Opinion
Raging hormones
Entrepreneurship provides a platform for youths to leverage their new business ideasTejeshwi Nath Bhattarai
It is common to herald the youth as the future of the country, but the difficult reality today is that the future of young people themselves is uncertain. As transformations driven by technology, demographics and climate change sweep the world, labour markets and the world of work are also undergoing significant changes, and their implications will play out during the lives of today’s young people.
Addressing work deficits
The challenges for young women and men are two-pronged: One, there are larger systemic issues in the economy which have a considerable impact over their entry into the labour market and employment prospects. Two, there is a constant need to augment skills according to emerging trends in the rapidly changing world of work. Like their global counterparts, young women and men in Nepal face a number of challenges in their quest for well remunerated quality jobs.
A major determinant of entry into formal sector employment is education. However, educational infrastructures in Nepal are inadequate and inefficient. Furthermore, the propensity to drop out before completing education is high. Policy priority should, therefore, lie in providing access to quality education while simultaneously expanding the reach of educational institutions across the country.
Young people leaving as migrant workers in droves shows that ours is a society where virtually no one can afford to remain unemployed for an extended period. Then there is the increasing precariousness of work. Rising use of fixed term contracts have emerged as an important trend in the labour market for youth alongside the rise of the gig economy. While this does offer flexibility in terms of working hours and the opportunity to combine more than one job, the changes in the nature and setting of work are often times incongruous with the existing framework for the organisation of workers, effective social dialogue, rights at work, occupational safety and health, respect for minimum wages and social protection. Policies should, therefore, aim at addressing such decent work deficits.
Key initiatives
Though important, higher economic growth alone is not the only pre-condition for job creation. To generate adequate productive employment, a move towards formalisation of the economy will be key. Efforts have to be directed towards addressing the concerns of the thousands of youths who are trapped in the informal sector, which is often associated with poor working conditions, low wages and precarious forms of employment.
Increasing productivity of the agriculture sector is similarly crucial. Furthermore, the government should commit itself to creating a conducive business environment to foster investments from within and outside the country and jumpstart sectors like manufacturing that can potentially create a large number of jobs. Boosting overall productivity and skilling the youth to match labour market needs will also be key determinants of job growth.
Entrepreneurship provides a perfect platform for young women and men to leverage their innovative business ideas and bring about disruptive changes in various industries while creating more jobs and generating greater economic activities. However, three challenges have stymied progress towards such an end.
One, low quality education paired with limited skill sets means that young entrepreneurs have not been able to leverage their full potential. Two, owning assets like real estate is a major determinant of access to credit, and therefore, of starting an enterprise. For those who do not own such assets or are going to inherit any, this presents a major constraint towards enterprise ownership and serves to perpetuate existing inequalities. Three, the unavailability of favourable technological and financial infrastructures required to run modern businesses like uninterrupted electricity supply, fast internet service, easy to use and secure digital and online payment services, among others, pose major limitations to aspiring entrepreneurs.
With the rising global trend of automation in low-skilled manufacturing, Nepal is unlikely to be able to bank on cheap labour fuelled export-oriented industrialisation like a number of countries in East and Southeast Asia. Furthermore, large scale out-migration is already projected to give rise to sharp labour shortages in the future. Against such a backdrop, creating enough productive employment will require an integrated and multi-pronged policy intervention which also takes into consideration local, regional and national dynamics.
However, certain common denominators in policy response will have to be comprised of the following: Recalibrating the education system to expand access and augment the quality of education while simultaneously investing to create a workforce that is able to adapt and thrive in the changing world of work, working to address all-round decent work deficits, increasing productivity in the agriculture sector which will raise incomes across the board and generate higher investment creating more and better jobs, creating and sustaining a conducive business environment to raise foreign investments in the economy, easing access to credit—especially for entrepreneurial youth— nd providing technological and financial infrastructure for smooth enterprise creation and operation. While certainly not an exhaustive list, this will nevertheless provide an overarching framework for action in the quest to jumpstart the Nepali economy with youthful spirit.
Bhattarai is a graduate student in international economic policy at Sciences Po, Paris