What are we doing to help kids start businesses?

I’m working from home, buried under a foot of snow, as two kids, maybe 13 years old, ring my doorbell.  With the schools closed, the pair decided to get up in the morning and make some money shovelling driveways. It’s noon and they’ve already made $100.

With images of the collapse of Egypt’s dictatorship streaming through our media 24 hours a day, it’s a reminder that the freedom to start your own business, to become a self-directed entrepreneur, is central to a functioning democracy.

Those kids are learning skills at least as valuable as what they might learn in a high-school business classroom. They are not only learning the basics of how to run a business (initiative, negotiations, first-mover advantage), but their experience making money could serve to increase their self-confidence and leave them with the “entrepreneurial itch.”

In contrast, Mubarak’s Egypt relies on a system where new business ideas are often crushed under the weight of bureaucracy and nepotism.  Furthermore, proper business education is reserved for the elite, with only 7.5% of Egyptians reporting ever having taken any type of entrepreneurship course.

In our current economic condition, it becomes imperative for developed countries to remember this fact and do whatever we can to encourage would-be entrepreneurs to start companies. This is not a plea to lower income taxes, or make it easier for giant corporations to expand their hold on our fragile economies, but to empower the most vulnerable in our society to explore their business ideas and create jobs and wealth in the process.

On February 1, the Obama administration announced the launch of Startup America, a massive partnership of private and public organizations devoted to “to help entrepreneurs finance and commercialize innovative ideas, start new businesses, and create jobs.”

Over 20 corporations, including tech giants Google, Intel, Facebook and HP, have contributed resources and money to allow organizations like the Kauffman Foundation increase the quantity and quality of entrepreneurship education.

The Network for Teaching Entrepreneurship is a new non-profit supported by Startup America that provides entrepreneurship education for at-risk youth in low-income communities. The effect of such education will go well beyond creating immediate jobs in neighbourhoods and keeping kids in school. If done right, these programs will instill in kids the skills and confidence needed to become life-long entrepreneurs and idea-chasers.

Here in Toronto, grass-roots entrepreneurship education is alive and well in our most vulnerable communities.  At the yearly pitch competition run by the Young Social Entrepreneurs of Canada in November, the winner was Jam Johnson, Director of the Neighborhood Basketball Association (NBA). Johnson’s program, which is a “free or low-cost” basketball program for kids in the Kingston-Galloway neighbourhood, sought to raise money for the program by selling NBA-branded t-shirts.

What impressed the judges was not Johnson’s social mission, but his insistence that the kids themselves organize the design, marketing and finances on their own.  “My goal is to teach the kids to run a business, learning how to carry themselves on a professional level,” Johnson tells me.

Charlie’s Freewheels is a program devoted to teaching kids how to fix bikes and then sell them for a profit. Twenty-eight students from the Regent Park neighbourhood have been through the program, a number sure to increase as the organization opens its own student-run store on Queen Street East later this year.

Not only do these programs serve to empower kids in poor neighbourhoods, but they help the economy as well. More and more data is being collected to show that supporting entrepreneurship education is one of the best things a government can do in a recession.

A study released last summer by the Kauffman Foundation shows that start-up companies provide the vast majority of new jobs in a community. From a period spanning 1977 to 2005, the report found that, in aggregate, start-ups contributed 3 million new jobs to the American economy every year, while companies older than five years were net job destroyers, to the tune of 1 million jobs lost every year.

A recent report by the UK’s NESTA Foundation confirms this finding.  Their paper, “The Vital 6 Percent,” shows that half of all new jobs in the UK between 2002 and 2008 came from only 6% of the total companies registered in the UK. These 6% were almost exclusively high-tech, “high-growth” start-ups.  The big question is how to turn our current crop of high-school students into the CEOs of our next big start-up companies.

In Ontario, the quality of entrepreneurship teaching is dependent on the quality of the teacher in the classroom. Textbooks are aging, resources are scarce and computers are not nearly as ubiquitous in classrooms as the average person thinks. If we’re serious about addressing our current economic woes, and providing opportunities for our at-risk youth, we should consider investing in entrepreneurship education, framing it as a fundamental freedom in a democracy like ours.

Joseph Wilson
