EY G20 Youth Unemployment

Part 2
Avoiding a lost generation
Ten key recommendations to support

youth entrepreneurship across the G20
Welcome
Contents
Welcome
01
Executive summary
02
Setting the scene
12
Access to funding
20
Tax and regulation
30
Entrepreneurship
culture
36
Developing an
entrepreneurial
ecosystem
Diagnostic
methodology
40
44
Avoiding a lost generation: ten key recommendations to support youth entrepreneurship

across the G20, contains both key recommendations and actionable guidance based on
best practices adopted by governments across the G20. It follows on from our previous
report, Avoiding a lost generation: young entrepreneurs identify five imperatives for
action, where we surveyed 1,000 entrepreneurs on a wide range of possible policy and
other initiatives that would boost their activities.
Of the many and varied repercussions of the 200708 financial crisis, one that rippled
across borders to impact both developed and developing economies was rising
unemployment, an issue that affected young people, in particular. While growth has
picked up in many countries and a new sense of optimism is present through much of
the global economy, the high number of young unemployed has proven a persistent and
deeply entrenched barrier to further progress. Although policymakers around the world
have hunted hard for sustainable solutions, a global youth unemployment rate of 16.1%
tells a story of dreams dashed, ambitions unfulfilled and potential wasted. In this
context, the broader message of economic recovery is one that must hold limited
resonance for a young person without a job, or even the prospect of one.
And yet all is not lost. Once again, the answer lies in the activities of one of the worlds
most precious economic commodities: entrepreneurs. As generators of jobs, supporters
of local communities and pivotal components of more prosperous societies, its no
wonder they are so highly prized by governments across the G20 and beyond. Young
entrepreneurs are of particular importance. Brimming with potential and energy, theirs
are activities if nurtured and supported correctly that can lead to meteoric growth,
jobs and success across societies. So, how can G20 governments help?
An important starting point is the recognition that while a global phenomenon, youth
unemployment varies from one G20 country to another. Low skill levels may be
prevalent in some countries, whereas others enjoy higher skills but limited job
opportunities. Recognizing that there is no one-size-fits-all solution, EY has created a
new guide which provides a framework for assessing the youth employment challenge
in G20 countries. From this analysis, and our own extensive experience with
governments and entrepreneurs, we propose 10 key recommendations to G20
policymakers to consider.
Solving this challenge will not happen overnight. Youth unemployment has penetrated
deep into the G20 and breaking free of its grip requires governments and business to
work together to support the job-creating activities of entrepreneurs. Helping greater
numbers of young people to start and sustain their own enterprises holds the key to a
stronger global economy and the emergence of a better working world: we hope this
report helps accelerate the process.
Maria Pinelli
Global Vice Chair
Strategic Growth Markets, EY
In December 2013, Australia assumed the role as Chair of the

G20; a position that is surrounded with immense responsibility
and complexity but, more importantly, the potential for a
significant and enduring positive impact on the worlds future.
Removing barriers for SME entry and growth
The priorities under Australias G20 chairmanship (sustainable

and inclusive growth, employment, investment in
infrastructure, trade, driving the commercialization of
innovation and increasing the participation of women in the
workforce) are all outcomes that result from building
ecosystems that create and enable high-growth
entrepreneurial small and medium enterprises (SMEs).
Investment in SMEs is essential for the G20 to achieve the 2%
increase in global GDP committed to in 2014.
Access to finance
The G20 has accomplished much since its inception. But we

are still faced with a global employment crisis which must be
addressed with the same urgency and priority as the global
financial crisis, and most importantly we must immediately
implement strategies to address youth employment.
The G20 YEA is very pleased to assist and build on the

acknowledgement of youth and entrepreneurship in the 2013
G20 leaders declaration, B20 human capital taskforce, T20
and Y20 recommendations. We are very encouraged by the
commitment of the G20 employment working group to address
youth unemployment in their employment plans. We extend
heartfelt thanks to Robert Milliner, Mike Callaghan and Holly
Ransom for their leadership, guidance and collaboration. We
hope to see the relationships with these official engagement
groups continue to improve throughout 2014 and into Turkeys
chairing of the G20.
The G20 Young Entrepreneurs Alliance (G20 YEA) is a

collective of leading entrepreneurship non-governmental
organizations (NGOs) representing over 500,000
entrepreneurs across G20 countries and the European Union
that have already created an estimated 5 million jobs. In 2014,
over 400 young entrepreneurs and leaders from 37 countries
selected to represent the voice of the worlds future business
leaders are attending the G20 YEA Summit in Sydney from
18 to 22 July.
We look forward to supporting the Australian Government in
the improvement and implementation of key priority areas,
with a focus on high-growth entrepreneurial SMEs:
Cutting US$1b in red tape

Superannuation clearing house
Crowdsourced equity funding paper
Peer-to-peer lending
Employee share schemes
Building SME skills and capacity
Growing SME digital know-how
We are particularly thankful and excited about the depth,

strength and impact of our collaboration with EY, and we
hope together we will create a positive impact for many
years to come.
Sincerely,
Building the infrastructure needed for the future

Facilitating open trade in goods and services
A strong and vibrant research sector
The Entrepreneurs Infrastructure Programme
The R&D Tax Incentive
Jeremy Liddle
CSIRO SME Engagement Centre
Entrepreneur and President, G20 YEA

Australia
Providing information to make it easier for SMEs to grow

and thrive
Executive summary
reflecting their relative positions on speed of economic growth
and on quality jobs for youth.
Rare is the G20 policymaker who has not sought to address one
of the biggest challenges of our times youth employment. As
an issue that has proved borderless in scope and deep in impact,
it should come as little surprise that there are many government
programs in place around the world that have sought to
address it.
In recognizing the differences in context for the youth

employment challenge across economies, the objective of the
diagnostic is also to guide specific policy recommendations for
governments. To bring these to life, the report presents a
selection of best practice case studies that correspond to the
four quadrants defined in the EY guide to diagnosing youth
unemployment. The best practices reflect the different economic
and employment quality dynamics between quadrants,
showcasing the different ways entrepreneurship policy can be
successfully applied to action our recommendations and support
youth employment.
Leveraging initiatives already successfully deployed in other

countries is attractive and practical. However, conditions in all
countries are not the same, and a program that works in one
environment may need to be customized to be successful in
another. With this in mind, we have developed a guide to
diagnosing the youth employment challenge in G20 countries.
The aim of the diagnostic is first to guide assessment of the type
of youth employment challenge for G20 countries. The
framework shows the relative position of G20 economies across
speed of economic activity or their relative capacity to create
jobs for youth, and across quality jobs for youth reflecting their
performance on the challenge of providing decent employment
for youth. G20 countries are segmented into four quadrants,
Using this new guide, and drawing on our own extensive

experience with governments and entrepreneurs, we have
developed 10 key recommendations as well as supporting
actions for G20 governments to consider.
The EY guide to diagnosing youth unemployment 1

Solid economy;
weaker skills match
Solid economy;
solid skills match
Speed of economic growth
Policy implications:
sustain economic performance;
Focus on skills gap and
employment quality
10.0
9.0
8.0
sustain/grow competitive
advantage
Australia
China
Canada
Brazil
United Kingdom
Germany
7.0
Indonesia
Mexico
6.0
Argentina
improve economic performance;
Focus on skills gap and
employment quality
India
4.0
Japan
Russia
Turkey
5.0
Weaker economy;
weaker skills match
United States
France
South Korea
Weaker economy;
solid skills match
advantage
3.0
Italy
2.0
South Africa
Saudi Arabia
1.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
Quality jobs for youth
1. The axis Speed of economic growth reflects the strength of labor market conditions for youth. A higher score corresponds to stronger conditions. The axis Quality
jobs for youth shows economic vulnerability; education levels and disparity in employment between youth and adults in the labor force. A higher score corresponds to
relatively better quality jobs for youth. The size of the sphere in the chart reflects the relative size of the youth population across G20 economies.
Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20
Our messages to G20

governments
Access to funding
1
Capital without mentorship is lost capital
Best practice case studies
Key recommendation: Create funding mechanisms, either

government run or government backed, that make mentorship
and financial education a condition of funding.
Futurpreneur Canada (Quadrant 1)
Actions
Provide financial literacy education for prospective young
entrepreneurs alongside mentorship and funding support.
Fund mentoring programs, and/or invest in mentoring
programs through technology-focused, or skills-focused,
government departments.
Tie start-up funding to mentoring by requiring young
entrepreneurs to have a mentor at the early stages of their
business for at least two years that involves regular
engagement.
Match the right mentor with the young entrepreneur by
developing a pool of mentors that can be drawn upon to match
with the relevant entrepreneur.
Employ innovative financing strategies to multiply the scope
and potential impact of mentorship programs. Launch
mentoring/financing support streams that cater to different
business needs of young entrepreneurs.
Canada
United States
Entrepreneurial Mentor Corps (EMC) (Quadrant 1)
Brazil
Start-up Brasil (Quadrant 2)
South Korea
Korea Fund of Funds (Quadrant 4)
Argentina
Fundacin Impulsar (Quadrant 3)
Facilitate access to collateral-free capital for young

entrepreneurs along with grants and other assistance as
appropriate, to promote inclusive entrepreneurship.
2
Access to alternative funding is critical
Key recommendation: Create strong relationships and provide

incentives with venture capitalists (VCs), incubators and business
angels to develop or create initiatives that enable alternative
sources of capital
Understanding Finance for Business initiative

(Quadrant 1)
United Kingdom
Actions
Provide advice to small businesses on raising equity finance
from business angels and VCs.
Provide incentives to venture capital and angel investors to
invest in start-ups.
Create a community of angel-based investors.
Support friends and family in investing in small business
through access to tax incentives, credits, deductions and
incentives.
Encourage start-up funding by providing governmentguaranteed loans to VCs.
Create a strong network of accelerators and incubators to
support high-potential young entrepreneurs.
Collaborate with the private sector to support online
crowdfunding and create new initiatives in a competitive
environment, including equity crowdfunding.
United Kingdom
Seed Enterprise Investment Scheme (Quadrant 1)
United States
Early Stage Innovation Fund (Quadrant 1)
Canada
Canada Accelerator and Incubator Program (Quadrant 1)
European Union
EU Venture Capital Fundraising Rules to Benefit SMEs
Germany
German Accelerator (Quadrant 1)
China
Incubators for returning students (Quadrant 2)
Australia
ScreenWest initiative (Quadrant 1)
3
Public funding matters
Key recommendation: Sponsor start-up growth with low-cost
funding for targeted groups.

United Kingdom
StartUp Loans Scheme (Quadrant 1)
Actions
Assume youth are in the start-up phase and need finance.
Provide government funding support to start-ups.
Russia
Internet Initiatives Development Fund (Quadrant 4)
Foster start-up programs mentored by academic institutions

by directly investing in these institutions.
Develop an entrepreneurial support pipeline starting with
online training, workshops, then peer-to-peer networks,
mentorship opportunities, customer linkages and export
readiness.
Boost female-led start-ups by providing government funding.
Russia
Skolkovo Innovation Center (Quadrant 4)
Japan
Female Youth Entrepreneurship Program (Quadrant 1)
Adopt a coordinated approach to start-up financing.
South Africa
Finance for Youth-Owned Businesses (Quadrant 3)
4
Entrepreneurs still need banks to keep
credit moving
Key recommendation: Create a new class of loan for small
businesses and young entrepreneurial firms that offers targeted
funding to meet expansion capital needs.

