenya would get you a ticket on the gravy train might as well be over.

The rate of unemployment amongst well-educated youth in this country is truly mind-boggling. And even those with jobs don’t earn fair wages to afford them a decent standard of living. An emergency in the form of an illness or accident could lead them into debt or utterly throw them off.

Often, entrepreneurship and self-employment are bandied around as solutions to this monumental crisis.

CREATE JOBS

The youth are told to create their own jobs. Bill Gates, Mark Zuckerberg and Steve Jobs are used as examples of how a college degree is not necessary and entrepreneurship is the way to financial success.

According to the International Labour Organisation (ILO), the poorest countries have the highest rate of self-employment.

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The rate in developing economies in Sub-Saharan Africa and Southern Asia is about 72 per cent, whereas in developed economies in North America and Europe, it is about 10 per cent.

Despite its reputation as the home of entrepreneurs, the United States has one of the lowest levels of self-employment.

Only 10.1 per cent of the US population, including those who have incorporated their businesses and those who have not, can be considered as self-employed.

SELF-EMPLOYED

Most of the world’s poor are self-employed. You are more likely to fail than succeed when you venture into entrepreneurship. You are likely to lack social security, earn very little and work longer and harder than in formal employment.

This may sound pessimistic, especially in the face of stories and images of successful entrepreneurs.

Information circulating in the contemporary and social media and motivational talks tends to focus on the few who have made it and overlook thousands of others who did not.

This is referred to as “survivorship bias” — a logical error characterised by a strong focus on successful people, businesses and strategies while ignoring those that fail.

Within this blinkered outlook, we only get to hear from a clique of “the successful” and not those who have failed. Consequently, we get a one-sided view not representative of the ground.

In some cases, a good number of successful entrepreneurs are successful simply because of sheer luck, good timing, genetics, family, environment, background, connections or even shady deals.

Why should they be the only ones who get to speak and get to be heard? What makes their version of truth truer? I believe there is just as much to learn from failure as from success.

PURSUE EDUCATION

Due to our survivorship bias, we disparage those who are not doing well economically without fully taking into account their circumstances.

We scoff at those who chose to pursue education, yet they don’t have jobs.

The dominant narrative surrounding youth unemployment is that a large number of youths are poor and unemployed because they are too entitled, lazy and unimaginative to start profitable enterprises. Instead, they just want to get papers that will land them white-collar jobs.

Nothing could be further from the truth than this.

A staggering number of young people in this country have tried their hand in entrepreneurship and failed — some due to lack of adequate capital, poor infrastructure and forces in the market beyond their control.

For others, competition from established businesses and the infiltration of cheap Chinese products in the market brought them to their knees. Others still have their small business running but don’t make much.

Sometimes hard work and ingenuity are not enough. Circumstances beyond our control — such as market forces, timing and environment — take over.

BILL GATES

Out of one Bill Gates who emerges are thousands of others who were similarly smart, skilled and worked just as hard but failed.

More than half of businesses fail within their first year. Many start-ups, despite their innovativeness, hardly last for five years.

But against the backdrop of a mainstream culture obsessed with material success, fame and anything flashy, these facts are hardly uplifted.

In Kenya, unemployment is a system issue that has no simple answers or quick fixes. The best bet we have is the government taking radical measures to curb corruption, directing resources towards creating job opportunities and providing incentives for businesses to expand, innovate and pay better.

We also need to change the tenor of conversations surrounding unemployment. Instead of solely placing the burden on individuals to create employment opportunities for themselves, perhaps more fingers should point towards the State.

Ms Ochieng is a journalist and filmmaker. [email protected]

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