India
Micro and small enterprises (MSE) business finance

support (Quadrant 3)
Actions
For the Ministry of Finance or Commerce to establish and
aggregate microfinance in a single site for one stop access.
Provide loans particularly focused on propelling startup
growth and funding, or referrals to microfinancing institutions
that do.
South Africa
South African Microfinance Apex Fund (Quadrant 3)
Brazil
Banking on Women initiative (Quadrant 2)
Reduce the financing gap for female entrepreneurs by offering

targeted funding from banks.
Work with banks to provide credit to SMEs specifically creating
new jobs for young people.
Provide intensive skills-based training and bank funding for
young entrepreneurs.
Italy
SME credit support (Quadrant 3)
Saudi Arabia
Loan packages for young entrepreneurs (Quadrant 3)
Qredits
The Netherlands
Tax and regulation
5
Targeted tax and business incentives are highly
important to supporting young entrepreneurs
in scaling their businesses
Key recommendation 1: Encourage investment in start-ups by
offering tax benefits.

Key recommendation 1
United Kingdom
Seed Enterprise Investment Scheme (SEIS) (Quadrant 1)
Actions
Identify and encourage investment schemes best able to
target support on youth entrepreneurs.
Canada
Small business personal income tax credit (Quadrant 1)
Develop tax incentives to support and advance these schemes.

Develop tax incentives to encourage youth job creation.
Key recommendation 2: Enable young, high-growth
entrepreneurial firms to scale up through amplified support for
market access.
Actions
Australia
Early Stage Venture Capital Limited Partnerships

(Quadrant 1)
Turkey
Business angel tax incentives (Quadrant 3)
Drive a government procurement scheme which includes

youth entrepreneurs as a targeted supplier.
Argentina
Support enterprise collaboration, and procurement

opportunities, between high-growth young entrepreneurial
firms and market-leading corporates.
Youth Employment Tax Incentive (Quadrant 3)
Enable access to export markets including through export

financing initiatives.
Key recommendation 2
France
Pacte PME SME Pact (Quadrant 4)
South Africa
Corporate Small Business Development Forum

(Quadrant 3)
Brazil
Lei Geral Policy (Quadrant 2)
6
Support global mobility for young
entrepreneurs
Key recommendation: Encourage top international talent by
changing visa rules and offering funding support.
Actions

United Kingdom
Graduate Entrepreneur visa (Quadrant 1)
Canada
Support international student mobility and introduce G20

multi-lateral visas.
Relax G20 business visa restrictions among G20 countries.
Promote immigrant entrepreneurs by linking them to funding
institutions and business incubators.
Start-up Visa Program (Quadrant 1)
France
Entrepreneurship visa (Quadrant 4)
Promote inbound start-up activity by providing relocation

funding support.
7
Complex and burdensome rules in areas such
as tax hold back young entrepreneurs
Key recommendation: Simplify and streamline tax
administration to ease administrative burdens on young
entrepreneurs.
Actions

United Kingdom
Creation of the Office of Tax Simplification (Quadrant 1)
France
Develop effective instruments to measure administrative and

compliance burdens.
French 2014 reforms to simplify the administrative code

(Quadrant 4)
Simplify tax rules and administration to ease burdens.

Improve support and guidance available to
Entrepreneurship culture
8
Positive mainstream views about
entrepreneurship are needed to attract
young people
Key recommendation: Create a positive narrative around
entrepreneurship to help engage young people from an
early age.

Brazil
Startups and Entrepreneurship Ecosystem Development

initiative (Quadrant 2)
France
Actions
Invest in initiatives that develop market leadership in specific
areas (e.g., innovative technology) for the country or region,
targeting and enabling young entrepreneurs to flourish at the
start-up stage, and that promote the value of entrepreneurship
to society and in particular youth.
Promote entrepreneurship opportunities through an
integrated approach, combining government and industry in
particular.
Target and educate unemployed youth about the opportunities
entrepreneurship can bring them.
French Tech certification program (Quadrant 4)
South Africa
Youth Entrepreneurship Promotion and Awareness

Programme (Quadrant 3)
Indonesia
Young Entrepreneur Program (Quadrant 2)
Publicly celebrate young entrepreneurs success and

international promotion of domestic start-ups and
entrepreneurial firms.
Integrate media/cultural campaigns with a broader national
strategy that promotes the link between job creation and
entrepreneurship.
9
Encourage a national, regional and local
culture of entrepreneurship
Key recommendation: Encourage and foster hubs, incubators,
accelerators and networks to bring relevant talent together.
Actions
Start early. Influence the discussion among young people
while they are still in school and at university. Promote
through an outreach program.
Promote organizations and environments that will positively
influence public perception of entrepreneurship.
Bring together innovators and commercial organizations to
showcase high-tech start-ups.
Launch initiatives to promote a culture of entrepreneurship
linked to SMEs.

Canada
Youth Entrepreneurship Fund (Quadrant 1)
Australia
Innovate NSW (Quadrant 1)
Germany
Building on SMEs initiative (Quadrant 1)
Mexico
The National Entrepreneurs Institute (Quadrant 1)
Encourage national and local entrepreneurial and networking

associations.
10
Developing an entrepreneurial ecosystem
10
For many of the recommendations and actions
to have sustainable impact they need to work
as part of a regional ecosystem, and within a
regional ecosystem framework that fosters and
attracts a critical mass of talent, capital and
most importantly entrepreneurial leaders
Key recommendation: Create the foundation for a regional

entrepreneurial ecosystem to flourish.
Silicon Valley start-up ecosystem (Quadrant 1)
Actions
Provide an overarching ecosystem framework and a flexible
funding model to support regional entrepreneur ecosystems.
Russia
Skolkovo Innovation Center (Quadrant 4)
United States
Israel
Aviv-Yafo start-up ecosystem
Provide funding for a lead organization or consortia of

organizations at the regional level that includes
comprehensive entrepreneurship ecosystem indicators.
Provide funding to regional organizations and have them work
within a regional alliance model comprised of all entrepreneur
service providers (non-profit organizations); colleges and
universities; and all levels of government. They operated
within a coordination framework and meet on a regular basis.
Emphasize the pillar of entrepreneurial education and skills
development for the 21st century.
Collaborate with business to deliver more robust testing of
entrepreneurs ideas and bring commercially viable
opportunities to market.
Identify a short list of key issues challenging G20 countries
(e.g., trade, export, clean energy, food supply) and create
incentives to attract young entrepreneurs across the G20 to
solve these problems.
11
Setting the
scene
The global challenge

Economies may be growing and deficits may be starting to fall
but for millions of people around the world who remain locked
out of the jobs market, the economic recovery must seem a far
way off. A look at the numbers tells its own grim story. In
January of this year, the youth unemployment rate in the OECD
stood at 15.7%2 while the rate in the EU28 was 23.4%,3 with
only slight falls in both cases from the previous year. In the G20
countries, youth unemployment stood at 16.1%.4
Youth unemployment also differs in character from one country
to another. In the G20, some face issues of low skills levels,
while other countries youth may have high skills, but few job
opportunities to match. With no one-size-fits-all solution
available, it should come as little surprise that despite the efforts
of policymakers to help more young people back into work,
youth unemployment surely one of the most invidious
repercussions of the financial crisis remains one of the
greatest challenges for G20 governments to still address.
Youth unemployment across the G20 countries (ages 15 to 24)
Argentina
Australia
Brazil
Canada
China
European Union
France
Germany
India
Indonesia
Italy
Japan
Mexico
Russia
Saudi Arabia
South Africa
South Korea
Turkey
United Kingdom
United States
0.0%
10.0%
2013PE
20.0%
2012
30.0%
2010
40.0%
50.0%
2006
Source: Research Global Reports - Global Employment Trends 2014: supporting data sets,
ILO website, http://www.ilo.org/global/research/global-reports/global-employment-trends/2014/
WCMS_234879/lang--en/index.htm, resource list 3 February 2014. PE = preliminary estimates.
2. OECD unemployment rate falls to 7.8% in November 2013, OECD press release,
http://www.oecd.org/std/labour-stats/HUR-Jan14.pdf, 14 January 2014.
3. January 2014 Euro area unemployment rate at 12.0%, EU28 at 10.8%, Eurostat news
release, http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/3-28022014-AP/EN/328022014-AP-EN.PDF, 28 February 2014.
4. Philippe Egger, An ILO Note to the G20 Task Force on Employment, International Labour
Organization, http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/
genericdocument/wcms_190699.pdf, September 2012, page 2.
12
Youth unemployment is now a ticking bomb for all governments, both from developed
countries and emerging countries. In the 21st century, the jobs we need to create will come
neither from the big corporations nor from government, but they will come mainly from
entrepreneurs who represent 66% of job creation within the OECD and 85% within the EU.
Grgoire Sentilhes, President of NextStage and co-founder of the G20 Young Entrepreneurs
Alliance, representing the Journes de lEntrepreneur (JDE) in France
Governments nonetheless have a wide range of approaches at

their disposal. In the years immediately following the financial
crisis of 200708, many focused on the renewal and
improvement of infrastructure. An important current approach is
to look for new fields of activity, and to encourage job creation
through economic diversification. Another is for governments to
offer tax relief and other financial incentives to SMEs in their
early years of growth and development. These approaches can
all be effective in providing new job opportunities. However,
there is no guarantee that they will have a significant impact on
the specific problem of youth unemployment.
Vocational education and training: apprenticeship

schemes
Kicking away the career ladder
The success of the apprenticeship model in Germany, a country

with relatively low youth unemployment during the recession
(8.1% in 2012), has encouraged other G20 countries to
introduce specific measures to support apprentices in the
context of the recent economic slowdown.8 G20 countries have
responded by offering tax and other financial incentives:
Australia awarded retention bonuses to companies
contemplating dismissing their apprentices; France granted
one-year exemptions from paying social security to firms hiring
apprentices; and Mexico increased funding for training grants.
Brazils Professional Apprenticeships Plan calls on all large and
medium-sized enterprises to hire apprentices to a minimum of
5% of the workforce.9 The UK and Italy recently introduced
reforms to increase the number of apprenticeships.
Young people have suffered far more from the recent recession
than their older counterparts in that they face a much higher
probability of being unemployed when in the labor force and they
are more often employed in precarious jobs.5 According to the
OECD, in Q4 there were four G20 countries Indonesia, Italy,
Mexico and Saudi Arabia in which the youth unemployment
rate was over four times higher than that for adults over the age
of 25.
Even for those young people in work, problems often remain.
The ILO report, Global Employment Trends for Youth 2013,6
pointed out that many young people are working in low quality
jobs that are insecure, poorly paid, with irregular hours and
minimal job satisfaction that do not make good use of their
qualifications and skills. As economic growth in the G20 begins
to return, there is a need to repair the damage and look for
lasting solutions to youth unemployment, in order that the
generation so badly affected does not remain at a permanent
disadvantage in the labor market. One of the OECDs initiatives is
to promote potential long-term solutions to youth
unemployment, which include apprenticeship schemes, youth
guarantees, measures to promote youth entrepreneurship.7 In
this way, it is seeking solutions that emphasize employment
quality and a close match between jobs and skills.
Vocational education and training is designed to help young

people navigate the transition from education to work. It could
include employment at relevant businesses under arrangements
such as internships or apprenticeship schemes. Ideally, these
would involve new economy businesses such as those in digital
media and data analytics. In these ways it increases
employability, matching and adapting young peoples skills to a
valued type of work.
One problem in following the German apprenticeship model,

however, is that it requires a similarly supportive culture, which
is hard to achieve without adopting key aspects of German
industrial life and education. For example, the UKs initiative to
adopt and transplant the German model has encountered
problems because of a lack of commitment from industry, and
because the education system provides no clear vocational
track.10
5. The OECD action plan for youth: Giving youth a better start in the labour market, OECD, May 2012, p. 2.
6. Global Employment Trends for Youth 2013: A Generation at Risk, International Labour Organization, http://www.ilo.org/global/research/global-reports/global-employment-trends/youth/2013/
WCMS_212423/lang--en/index.htm, 8 May 2013, page 42.
7. The OECD action plan for youth: Giving youth a better start in the labour market, OECD, May 2012, p. 2.
8. The challenge of promoting youth employment in the G20 countries, OECD, http://www.oecd.org/els/emp/50304960.pdf, May 2012.
9. G20 Task Force on Employment: Addressing employment, labour market and social protection challenges in G20 countries: Key measures since 2010, OECD, http://www.oecd.org/els/emp/
G20_2013_Report_E_Russia130703.pdf, p.5.
10. Keeping up with the Schmidts, The Economist, http://www.economist.com/news/britain/21601247-attempts-build-snazzy-german-style-apprenticeship-system-crash-cultural-and-economic,
26 April 2014.
13
Youth guarantees
Youth entrepreneurship
The youth guarantee is a means of tackling youth unemployment

and which entitles young people to support in the labor market.
It was first implemented in the 1980s and 1990s in Scandinavia,
and its main objectives are to promote labor market integration
and prevent long-term youth unemployment.11 Of the G20
countries, Germany has the most mature youth guarantee
program and it has now been adopted as a principle by the EU as
a whole. European Commission (EC) has recently called on EU
Member States to ensure that all young people under 25
receive a good quality offer of employment, continued
education, an apprenticeship or a traineeship within four months
of leaving formal education or becoming unemployed.12 This
offer is then to be adapted to each individual need and situation.
Entrepreneurship gives young people an opportunity to take the

initiative in creating their own employment, and to define their
work so that it matches their own skills and interests.
Encouraging entrepreneurship in young people is an ever more
important way of harnessing their enthusiasm, energy and
ambition to contribute to economic development.13 If their
initiative is successful, they can then contribute benefits more
widely to society. It is generally accepted that entrepreneurs
create jobs, increase innovation, raise competition and are
responsive to changing economic opportunities and trends.14
Young entrepreneurs also can also act as role models for their
peers and, by their own companys operations or more
specifically through mentoring, encourage others to follow
their example.
It remains to be seen how successful the EU will be in

encouraging Member States to adopt this policy. It is also
uncertain whether it will make a major contribution to youth
employment in those G20 countries outside the EU that do not
share the social market economic model of Scandinavia.
11. lobal Employment Trends for Youth 2013: A Generation at Risk, International Labour Organization (Geneva),
http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_212423.pdf, p. 66.
12. Youth Guarantee: Making It Happen, European Commission conference, 8 April 2014.
13. Fostering Future Entrepreneurs, International Labour Organization,
http://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---ifp_seed/documents/publication/wcms_175469.pdf, accessed July 2014, page 1.
14. Francis Green, Youth Entrepreneurship: A background paper for the OECD Centre for Entrepreneurship, SMEs and Local Development, OECD,
http://www.oecd.org/cfe/leed/youth_bp_finalt.pdf, 2013.
14
The EY guide to diagnosing youth

unemployment
In Figure 1 we present the EY guide to diagnosing youth
unemployment, a new tool which highlights the different policy
challenges each country faces, reflecting the underlying
dynamics of the economic situation and youth employment.
There are two coordinates: the speed of economic growth and
quality employment for youth. Speed of economic growth
combines the following data about a countrys young people:
their participation in the labor force; their unemployment rate;
their inactivity rate; and their employment to population ratio.
Quality jobs for youth measures factors such as education levels
of youth in the labor market, economic vulnerability and the
share of youth unemployment in total unemployment. G20
countries are scored out of 10 on speed of economic growth and

quality jobs for youth, which shows their performance relative to
other G20 countries on these dimensions.15 A high score
indicates that the countrys position is a relatively favorable one.
The tool also includes a measure of the relative scope of the
Youth Employment Challenge across G20 countries, represented
by the size of the total youth population by country (i.e., those
aged from 15 to 24).
G20 members are positioned on the chart, and represented by a
sphere representing the size of the youth population. For
example, Australia and Canada have positive scores on both the
speed of economic growth and on quality jobs for youth, while
Italys scores are by contrast relatively poor. These countries
are therefore positioned in diagonally opposite quadrants while
on the chart.
Figure 1

10.0
Australia
China
9.0
8.0
Canada
Brazil
United Kingdom
Germany
7.0
Indonesia
Mexico
6.0
United States
Argentina
Russia
Turkey
5.0
India
4.0
Japan
France
South Korea
3.0
Italy
2.0
South Africa
Saudi Arabia
1.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
15. Scores in the diagnostic show the relative position of a given G20 country relative to other G20 countries only. Data for other economies is not included in the scoring system.
15
Implications for government and policy

development
In Figure 2, we present the EY guide to diagnosing youth
unemployment. It analyzes the appropriate response for each
country to its own youth employment problem, given its position
on the chart. The tool classifies G20 countries into four
quadrants, reflecting their relative economic strength and ability
to provide quality jobs for youth. Indonesia, for example, has a
solid economy but shows softer performance on its current
ability to provide quality employment opportunities for its
young people
This assessment suggests distinct implications for governments
and for policy development across the G20. For example, best
practice policy examples for Indonesia will be different from
those for France or South Korea, which show relatively strong
performance on quality jobs, but softer economic conditions.
Policymakers in government need to take account of the present

conditions of youth employment in their own country and frame
their policies accordingly. They will need to fit their overall
approach into their respective national socio-economic context
and specific development challenge.16 The best practice
examples in this report, which are classified by quadrant,
exemplify the differences in successful policy application,
reflecting economic and employment quality circumstances.
There is clearly no easy solution to the problem of youth
unemployment. Any approach must address several
components, such as government initiatives to diversify industry,
promote apprenticeships, offer development stage funding and
tax relief, use education as a driver for change, and foster a
culture of entrepreneurship. The approach must also take
account of the particular character of youth unemployment in
each country, so that the governments response is targeted and
appropriate. Entrepreneurship, however, holds many of the
answers.
Figure 2
focus on skills gap and
employment quality
10.0
9.0
Solid economy;
weaker skills match
Solid economy;
solid skills match
8.0
focus on skills gap and
employment quality
advantage
7.0
6.0
5.0
4.0
3.0
Weaker economy;
weaker skills match
Weaker economy;
solid skills match
advantage
2.0
1.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0 10.0
16. James Zhan (UNCTAD, Director, Division on Investment and Enterprise), Entrepreneurship and productive capacity-building, for Investment, Enterprise and Development Commission: Sixth
session, High-Level Segment on Youth Entrepreneurship for Development (Geneva), http://unctad.org/meetings/en/Presentation/cii2014_Zhan02_en.pdf, 28 April 2014.
16
Not only has entrepreneurship proved a fertile source of job

creation, with entrepreneurs accounting for 67% of new jobs
across the G20,17 it also drives future economic growth and
helps establish stronger, more prosperous communities.
However, young entrepreneurs themselves are concerned at a
lack of recognition of this reality, and that it is unnecessarily
difficult for them to establish their businesses. In EYs G20
Entrepreneurship Barometer 2013, we found that only 15%
reported their own country had a culture that fully supported
their efforts.18
The policy priority for all the G20 countries must be to create
and maintain sustainable entrepreneurship ecosystems. These
will encourage young people to start their own businesses and
shape them into high-quality working environments, developing
their own skills together with those of their employees. Such an
initiative should be a long-term joint venture, between
government, business and the young entrepreneurs themselves,
with the ultimate goal of increased and sustainable job creation
and radically lower youth unemployment.
17. Paul Wymenga, Dr. Viera Spanikova, et al., EU SMEs in 2012: at the crossroads Annual report on small and medium-sized enterprises in the EU, 2011/12, Ecorys for European Commission,
http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/files/supporting-documents/2012/annual-report_en.pdf, September 2012, page 15.
18. Exceptional Extras, January 2014: G20 Entrepreneurship Barometer 2013 - Engines of growth, EY website,
http://www.ey.com/GL/en/Services/Strategic-Growth-Markets/ey-exceptional-extras-january-2014---G20-entrepreneurship-barometer-2013, accessed July 2014.
17
Defining best practice

There are many examples of best practice from across the G20
which are targeted at enabling entrepreneurship and creating
more jobs for young people. Furthermore, best practice for a
particular economy at a given point in time is defined by
economic circumstances, the strength of entrepreneurial
ecosystem and previous best practice examples. In this report we
investigate and showcase a selection of best practice initiatives
from across the G20 and present evidence of their progress so
far. We distill what is important for G20 governments to consider,
and list clear actions for them to deploy in their respective
countries. We also use the EY guide to diagnosing youth
unemployment to classify best practices according to economic
and employment quality drivers.
In the G20 Entrepreneurship Barometer 2013,19 we explored
the concept of the power of three,setting out how
governments, entrepreneurs and the larger corporations can
work cooperatively to create thriving entrepreneurial
ecosystems. The Barometer surveyed the views of 1,500 young
entrepreneurs from across the G20, capturing and drawing
together their insights. These young people considered the rate
of progress within each countrys entrepreneurial environment,
as well as identifying key enablers and obstacles.
To provide the context for the best practice case studies that
follow, we have summarized the results of our survey within each
of three main pillars: funding, tax and regulation, and culture.20
In each, we have set out case studies and key messages to G20
governments, taking into account conclusions drawn from our
diagnostic tool.
Getting labor working in

developing countries
I have been leading and supporting EY engagements on
job creation and employment generation across the
emerging markets but there is a huge amount still to do.
For example, according to the World Banks World
Development Report 2013, around 600 million new jobs
will be required over the next 15 years to support a
growing workforce.
It is important to note that in most emerging economies, 9
out of 10 jobs are created by the private sector, which is
the foundation of any thriving economy. We have
developed a private sector development framework, in
collaboration with governments and international
development partners, to drive inclusive entrepreneurial
growth through job creation. Entrepreneurship is
particularly vital to the future of developing countries
because in the coming years, they must rebalance their
economies toward greater domestic consumption, import
demand and higher-value business activity.
The creation of an environment in which entrepreneurship
can flourish will be an important step toward achieving
these objectives, as will the need to empower the next
emerging market: women. With nearly one billion expected
to enter the workforce over the next decade, women are
increasingly seen as the engine of the next wave of
economic growth. Governments have a vital role to play
in facilitating and encouraging this entrepreneurial
development and funding ecosystem. In doing so, they will
help make it far more likely that new businesses take root,
delivering the sustainable jobs and growth so vital for
accelerated development and the beginning of a better
working world.
Rohan Malik
Government and Public Sector Emerging Markets
Leader at EY
rohan.malik@in.ey.com.
19. The EY G20 Entrepreneurship Barometer 2013: The power of three: governments, entrepreneurs and corporations, EY website,
http://www.ey.com/GL/en/Services/Strategic-Growth-Markets/The-EY-G20-Entrepreneurship-Barometer-2013, accessed July 2014.
20. Avoiding a lost generation: Young entrepreneurs identify five imperatives for action, EY, produced for the G20 Young Entrepreneurs Alliance Summit, Russia, June 2013
http://www.ey.com/Publication/vwLUAssets/Avoiding_a_lost_generation_June_2013/$FILE/Avoiding_a_lost_generation_LoRes_FINAL.pdf.
18
I am a young entrepreneur, and

heres how you can help me
I am innovative, I have a
global mindset, I want to
learn. I seek out advice and
support when it is available.
The young entrepreneurs of the G20 hold the key to

solving our youth unemployment problem, but we
must help them to achieve their potential. Their key
concerns are as follows:
on my community and
bolster the economy by
creating jobs. I am a young
entrepreneur.
I need help with

access to funding
I need training
73%
66%
say access to funding

remains very or
say entrepreneurial skills need
their countries.
I need a more
supportive culture
I need my contribution
to be recognized
51%
expect government
programs providing
education, funding and
high impact.
I need innovative
funding
49%
believe innovative
funding platforms
will accelerate
entrepreneurship.
I need support for

those who invest in me
41%
support tax incentives

for investment in small
businesses.
50%
think the promotion of

entrepreneurs role in
creating new jobs will
have a high impact on
entrepreneurship in G20
countries in the next
three years.
I need a streamlined tax and

regulatory system
I need society to
tolerate failure
rank a reduced burden of

government regulation as an
important factor in accelerating
entrepreneurship.
say business failures are

perceived as barriers to
future business prospects.
29%
23%
Source: 2013 EY G20 Entrepreneurship Barometer
19
Access to
funding
This is the single area in which improvements are seen to be

most urgently needed, according to our findings in the G20
Barometer. There should be a deeper and more diverse mix of
funding options, including more innovative ways of raising
capital, such as crowdfunding and microfinance.21 More
traditional methods, such as venture capital funds and private
sector investor investment, should be incentivized to focus more
on entrepreneurial businesses. The bank lending model needs to
adapt to reflect the fact that start-ups can rarely provide
traditional collateral: alternative approaches are required, such
as credit guarantee schemes.
Capital without mentorship is

lost capital
A particularly valuable source of advice is the experienced

entrepreneur who acts, often pro bono, as a mentor to young
start-ups. The key recommendation is to create funding
mechanisms, either government run or government backed, that
make mentorship and financial education a condition of funding.
Actions for policymakers:
Provide financial literacy education for prospective young

entrepreneurs alongside mentorship and funding support.
Fund mentoring programs, and/or invest in a mentoring

programs through technology-focused, or skills-focused,
government departments.
Tie start-up funding to mentoring: young entrepreneurs must

have a mentor at the early stages of their business. The
relationship must be sustained for at least two years and
involve a monthly engagement.
Match the right mentor with the young entrepreneur by

developing a pool of mentors that can be drawn upon to
match with the relevant entrepreneur. For example, the needs
of young entrepreneurs must be considered, as well as the
proximity of mentorship.
Employ innovative financing strategies to multiply the scope

and potential impact of mentorship programs (e.g., subsidized
loans or venture capital schemes, in addition to grants and
equity).
Facilitate access to collateral-free capital for young

entrepreneurs along with grants and other assistance as
appropriate, to promote inclusive entrepreneurship.
21. Exceptional Extras, January 2014: G20 Entrepreneurship Barometer 2013 - Engines of growth, EY
website, http://www.ey.com/GL/en/Services/Strategic-Growth-Markets/ey-exceptional-extras-january2014---G20-entrepreneurship-barometer-2013, accessed July 2014, page 14.
20
United States: Entrepreneurial Mentor Corps (EMC)
Canada: Futurpreneur Canada
G20 country profile: Quadrant 1 has strong economic growth and higher
quality jobs for youth.
Recommended policy objectives for Quadrant 1: Sustain economic performance

and sustain/grow competitive advantage.

Futurpreneur Canadian (formerly the Canadian Youth Business

Foundation)22 includes a start-up program that provides the
support that entrepreneurs need to get their businesses off the
ground. Young entrepreneurs benefit from the extensive
experience of a hand-matched business professional who
mentors them for a minimum of two years to ensure the success
of the business. Futurpreneur Canada provides access to up to
CAD45,000 in start-up financing and access to up to CAD30,000
in expansion financing through a partnership with the Business
Development Bank of Canada.
Performance: Since 1996, Futurpreneur Canada has helped
6,570 young entrepreneurs to start their own business, creating
more than 26,000 jobs and generating more than CAD191m in
tax revenue in the process.
On February 2011, the US Government launched EMC, a new

program designed to mobilize the current generation of earlystage entrepreneurs to help build and support the next
generation of American businesses.23
Performance: The first phase of the EMC program was a clean
energy sector pilot. This funded four accelerators that in turn
supported 100 start-ups. The approach is expected to be
scalable to support 1,000 start-up companies.24
Where the picture is mixed, with high output but with lower
quality jobs, the policy objective is to leverage funding incentives
to drive innovation and entrepreneurship skills development
among young people.
Brazil: Start-up Brasil

G20 country profile: Quadrant 2 has stronger economic growth and lower
and focus on closing the skills gap and improving employment quality.
Start-up Brasil is a national acceleration program. It aims to

support the creation, and accelerate the growth, of
approximately 150 high-tech start-ups across the country. The
investment, which is part of the governments Programa
Estratgico de Software e Servios de Tecnologia da Informao
(TI Maior), will provide the companies with funding, along with
support to expand their marketing and sales efforts.25 The
program has an initial budget of US$19m, with a stipulation that
at least 25% of the 150 companies must be foreign firms which
have operations in Brazil.
Performance: This is early days for the program. Nonetheless, it
provided 56 start-ups with approximately US$90,000 in initial
capital, as well as funding nine accelerators (selected from a pool
of more than 900 applicants). Under the program, accelerators
are expected to make additional investments of up to R$1m
(US$499,000) in each team, indicating a huge potential
multiplier effect. With companies required to be incorporated in
Brazil, this suggests the local market will be a major beneficiary
of the skills gain.
22. Futurpreneur website, http://www.futurpreneur.ca/, accessed 5 June 2014.

23. Entrepreneurial Mentor Corps fact sheet, The U.S. Small Business Administration website, http://www.sba.gov/sites/default/files/files/EMC_FactSheet.pdf, accessed 5 June 2014.
24. Startup America, The U.S. Small Business Administration website, http://www.sba.gov/about-ba/sba_initiatives/startup_america/about_startup_america, accessed 5 June 2014.
25. Emily Stewart, Start-Up Chile and Start-Up Brasil: Two Very Different Beasts, PulsoSocial, http://pulsosocial.com/en/2013/11/14/start-up-chile-and-start-up-brasil-two-very-different-beasts/,
14 November 2013; Kim-Mai Cutler, The Brazilian Government Is Doing A Startup Program, Too, And Theyre Putting A Call Out For Entries, TechCrunch website,
http://techcrunch.com/2013/04/15/startup-brasil-brazil/, 15 April 2013.
21
South Korea: Korea Fund of Funds
Argentina: Fundacin Impulsar
G20 country profile: Quadrant 4 has softer economic growth and higher
G20 country profile: Quadrant 3 has softer economic growth and lower quality
jobs for youth.
Recommended policy objectives for Quadrant 4: Improve economic performance

and sustain and grow skills-based competitive advantage.
Recommended policy objectives for Quadrant 3: Improve economic

performance and focus on closing the skills gap and improving employment
quality.
The Korea Fund of Funds was set up to support local venture

businesses and venture capital (VC) industry by providing
stable capital sources and establishing a venture
ecosystem.26 The average size of funds is US$7m, and
US$1m is the average investment size of each target firm.
The uniqueness of the fund is that it invites more capital from
the private sector. The governments capital creates synergy
with private capital to be invested in SMEs rather than
providing loans or guarantees.
The Youth 1000 CEO Project is a Seoul city initiative that

provides young entrepreneurs with free office space and
grants.27 The city provides financial and advisory support to
1,000 people in their 20s and 30s who have ground-breaking
ideas but no capital. They are also given training at the
business establishment center, which acts as a workspace and
provides them with basic infrastructure, such as office space
and supplies.
Performance: In the programs first three years, 3,451 jobs
were created in 1,551 businesses. In its fourth cycle, from March
to May of this year, the program stepped up its support and
decided to award 1,200 winners instead of 1,000.
The Fundacin Impulsar promotes financial inclusion and is

targeted primarily at those who are from economically
disadvantaged backgrounds. It assists and supports young
people between the ages of 18 and 35 who have innovative
business ideas for which they have not been able to secure
funding elsewhere. There is an initial assessment phase during
which candidates ideas and business plans are tested in
interview. Then, for those who are successful, the Fundacin
Impulsar provides seed capital along with business planning
courses, development support, a greater awareness of the
culture of entrepreneurship and a year of mentoring. The
mentors are experienced business people who volunteer 4
hours per week to share their knowledge.
Performance: These are sustainable and profitable programs: of
the 1,200 microenterprises already funded by the Fundacin
Impulsar, 70% are still trading and they have an average of three
employees each.
26. Ashoka Changemakers, http://www.changemakers.com/SME-Finance/entries/korea-fund-funds, accessed 5 June 2014.

27. Elaine Ramirez and Sang Youn-joo, Youth start-up programs young, but blooming: Public and private sectors boost entrepreneurial support to tackle nations unemployment problem, The Korea
Herald, http://www.koreaherald.com/common_prog/newsprint.php?ud=20121002000722&dt=2, 2 October 2012; Supporting Dreams Through the Youth CEO Project, Arirang News,
http://www.arirang.co.kr/News/News_View.asp?nseq=116991&category=2, 13 June 2011; In-Soo Nam, South Korea Fuels a New Entrepreneurial Spirit, The Wall Street Journal, http://online.
wsj.com/news/articles/SB10001424127887323393804578554681586293800, 19 June 2013.
22
Access to alternative funding is critical

United Kingdom: Understanding Finance for
Business initiative
Private equity and VC are important parts of the funding

landscape, which are of particular help to entrepreneurs in
scaling up their businesses. While not a panacea, crowdfunding
and other inventive ways of raising capital are also significant.
Along with funding, business accelerators and incubators also
support innovative businesses by providing them with technical
and marketing guidance from networks and from experienced
entrepreneurs.
There is a clear cross-fertilization between alternative funding
and tax policy. This is evident in the Turkish scheme for business
angels and the Australian tax credits for venture capital.
The key recommendation is to create strong relationships and
provide incentives with venture capitalists (VCs), incubators and
business angels to develop or create initiatives that enable
alternative sources of capital.
Provide advice to small businesses on raising equity finance

from business angels and VCs.
Provide incentives to venture capital and angel investors to

invest in start-ups.
Create a community of angel-based investors.
Support friends and family in investing in small business

through access to tax incentives, credits, deductions and
incentives.
Encourage start-up funding by providing governmentguaranteed loans to VCs.
Create a strong network of accelerators and incubators to

support high-potential young entrepreneurs.
Collaborate with the private sector to support online

crowdfunding and create new initiatives in a competitive
environment, including equity crowdfunding.
The London Development Agency and the European Regional

Development Fund jointly launched the Understanding Finance
for Business initiative to support Londons entrepreneurs in
raising capital.28 It helps companies to make informed decisions
about the sorts of financing they require, by providing tailored
advice through seminars, workshops and one-on-one support.
Through the Gateway2Investment program,29 it provides
support in raising equity finance from business angels, VCs and
other investors.
Performance: The program helps London-based businesses
which have sales of less than 40m (US$67m) and fewer than
250 employees and are looking to raise from 100,000
(US$160,000) to 5m (US$8m) in a one year timeframe.
United Kingdom: Seed Enterprise Investment

Scheme (SEIS)
In 2011, the UK Government launched SEIS, which offers tax

benefits to individuals investing in small and early-stage start-up
businesses in the UK. SEIS has been designed to boost economic
growth in the UK by promoting new enterprise and
entrepreneurship.30
Performance: It gives income tax relief at 50% of the cost of
shares on a maximum annual investment of 100,000
(US$166,000) in the small or early-stage start-up.31 Relief is
given through reducing the investors income tax liability. In
addition, it offers an exemption of 28% tax on any capital gains
occurring within three years of the investment.32
28. Government backed schemes and initiatives promoting new business startups, ENT magazine website, http://www.entmagazine.com/start-ups.html, accessed 29 May 2014.
29. Gateway2Investment, British library website, http://www.british-library.uk/bipc/ourpartners/gateway2.html, accessed 29 May 2014. Exchange rate used is average for January 2014 - May 2014
YTD (1 = US$1.6643).
30. Seed enterprise investment scheme, SEIS website, http://www.seis.co.uk/, accessed 29 May 2014.
31. Exchange rate used is average for January 2014 - May 2014 YTD (1 = US$1.6643).
32. Seed Enterprise Investment Scheme (SEIS) Factsheet, Gander Tax Services website, http://www.gandertaxservices.co.uk/wp-content/uploads/2014/06/Seed-EIS-Factsheet.pdf, accessed 29 May
2014; Lauren ONeill, Securing tax relief for prospective investors, FPM website, http://www.fpmca.com/news/securingtaxreliefforprospectiveinvestors, 18 Nov 2013.
23
United States: Early Stage Innovation Fund

The Small Business Administration (SBA) launched the Early

Stage Innovation Fund initiative in January 2013 to improve
access to investment capital for start-ups.33 The program
provides government-guaranteed loans to VC funds, which in
turn use this amount to make equity investments. It aims
principally to provide direct investment to those companies that
are otherwise overlooked by VCs.
Performance: The program aims to provide US$200m in debt
financing for each of the next five years for early-stage
venture funding.
Canada: Canada Accelerator and Incubator Program

The Canadian Government launched the Canada Accelerator and

Incubator Program (CAIP) as part of its Venture Capital Action
Plan in September 2013. The program aims to establish a
developed network of accelerator and incubator organizations to
enable high-potential young entrepreneurs, to develop their
ideas into globally competitive businesses.
Performance: Canadas Economic Action Plan 2014 proposes to
provide the program with an additional CAD40m (US$36.4m
over four years, starting in 201516, and thus increase its total
funding to CAD100m (US$91m).34
European Union: EU Venture Capital Fundraising

Rules to Benefit SMEs35
The EU introduced a European Venture Capital Fund35 along with
simplification of the fundraising regulation rules to promote
better access to finance for SMEs. It increased financial support
from the EU budget and the European Investment Bank. It
introduced a single set of fundraising regulations that once VCs
met could be applied across the EU Member States.
Performance: According to the European private equity venture
capital association (EVCA), the total amount of VC invested in
Europe increased by 5% to 3.4b (US$4.6b) in 2013. More
than 3,000 companies were venture backed. Start-up stage
investments accounted for the majority of VC activity by
amount (55%) and number of companies (59%).35ii
Germany: German Accelerator

The German Accelerator is a PPP which aims to expose German

tech start-ups to American business culture and help them to
enter the US market.36 It provides entrepreneurs with three to
six months of hands-on mentoring at locations in Silicon Valley,
San Francisco and New York City, during which time experienced
mentors continually challenge the entrepreneurs assumptions
and provide feedback to them. The start-ups actively engage
with customers, establish relationships, adjust to local styles of
communication, validate their products market fit and make
connections with potential investors.
Performance: There have been about 250 applications since the
programs inception in 2011, and over 40 companies have
already taken part.
33. Robb Mandelbaum, S.B.A. Signs Its First Venture Capital Fund to New Investment Program, The New York Times website,
http://boss.blogs.nytimes.com/2013/01/22/s-b-a-signs-its-first-v-c-to-newstart-up-investment-program/?_php=true&_type=blogs&_php=true&_type=blogs&_r=1, 22 January 2013.
34. Chapter 3.1: Connecting Canadians With Available Jobs, Government of Canada Budget 2014 website,
http://www.budget.gc.ca/2014/docs/plan/ch3-1-eng.html, accessed 29 May 2014. Exchange rate used is average for January 2014 - May 2014 YTD (C$1 = US$0.9096).
35. New EU fundraising rules: boosting venture capital for SMEs and easing access to credit, Europa website,
http://europa.eu/rapid/press-release_IP-11-1513_en.htm?locale=en, 7 Decem 35i.Exchange rate used is 1=US$1.36188 as of 27 June 2014
35i. Exchange rate used is 1=US$1.36188, as of 27 June 2014.
35ii.2013 investments at a glance, European Private equity & Venture capital Association (EVCA) website,
http://www.evca.eu/research/activity-data/annual-activity-statistics/investments-(2013)/, accessed 27 June 2014.
36. German Accelerator website, http://germanaccelerator.com/, accessed 5 June 2014.
24
China: Incubators for returning students

Public funding matters
The country is in the process of building 150 business start-up

incubators for Chinese students who are returning to China after
attending higher education institutions abroad.37 It offers an
informational platform and facilitates the communication and
sharing of knowledge about human resources, projects, policies
and funding.
Nurturing youth entrepreneurship entails a sustained effort from

public funding bodies. They need to help finance the start-up
ventures by providing seed capital at a reasonable cost. Many
countries have set up specialized funding agencies that focus on
providing financial assistance in the form of loans, subsidies and
debt refinancing options to the first-time young entrepreneurs
and early-stage start-ups. Given many young entrepreneurial
firms are in the nascent stages of their development, public
funding support through these channels also demands a
coordinated approach. In particular, entrepreneurs look to
governments to play a more supportive role by encouraging
more public-private partnerships, developing an entrepreneurial
support pipeline starting with online training, workshops, then
peer-to-peer networks, mentorship opportunities, customer
linkages and export readiness. Linking funding to education is
consequently an important mechanism for supporting young
entrepreneurs.
Performance: About 80% of NASDAQ-listed Chinese high-tech

enterprises were started by students who have returned to China
after studying abroad.
Australia: ScreenWest initiative

The key recommendation is to sponsor start-up growth with

low-cost funding for targeted groups


In 2012, the Western Australian Government partnered with the
Australian crowdfunding platform Pozible to launch a
ScreenWest initiative, making up to US$250,000 available for
digital projects in the state.38 The program is an excellent
example of the Power of 3, with state government, a
commercial company and entrepreneurs all being involved.
Creative teams will need to attract contributions online in order
to secure the grant. Then for every dollar they raise through
online crowdfunding, ScreenWest will contribute a further three
dollars to the budget. The project is industry-specific, focusing
on digital visual media, an industry that has proved especially
attractive to young people.
Performance: There have already been a dozen projects which
have achieved at least 100% funding, and many others already
partially funded.39
Assume youth are in the start-up phase and need finance.

Provide government funding support to start-ups.
Foster start-up programs mentored by academic institutions

by directly investing in these institutions.
Develop an entrepreneurial support pipeline starting with

online training, workshops, then peer-to-peer networks,
mentorship opportunities, customer linkages and export
readiness.
Adopt a coordinated approach to start-up financing.
37. C. Custer, China Has 150 Start-up Incubators Just for Returning Study-Abroad Students, Tech in Asia website, http://www.techinasia.com/china-150-start-up-incubators/, 24 August 2011.
38. State Govt takes lead in innovative grant allocation initiative, Government of Western Australia website,
http://www.mediastatements.wa.gov.au/pages/StatementDetails.aspx?listName=StatementsBarnett&StatId=6183, 25 July 2012.
39. ScreenWests 3 to 1, Pozible, http://www.pozible.com/collection/detail/25, accessed 5 June 2014.
25
Russia: Skolkovo Innovation Center
United Kingdom: StartUp Loans Scheme

performance and sustain and grow skills-based competitive advantage.

The UK Government launched a new scheme, in 2012,

offering loans to young people to help them start new ventures.
The StartUp Loans Scheme which has funds of 82.5m
(US$137.3m),40 offers finance and support to entrepreneurs
aged between the ages of 18 and 24.41 The most promising
applicants receive formal mentoring and training, including help
with developing a business plan. Those with robust and
approved plans are eligible for loans of around 2,500
(US$4,160).
Performance: By the end of 2013, more than 3,000 people
had registered interest for a StartUp Loan and over 460 new
businesses had been approved, with loans totaling over
1.5m (US$2.5m) .42
Russia: Internet Initiatives Development Fund

quality jobs for youth
The Russian Government launched its Internet Initiatives

Development Fund (IIDF) to provide early-stage development
funding, training, and organizational support for aspiring
internet entrepreneurs.43 The IIDFs goal is to create a favorable
funding environment for the countrys digital economy.
Performance: As of October 2013, the IIDF had received nearly
1,000 proposals from across Russia. The IIDF plans to select the
100 most promising applications, of which 50 will receive up to
23,000 and a place in the Accelerator program, the remaining
50 will receive online access to training courses and advice from
industry experts.
Skolkovo Innovation Center44 (also known as Russias Silicon

Valley) is a planned high-technology business area set up at
Skolkovo near Moscow. The project is similar to the ecosystem,
Silicon Valley, in the US, providing end-to-end support for new
ventures to develop successfully. The Skolkovo Institute of
Science and Technologys curriculum only offers graduate
degrees and is financially backed by the Russian Ministry of
Finance. It seeks to create tech start-ups and lure corporate
research laboratories with tax breaks and relaxed visas and
customs regulations. It utilizes the infrastructure, resources and
other features of the technology park.
Performance: It has successfully backed 750 start-ups. By
201245 it had US$97m in grants, 750 residents and 49 venture
capital funds. It also had created 131 intellectual property items.
And had attracted IBM, Microsoft and Siemens to locate to
Skolkovo, and claims to have recruited 52 VC firms.
Japan: Female youth entrepreneurship program

The Japanese Government has inaugurated a fund to help young

female entrepreneurs launch new companies. This forms a part
of the countrys economic revitalization measures, known as the
Japan is Back campaign. Tech start-ups launched by women
are a particular growth area in Japan.46
Performance: As part of this funding program, Japans
Government has allocated US$200m (20b) to a fund to support
young female entrepreneurs. Start-up founders also can apply
for special low-interest loans from banks.
41. Steph Welstead, Government launches start-up loans for young entrepreneurs, Startups UK website, http://startups.co.uk/government-launches-start-up-loans-for-young-entrepreneurs/, 27 May 2012.
42. Abigail Van-West, Start-up Loans scheme for young entrepreneurs explained, Startups UK website, http://startups.co.uk/start-up-loans-scheme-for-young-entrepreneurs-explained/, 28 January 2013.
43. Helping Russian entrepreneurs: Russias Internet Initiatives Development Fund, Think Russia website, http://www.thinkrussia.com/policy-initiatives/helping-russian-entrepreneurs-russias-internetinitiatives-development-fund, 27 November 2013.
44. Oliver Staley, Russia teams with MIT on Skolkovo Institute of Science and Technology, The Washington Post,
http://www.washingtonpost.com/business/russia-teams-with-mit-on-skolkovo-institute-of-science-and-technology/2013/05/09/54b31e9c-b5da-11e2-b94c-b684dda07add_story.html, 8 May 2013.
45. Andrii Degeler, Russian tech hub Skolkovo in 2012 by the numbers: $97m in grants, 750 residents, 49 funds, The Next Web, http://thenextweb.com/insider/2012/12/17/skolkovos-2012-97m-ingrants-750-residents-49-venture-funds/, 17 December 2012.46. Japans tech startup solution? Women, CNN Money website, http://management.fortune.cnn.com/2013/09/11/japan-tech-women/,
accessed 29 May 2014.
46. Michael Fitzpatrick, Japans tech startup solution? Women, Fortune magazine, http://management.fortune.cnn.com/2013/09/11/japan-tech-women/, 11 September 2013.
26
South Africa: Finance for youth-owned businesses

jobs for youth.
Three development finance institutions the Industrial

Development Corporation (IDC), the Small Enterprise Finance
Agency (sefa) and the National Youth Development Agency
(NYDA) signed a cooperation agreement in October 2013 that
will enable youth-owned businesses to have easier access to
finance.47 The agreement will result in a coordinated approach
to providing funding and support services to these businesses.
The cooperation agreement between the IDC, sefa and the NYDA
is a follow-up to the signing of the Youth Employment Accord in
April 2013, in which the government and its social partners
made a commitment to prioritize youth employment and skills
development. The IDC announced it had set aside ZAR1b
(US$93.4m)48 from its Gro-e-Scheme to fund businesses owned
by young entrepreneurs.49
Performance: These programs offered support to 44 youthowned businesses during the six months from the signing of
the Youth Employment Accord in April 2013. Furthermore,
concessional lending and financial support amounting to
ZAR37.4m (US$3.5m) was provided to youth-owned
enterprises during the same period.50
Entrepreneurs still need banks to keep

credit moving
Accessing expansion capital can be a frustrating process for

young entrepreneurs. Banks are low-risk lenders, and quite often
young entrepreneurs are unable to meet the qualifying criteria
for traditional loans. As a result, governments and organizations
in many provinces offer secured loans, or even subsidized
interest rates and credit mediation facilities, to qualifying young
entrepreneurs.
Many entrepreneurs face an uphill battle for sufficient capital
to keep a growing business, at the same time as managing
sufficient working capital to pay its employees, vendors and
landlord on time. While tight credit conditions were particularly
pronounced in the recent financial crisis, challenges in accessing
bank credit for investment and working capital persist, reflecting
risk aversion and imperfect information on young
entrepreneurial firms when applying for bank finance.
At the same time, bank lending is a financial backbone for
business expansion. Unless the entrepreneur has a stockpile of
cash to use when needed, reliance on short-term financing from
a bank is the first line of defense. Accordingly, many
entrepreneurs establish a line of credit with their bank, in
addition to permanent financing such as a commercial mortgage
or term loans for equipment and other fixed assets. As a result,
there is a clear need for bank credit among young entrepreneurs
in the scale-up phase of their business, and an important role for
policy in driving facilitation.
47. Partnership to provide support to youth entrepreneurs, Industrial Development Corporation (IDC) website,
http://idc.co.za/media-room/press-release/media-releases-2013/400-record-disbursements-for-industrial-development-2, 21 October 2013.
48. IDC, SEFA and NYDA sign cooperating agreement, IDC news update, http://www.idc.co.za/media-room/articles/403-idc-sefa-and-nyda-sign-cooperating-agreement, accessed 28 May 2014.
49. Helping Russian entrepreneurs: Russias Internet Initiatives Development Fund, Think Russia website,
http://www.thinkrussia.com/policy-initiatives/helping-russian-entrepreneurs-russias-internet-initiatives-development-fund, 27 November 2013.
50. Minister Patel welcomes efforts to fast-track youth entry into business, Economic Development Department South Africa press release,
http://www.economic.gov.za/communications/media/press-releases-2013/361-minister-patel-welcomes-efforts-to-fast-track-youth-entry-into-business/download, 21 October 2013.
27
The key recommendation is to create a new class of loan for

small businesses and young entrepreneurial firms that offers
targeted funding to meet expansion capital needs.
For the Ministry of Finance or Commerce to establish and

aggregate microfinance sources in a single site for one stop
access.
Provide loans particularly focused on propelling startup

growth and funding, or referrals to microfinancing institutions
that do.
Reduce the financing gap for female entrepreneurs by

offering targeted funding from banks.
Work with banks to provide credit to SMEs specifically

creating new jobs for young people.
Provide intensive skills-based training and bank funding for


India: Micro and small enterprises (MSE) business
finance support
jobs for youth.
Young people in India tend to be excluded from entrepreneurship

opportunities as commercial banks traditionally steer away from
them. Recognizing that a lack of adequate credit at reasonable
interest was a deterrent, the Government launched a Credit
Guarantee fund scheme for micro and small enterprises
(CGTMSE) in 2000 in conjunction with the Small Industries
Development Bank (SIDB) to make collateral free credit to the
MSE sector.
In 2007-08 under the terms of the scheme, Bharatiya Yuva
Shakti Trust (BYST) established public-private partnerships with
two of Indias largest banks, Bank of Baroda and the India Bank
to provide financing to young entrepreneurs. BYST monitors
each entrepreneurs business performance and provides
non-financial support, including an extensive mentoring program
in partnership with the business community.
Performance: Between 2013 and the present, 426 young

entrepreneurs have been supported. At the end of three years,
entrepreneurs are expected to create at least five new jobs, and
increase their initial investment by a factor of three. On both
measures, BYST achieved average ratios of 1:10 in 2014 of all
its entrepreneurs supported to date.
South African: Microfinance Apex Fund

jobs for youth.
The South African Microfinance Apex Fund (Samaf) provides

affordable access to micro-loans to SMEs, specifically targeting
women and young entrepreneurs. It has a national footprint. It is
one initiative among several led by the National Department of
Trade Investment for the Government of South Africa that brings
microfinance options together in a one-stop shop. Through
Samaf and several other institutions, like the National
Empowerment Fund 51 and Khula Enterprise Finance Limited 52,
it brings together a wide range of products and services
comprising loans, and non-cash incentive grants that play an
important role in enabling access to finance for small
enterprises.
Performance: For the 2011-12 period, Samaf disbursed
ZAR58.3m (US$5.5m) to financial intermediaries (FIs) in respect
of loans and grants. About 68% of the loans by the FIs to the end
users were in rural communities and 93% were micro-enterprise
loans. Samaf supported 14 microfinance institutions, 23
financial services cooperatives and 24 stokvels during 2011-12.
The total number of end user borrowers increased by 53% to
62,459 in 2011-12 from 40,726 in 2010-11.
In April 2012, the Small Enterprise Finance Agency Limited
(SEFA) was established with the merger of Khula Enterprise
Finance, Samaf and the Industrial Development Corporation
(IDC) small business activities. During 2012-13, SEFA disbursed
ZAR198m (US$18.6m) and financed 28,362 loans to small,
micro and medium enterprises. This led to the creation of about
19,853 direct jobs during the period.
51. The National Empowerment Fund offers a range of start-up, business growth, and rural and community upliftment financing products with a focus on black economic empowerment transactions
(Equity Finance).
52.Per Integrated Strategy on the Promotion of Entrepreneurship and Small Enterprises, Department: Trade and Industry, Republic of South Africa website, http://www.dti.gov.za/sme_development/
docs/strategy.pdf: Khula Enterprise Finance Limited facilitates access to finance and has developed a variety of financing products including credit guarantee schemes in which it has partnered with
the countrys major commercial banks to unlock lending to small enterprises. Khula continues to seek new ways to improve access to financial support across the country, partnering with sector
departments to develop new sector specific financing programs for small business, and studying different approaches to strengthen the realization of government goals for small business finance.
28
Brazil: Banking on Women initiative
Saudi Arabia: Loan packages for young entrepreneurs,
jobs for youth.


There is a major credit gap problem throughout Latin America:

the difficulties that female entrepreneurs encounter in obtaining
funding, compared to the easier task of their male counterparts.
In a recent survey, 45% of women-owned SMEs in Latin America
reported having difficulties in accessing capital. As part of its
worldwide Banking on Women program, the International
Finance Corporation (IFC) is working with Ita Unibanco to help
expand its own Programa de Mulheres Empreendedoras, a
unique program that supports access to finance for women
entrepreneurs in Brazil.53
Performance: There are over 150 women-owned businesses
cited on the programs website.54
Italy: SME credit support

jobs for youth.
The European Investment Bank (EIB) and UBI Banca Group

signed an agreement in Milan in January 2014 to provide a
credit line to support youth employment and small and medium
enterprises (SMEs) in Italy.55
Performance: The 50m (US$69m)56 EIB credit line will be
channeled by the UBI Groups network banks to Italian start-ups,
SMEs, and midcaps (between 250 and 3,000 employees)
which create new jobs for young people in the 15 to 29 age
group. A loan of 200m (US$275m) will be provided
as support.57
1. The Saudi Credit and Savings Bank (SCSB) and Shell Saudi
Arabia (KSA) signed an agreement, in 2013 to provide
entrepreneurs graduating from the Intilaaqah KSA program
(an enterprise training program to equip young Saudi
entrepreneurs with automatic eligibility for funding). The
SCSBs loans packages range from SAR500,000
(US$130,000) up to SAR8m (US$2.1m).58
Performance: Since 2010, Shell Intilaaqah has trained over
7,500 Saudis, who have between them started 665 enterprises
and created 2,174 jobs.
2. The SCSB undertook another initiative last year to help young
entrepreneurs to start their own businesses, by lending them
capital of up to SAR300,000 (US$80,000). It targets small
and new enterprises and offers a coordinated approach to
finance. In addition to development funding through interestfree loans, the bank offers coaching and mentoring.
Performance: The SCSB approved the funding of 415 SME
projects worth SAR87 million (US$23 million) in 2013.59
The Netherlands 60: Qredits

Qredits,61 the Netherlands only national microcredit institution,
is a non-profit organization that supports the social and financial
inclusion of Dutch micro-entrepreneurs who have a viable
business plan but cant obtain financing or coaching through
regular channels. A portion of Qredits loan portfolio is
guaranteed by the European Investment Fund. Qredits was
created with the support of national banks, which refer potential
microcredit clients to Qredits through online forms that are sent
directly to Qredits. Qredits follows up with the potential client
and also with the referring bank.
Performance: Twenty-five percent of the banks referrals obtain
a loan from Qredits.
53. IFC and Ita Unibanco Support Access to Financial Services for Women Entrepreneurs, International Finance Corporation website, http://www.ifc.org/wps/wcm/connect/industry_ext_content/
ifc_external_corporate_site/industries/financial+markets/news/ifc+and+itau+unibanco+support+access+to+financial+services+for+women+entrepreneurs, accessed 5 June 2014.
54. 10,000 Women website, http://www.10000mulheres.com.br/empreendedoras, accessed 5 June 2014 (Portuguese language).
55. EIB and UBI Banca Group provide 350 million for SMEs, midcaps, start-ups and youth employment, Europa website, http://europa.eu/rapid/press-release_BEI-14-21_en.htm, 3 February 2014.
57. EIB delivers on increased SME lending and approves support for youth employment, Inside Europe website, http://insideurope.eu/taxonomy/term/157, 24 July 2013.
58. Shell and Saudi Credit & Savings Bank join forces to support Intilaaqah entrepreneurs, Shell liveWIRE news, http://www.shell-livewire.com/home/newsevents/news/shell_ksa_and_scb_join_
forces_to_support_intilaaqah_entrepreneurs/, accessed 28 May 2014; Find a Programme / Saudi Arabia, Shell Intilaaqah Community, http://www.shell-intilaaqah.com/home/find_
programme/1244710409.619/, accessed 28 May 2014.
59. Neil King, SCSB to give $23m to 415 SMEs, Arabian Business website, http://www.arabianbusiness.com/scsb-give-23m-415-smes-515375.html, 27 August 2013.
60. Since the Netherlands is not part of the G20, it has not been included in the diagnostic and no country profile is included.
61. Qredits website, www.qredits.com, accessed 23 June 2014.
29
Tax and
regulation
The EY G20 Entrepreneurship Barometer found a clear

consensus that the tax and regulatory systems are far too
complex. They need to be streamlined and simplified, so that the
entrepreneurs can focus on running their businesses rather than
being caught up in administration. There was also strong support
for tax incentives to encourage the entrepreneurs to start their
businesses and for their investors to provide the necessary
capital. Government support also needs to be concentrated
where it is most effective, for example at the start-up phase,
through R&D tax credits, training credits and location incentives.
Furthermore, international mobility and market access standout.
In fact, there is a direct link between internationalization and the
competitiveness of SMEs.62 For fast-growing, young
entrepreneurial firms, government initiatives in these areas are
imperative to driving market growth and business sustainability.
Targeted tax and business incentives are

highly important to supporting young
entrepreneurs in scaling their
businesses
Targeted tax incentives are vital in fostering high-performing

enterprises. Furthermore, authorities view these incentives as a
way to reduce unemployment rates among the young
generation.
Key recommendation #1 is to encourage investment in start-ups
by offering tax benefits.
Identify and encourage investment schemes best able to

target support on youth entrepreneurs.
Develop tax incentives to support and advance these

schemes.
Develop tax incentives to encourage youth job creation.
62. European Commission - Enterprise and Industry - Small and medium-sized enterprises (SMEs) - Access
to markets, European Commissions Directorate General for Enterprise and Industry website,
http://ec.europa.eu/enterprise/policies/sme/market-access/index_en.htm, last updated 2 April 2013.
30

United Kingdom: Seed Enterprise Investment Scheme
Australia: Early Stage Venture Capital Limited

Partnerships
In 2011, the UK Government launched Seed Enterprise

Investment Scheme (SEIS), which offers tax benefits to
individuals investing in small and early stage start-up businesses
in the UK. SEIS has been designed to boost economic growth in
the UK by promoting new enterprise and entrepreneurship.63
The Early-Stage Venture Capital Limited Partnerships (ESVCLP)

program aims to boost the countrys early-stage VC sector. The
program provides investors in the ESVCLP with tax concessions
such as exemptions on their share of the funds revenue and
capital. This incentivizes high net worth individuals and networks
to invest in Australian start-up businesses.67
Performance: It gives income tax relief at 50% of the cost of

shares on a maximum annual investment of 100,000
(US$166,000) in the small or early stage start-up.64 Relief is
given through reducing the investors income tax liability. In
addition, it offers an exemption of 28% tax on any capital gains
occurring within three years of the investment.65
Performance: Under legislation, early-stage VC groups must

have assets of between US$10m and US$100m to be eligible for
ESVCLP registration. Also, the business in which they are
investing should have less than US$50m in assets before the
investment. Once the assets cross the US$250m mark, the
ESVCLP must dispose of the investment.68
Canada: Small Business Personal Income Tax Credit
Turkey: Business angel tax incentives
jobs for youth.


Under new provisions in New Brunswick, which come into effect

for the 2014 tax year, residents investing in small businesses in
the province will receive a 30% non-refundable personal income
tax credit of up to CAD75,000 per year. A small business venture
capital tax credit was introduced in British Columbia in 1985, an
early example of such concessions. It encourages investors to
make equity capital investments in small businesses in British
Columbia, in order to give them access to early-stage VC.
In February 2013, the Turkish Treasury introduced tax incentives

for business angels. The new framework provides tax incentives
to licensed angel investors, allowing them to deduct up to 100%
of their investment from their personal income tax base. It forms
part of a government strategy to strengthen the financial
ecosystem by developing public policies for business angels and
business angel networks.69
Performance: In 2013, British Columbia had VC investments

totaling CAD478m, more than double the CAD198m invested
in 2012.66
Performance: More than 100 investors applied for angel

investor licenses within the first year of its implementation to
capitalize on these tax advantages.70
63.Seed enterprise investment scheme, SEIS website, http://www.seis.co.uk/, accessed 29 May 2014.
64. Exchange rate used is average for Jan 2014-May 2014YTD (1 = US$1.6643).
65. Seed Enterprise Investment Scheme (SEIS) Factsheet, Gander Tax Services website, http://www.gandertaxservices.co.uk/wp-content/uploads/2014/06/Seed-EIS-Factsheet.pdf, accessed 29 May
2014; Lauren ONeill, Securing tax relief for prospective investors, FPM website, http://www.fpmca.com/news/securingtaxreliefforprospectiveinvestors, 18 Nov 2013.
66. Mary Meldrum, A Banner Year for British Columbia Venture Capital, Trade and Invest British Columbia website,
http://www.britishcolumbia.ca/global/blog/march-2014/a-banner-year-for-british-columbia-venture-capital.aspx#.U5B3iyqQmfI, 19 March 2014.4
67. Rose Powell, Entrepreneur election watch: Early stage venture capital limited partnerships update,
Startup Smart website, http://www.startupsmart.com.au/planning/entrepreneur-election-watch-early-stageventure-capital-limited-partnerships-update/2013070110105.html, 2 July 2013;
68. Early Stage Venture Capital Limited Partnerships: Fact sheet, Australian Government website, http://www.business.gov.au/grants-and-assistance/venture-capital/esvclp/Documents/
ESVCLP-FactSheet.pdf, 21 December 2011, page 1.
69. Burcu Tuzcu Ersin, Asli Ersanli, Moroglu Arseven, Turkey: Angel Investment System In Turkey, Mondaq website,
http://www.mondaq.com/x/228156/tax+authorities/Angel+Investment+System+In+Turkey, last updated 22 March 2013.
70. Jonathan Ortmans, Angel investors spread their wings, Entrepreneurship website,
http://www.entrepreneurship.org/blogs/policy-forum-blog/2014/march/angel-investors-spread-their-wings.aspx, 31 March 2014.
31
Argentina: Youth Employment Tax Incentive
France: Pacte PME SME Pact
jobs for youth.
G20 country profile: Quadrant 4 has softer economic growth and higher quality
jobs for youth.


In March 2014, the municipal council of Rosario in central

Argentina put forward a proposal for a tax incentive which seeks
to encourage youth employment.71 According to the proposal,
an employer who hires an 18 to 24 year old will gain a tax credit
equal to twice the amount of tax paid during the period prior to
hiring. If that individual shows that he/she is still studying in
secondary or tertiary education, the credit will be doubled.
The SME pact, a joint venture with OSEO (the French

Governments innovation agency) and 14 business organizations,
was formed to stimulate the growth of small enterprises. It acts
as a bridge between innovative SMEs and large organizations
(national as well as international) through commercial contracts
and research and development collaborations. Established firms
that voluntarily sign the SME Pact and commit themselves to
increasing their procurement from SMEs give SMEs valuable
exposure, increase their productivity through competitiveness
and help them to grow.
Performance: The council of Rosario will report on the first

years progress in March 2015.
Key recommendation #2 is to enable young, high-growth
entrepreneurial firms to scale up through amplified support for
market access.
Drive a government procurement scheme which includes

youth entrepreneurs as a targeted supplier.
Support enterprise collaboration, and procurement

opportunities, between high-growth young entrepreneurial
firms and market leading corporates.
Enable access to export markets including through export

financing initiatives.
Performance: Large corporation members of the SME Pact

association procured 2.4b (US$3.3b72) in additional orders
from French SMEs in 2013. The share of SMEs in their purchases
rose to 22.4% in 2013 from 21.2% in 2012. They also initiated
572 innovation partnerships with SMEs.73
South Africa: Corporate Small Business Development

Forum (CSDF)
jobs for youth.
Several large corporations have developed programs to

increase their procurement from small enterprises. Sponsoring
corporations run their program either individually or in
collaboration with other corporations under the CSDF. Efforts
are being made by business membership organisations, such as
the National Business Initiative, to increase the number of large
corporations involved in linkage programs with small enterprises.
Performance: The program supports small enterprises by
increasing large corporations procurement from them.
71. Argentina Tax incentives to promote youth employment, Staffing America Latina website,
http://staffingamericalatina.com/en/argentina-incentivos-fiscales-para-promover-el-empleo-juvenil/,12M March 2014.
72. Exchange rate used is 1 = US$1.36188, as of 27 June 2014.
73 Annual Review SME Pact, Pacte PME website, http://www.pactepme.org/uploads/blog/20140701_cp-bilan-annuel.pdf, accessed 3 July 2014.
Note: Text has been translated from French to English.
32
The key recommendation is to encourage top talent by changing

visa rules and offering funding support.
Brazil: Lei Geral Policy


Support international student mobility by relaxing visa norms

and introducing G20 multi-lateral visas.
Relax business visa restrictions among G20 countries.
Promote immigrant entrepreneurs by linking them to funding

institutions and business incubators.
Promote inbound start-up activity by providing relocation

funding support.
The Government of Brazils policy on small and micro businesses

offers a broad spectrum of initiatives to support private sector
growth. Small businesses with a turnover of up to R$2.4m
(US$1.23m) are entitled to a reduced tax structure, and are
prioritized for government procurement projects of up to
R$80,000 (US$41,064).
Performance: Quantitative data is not currently available.
Support global mobility for young

entrepreneurs
Young entrepreneurs need to be able to establish themselves in

geographical locations which are fertile areas for their particular
business approach and products, whether in the overall business
ecosystem or accessing a particular group of skilled individuals.
Mobility may involve a temporary exposure to new countries, or
it may be the more radical approach of wholesale emigration.
Easing regulations related to immigration can act as a positive
step toward attracting young entrepreneurs from across the
world. Entrepreneurial-minded students from leading universities
should be retained and incentivized to remain in the country to
create value-adding businesses.
United Kingdom: Graduate Entrepreneur visa


The UK Government, through UK Trade and Investment

(UKTI), offers schemes to facilitate an individuals transition
from international student to local entrepreneur.74 The Tier 1
Graduate Entrepreneur visa, launched in 2012, aims to
encourage international students who are graduating from UK
universities to extend their stay in the country in order to
establish a business. Prospective recipients can either apply
to their own university in the UK or to the UKTI Sirius
Programme.75 Sirius invites talented young entrepreneurs
with innovative start-up ideas to relocate to the UK. In return
they receive a 12-month start-up support and accelerator
package worth 12,000 (US$20,103) to set up and expand
their business.
Performance: More than 1,500 graduate entrepreneurs from
over 93 countries applied during the first year of the Sirius
Programme. Of these applicants, over 30 teams will have
relocated to the UK by June 2014.
74. Ryan Schechter, What the UK can do to stimulate entrepreneurship amongst its foreign students, Nesta website, http://www.nesta.org.uk/blog/talent-drain-uk, 14 January 2014.
75. UKTIs Sirius Programme brings in entrepreneurs from Nigeria, Vietnam and Italy to start up in the UK, Growth Business website, http://www.growthbusiness.co.uk/news-and-market-deals/
business-news/2448457/uktis-sirius-programme-brings-in-entrepreneurs-from-nigeria-vietnam-and-italy-to-start-up-in-the-uk.thtml, 16 December 2013.
33
Canada: Start-up Visa Program

In an effort to attract innovative foreign entrepreneurs to

Canada, the federal government created the Start-up Visa
Program in April 2013. The program links immigrant
entrepreneurs with experienced private sector organizations
that are experts in working with start-ups. The program also
fast-tracks permanent residency applications for immigrant
entrepreneurs who are able to secure funding or support from a
designated angel investor group or VC fund.76 In addition, the
Canadian Government introduced the new business incubator
stream in October 2013 under the Start-up Visa Program. It
allows foreign entrepreneurs to apply directly to incubator and
accelerator programs. These institutions will evaluate proposals
and provide recommendations to Citizenship and Immigration
Canada for approval of their immigration applications. Applicants
under the business incubator stream can immigrate to Canada in
teams of up to five partners.77
Performance: The Start-up Visa Program aims to offer 2,750

visas a year to immigrant entrepreneurs and their families.78 It is
planned to run for at least five years, and should result in the
recruitment of more than 13,000 immigrant entrepreneurs to
Canada.
France: Entrepreneurship Visa

jobs for youth.
The French Government also aims to facilitate funding and ease

visa rules for entrepreneurs. In February 2014, the government
announced plans to create an entrepreneurs visa and provide
funding for start-ups planning to move to France.
Performance: France intends to offer subsidies amounting
25,000 (US$34,000) to foreign start-ups planning to relocate
to the country.79
76. The EY G20 Entrepreneurship Barometer 2013: Canada, EY website, http://www.ey.com/CA/en/Services/Strategic-Growth-Markets/G20-Entrepreneurship-Barometer-2013-Overview, page 4.
77. Ruba El-Sayegh, Canada: Introducing A New Visa Stream To Lure Immigrant Entrepreneurs The Start Up Business Incubator Class, Mondaq website, http://www.mondaq.com/
canada/x/271822/general+immigration/Introducing+A+New+Visa+Stream+To+Lure+Immigrant+Entrepreneurs+The+Start+Up+Business+Incubator+Class, 30 October 2013.
78. The EY G20 Entrepreneurship Barometer 2013: Canada, EY website, http://www.ey.com/CA/en/Services/Strategic-Growth-Markets/G20-Entrepreneurship-Barometer-2013-Overview, page 4.
79. Leonid Bershidsky, Bershidsky on Europe: Renzis Bold Plan, http://www.bloombergview.com/articles/2014-02-18/bershidsky-on-europe-renzi-s-bold-plan, 18 February 2014; French
government likely to facilitate access to subsidies for start-ups and lower regulatory burden, IHS Global Insight Daily Analysis, 18 February 2014, via Factiva, IHS Global Insight Daily Analysis;
Entrepreneur visas and other new measures in France to support enterprise, Invest in France Agency (IFA) website, http://www.invest-in-france.org/us/news/entrepreneur-visas-and-other-newmeasures-in-france-to-support-enterprise.html, accessed 27 May 2014.
34
Complex and burdensome rules in areas

such as tax hold back young
entrepreneurs
Key recommendation is to simplify and streamline tax

administration to ease administrative burdens on young
entrepreneurs.
Develop effective instruments to measure administrative and

compliance burdens.
Simplify tax rules and administration to ease burdens.
Improve support and guidance available to young

entrepreneurs.

United Kingdom: Creation of the Office of Tax
Simplification
In 2010, the United Kingdom created an agency specifically

charged with simplifying the tax system, the Office of Tax
Simplification (OTS). Its responsibilities are to identify areas
where complexities in the tax system for both businesses and
individual taxpayers can be reduced and to publish their findings
for the government to consider ahead of the annual budget.
The OTS draws on external expertise from the tax and legal
profession. These experts focus on specific areas of complexity
in the tax system and provide additional advice to the OTS.
France: French 2014 reforms to simplify the

administrative code
jobs for youth.
As part of a cross-cutting policy to simplify administrative

procedures for citizens and businesses the French Government
will pursue a range of simplifications to the rules that apply when
entrepreneurs set up and develop their businesses. This includes
measures such as the abolition of the requirement to publish the
notes to the annual accounts for very small companies (less than
10 employees).
35
Entrepreneurship
culture
Young entrepreneurs require a more supportive culture, in

which their contribution to society is properly recognized and
their success is celebrated. The converse of this is that there
should also be a greater tolerance of failure, which can be a
valuable source of knowledge and experience. To encourage
more entrepreneurs, a country needs a set of beliefs that make
entrepreneurship a valid and respected career choice.
The culture should also be more inclusive,80 opening the door to
the sort of talent that is often excluded. Women and immigrants
and the disadvantaged can make a huge contribution, yet today
they are often under-represented in the entrepreneurial
community. Of the young entrepreneurs surveyed in the EY G20
Entrepreneurship Barometer, 84% believed that raising
awareness of their role as job creators improves public
attitudes, and it can encourage others, from all walks of life, to
follow their example.
Positive mainstream views about

entrepreneurship are needed to attract
young people
For young people, the perception of entrepreneurs in the media

is particularly important, especially in the digital media.
The key recommendation is to create a positive narrative
around entrepreneurship to help engage young people from an
early age.
Invest in initiatives that develop market leadership in specific

areas (e.g., innovative technology) for the country or region,
targeting and enabling young entrepreneurs to flourish at
the start-up stage, and that promote the value of
entrepreneurship to society and in particular youth.
Promote entrepreneurship opportunities through an

integrated approach, combining government and industry
in particular.
Target and educate unemployed youth about the

opportunities entrepreneurship can bring them.
Publicly celebrate young entrepreneurs success and

international promotion of domestic start-ups and
entrepreneurial firms.
Integrate media/cultural campaigns with a broader national

strategy that promotes the link between job creation and
entrepreneurship.
80. Inclusive entrepreneurship, European Commission, Europe Economic and Social Committee, ec.europa.
eu/social/BlobServlet?docId=9686&langId=en2012, p. 6.
36

Brazil: Startups and Entrepreneurship Ecosystem
Development (SEED) initiative
Last year, the state government of Minas Gerais launched the

SEED initiative. The state assembly passed a law to offer a
US$34,400, equity-free grant to early-stage start-ups, from
Brazil and abroad, that will have a base in Minas Gerais. The
objective is to turn the state into Latin Americas leading tech
hub, by fostering its entrepreneurial culture while supporting
new and innovative technology ventures.81
Performance: The SEED program integrates culture with other
key drivers of entrepreneurship, and 40 companies from the
programs first two rounds have received equity-free seed capital
over six months to build their business.
France: French Tech certification program

jobs for youth.
The French Tech certification program82 was officially launched

in January 2014 and builds on the digital districts venture. It
aims to encourage the development of digital start-ups in France,
by providing them with digital ecosystems throughout the
country. These ecosystems need to reach a critical size and be
sufficiently dynamic to bring together a substantial body of firms
with high growth potential. As part of French Tech, 15m will be
allocated to the international promotion of these ecosystems.
South Africa: Youth Entrepreneurship Promotion and

Awareness Programme
jobs for youth.
The Youth Entrepreneurship Promotion and Awareness

Programme forms part of South Africas 10-year Youth
Enterprise Development Strategy, which was launched last year.
It targets young people throughout the country, particularly
those who are unemployed, and encourages them to view
entrepreneurship as a suitable way of obtaining employment and
economic opportunities.85
Performance: This information is not available currently as the
program only launched in November 2013.
Indonesia: Mandiri Young Entrepreneur Program

Bank Mandiri, owned by the Government of Indonesia, runs the

Mandiri Young Entrepreneur Program. The program searches for
new entrepreneurs by delivering entrepreneurship modules in
state and private institutes of higher education, holding
workshops and the presenting awards. Young entrepreneurs are
supported by entrepreneurship training, coaching and
promotion.86
Performance: Since its launch in 2007, the program has
supported 15,000 entrepreneurs.87
Performance: Technology start-ups have significant payoffs for

the French economy.83 Furthermore, the initiative, which focuses
on promoting a culture of digital innovation, captures a
groundswell in public sentiment on the issue.84
81. Slideshare, http://www.slideshare.net/prioridadesestrategicas/seed-ingles, accessed 5 June 2014.

82. The French Tech - Working and succeeding in France, The official website of France, http://www.france.fr/en/working-and-succeeding-france/french-tech.html, accessed on 5 June 2014
http://www.usatoday.com/story/tech/2014/03/10/ozy-paris-tech-startups/6257647/, accessed 5 June 2014.
83. Liam Boogar, France Digitale launches with a *bang*: French Startups make 1 Billion Euros per year! Rude Baguette: Frances startup blog, http://www.rudebaguette.com/2012/07/03/
france-digitale-launches-with-a-bang-french-startups-make-1-billion-euros-per-year/, 3 July 2012.
84. Vivienne Walt, Fleur Pellerin Works to Make France Safe for Tech Startups, BusinessWeek,
http://www.businessweek.com/articles/2013-12-19/french-minister-fleur-pellerin-advocates-tech-startups#p3, 19 December 2013.
85. Note by the UNCTAD secretariat, Entrepreneurship and productive capacity-building: Creating jobs through enterprise development, for Investment, Enterprise and Development
Commission: Sixth session, Trade and Development Board, Item 4 of the provisional agenda (Geneva), 28 April2 May 2014, http://unctad.org/meetings/en/SessionalDocuments/ciid24_
en.pdf, 17 February 2014.
86. Mandiri Young Entrepreneur, Bank Mandiri website, http://csr.bankmandiri.co.id/en/menu-mandiri-young-entrepreneur-14.html, accessed 5 June 2014
87. Bank mandiri-bank-terbaik-di-indonesia, Slideshare, http://www.slideshare.net/upakarti/bank-mandiribankterbaikdiindonesia (need to validate!) http://article.wn.com/view/2014/02/05/
Bank_Mandiri_Helps_Mold_Thousands_of_New_Entrepreneurs_PT_Ba/, 15 February 2013.
37
Encourage a national, regional and local

culture of entrepreneurship
A significant factor in enabling digital start-ups, which have been

one of youth entrepreneurships major successes, is to create
tech hubs and encourage the development of tech hubs and
other entrepreneurial ecosystems. The success of Tech City in
Londons Shoreditch, Berlins Silicon Allee, and Moscows
Skolkovo demonstrate the value of the principle established by
Silicon Valley. There is a limit to what local or national
governments can do to initiate these movements of individuals,
but they can certainly encourage their development as
evidenced by programs in France, Brazil and elsewhere.
The key recommendation is to encourage and foster hubs,
incubators, accelerators and networks to bring relevant talent
together and networks to bring relevant talent together.
Start early. Influence the discussion among young people

while they are still in school and at university. Promote
through an outreach program.
Promote organizations and environments that will positively

influence public perception of entrepreneurship.
Bring together innovators and commercial organizations to

showcase high-tech start-ups.
Launch initiatives to promote a culture of entrepreneurship

linked to SMEs.
Encourage national and local entrepreneurial and networking

associations.

Canada: Youth Entrepreneurship Fund
Ontarios Youth Entrepreneurship Fund is providing CAD45m

over two years and seeking to generate nearly 6,000 mentorship
and job opportunities. The fund focuses on three priority areas:
mentorship, seed-stage capital, and of particular importance in
promoting an enterprise culture high school entrepreneurship
outreach. It is provides a number of programs, including:
resources and money to start a business; micro-lending for
women and accelerator funds that provide investment capital
and network support.
Performance: The fund was launched in October 2013 and
offers young people between 18 and 29 up to CAD25,000 to
help them start their own business.
Australia: Innovate NSW

The New South Wales (NSW) government has unveiled Innovate

NSW, an AUD6.7m scheme aimed at backing cutting-edge
start-ups that specialize in enabling technologies. It will fund a
number of consortia that must consist of three entities: an
innovator, an end-user to test the solution, and a partner
company that will research or scale the product. Australian
Innovation Showcase will provide support via seminars and
networking.
Performance: Innovate NSW Collaborative Solutions provides
grants of up to 25% of project costs (to a maximum of
UAD100,000) to consortia to develop an innovative, new-tomarket, B2B solution.
38
Germany: Building on SMEs initiative
Mexico: The National Entrepreneurs Institute
G20 country profile: Quadrant 1 has stronger economic growth and higher


The Federal Ministry for Economic Affairs and Energy has

launched a new SME initiative called Building on SMEs: greater
responsibility, greater freedom. It targets seven areas that are
seen as crucial for the commercial success of SMEs. One of those
areas is Business start-ups and business succession, which
aims to ensure the long-term dynamism of Germanys SME
sector by nurturing a strong entrepreneurial spirit. Working
together with the private sector, the Ministry has launched
Grnderland Deutschland, which can be translated as
Germany a nation of entrepreneurs. It is intended that to
give renewed impetus to German start-ups and
entrepreneurship.
The National Entrepreneurs Institute (NPI) aims to implement,

execute and coordinate the national policy on entrepreneurship
to support entrepreneurs and microenterprises and SMEs,
fostering innovation and competitiveness in national and
international markets.89
Performance: The government announced that, through the
NPI, approximately US$550m will be invested on training over
4,000 Mexican enterprises.
Performance: Forming part of the annual German

Entrepreneurial Week, Startup Week 2013 was geared
specifically to young tech companies.88 Over 1,800 events were
held across Germany, in which experienced start-up founders
were able to share their knowledge and experience.
88. Third Annual Entrepreneurial Week Begins in Germany, Germany.info website,

http://www.germany.info/Vertretung/usa/en/__pr/P__Wash/2013/11/18-Startup-Week.html, 18 November 2013.
89. Pledge Fulfilled: National Entrepreneurs Institute, Mexico Presidencia de la Republica website,
http://en.presidencia.gob.mx/pledge-fulfilled-national-entrepreneurs-institute, 11 January 2013.
39
Developing an
entrepreneurial
ecosystem
Many of the best practices evident in this report show a

combination of groups working together. Governments working
together with the private sector, and at times, established
entrepreneurs, to improve support for youth and young
entrepreneurs.
We see high-profile programs encouraging entrepreneurship in
almost every major city, region and country. However, a painful
gap exists between public leaders new commitment to
entrepreneurship and their regions abilities to intentionally
create programs and processes that will systematically and
measurably stimulate entrepreneurial growth.
For many of the recommendations and actions to have
sustainable impact they need to work as part of a regional
ecosystem, and within a regional ecosystem framework that
fosters and attracts a critical mass of talent, capital and most
importantly entrepreneurial leaders.
Enabling policy environments and funding are needed to
stimulate and build the foundational components or framework
of a regional entrepreneurial ecosystem. Even when there are
strong policy principles and all the ecosystem components are
identified, its not really an ecosystem until there is a network
and a culture of interaction and collaboration.
Ultimately, a culture in the density of interactions and
collaboration emerges among a critical mass of leaders and
actors that are dynamic, self-regulating and fosters the
achievement of entrepreneurs aspirational goals.
Government plays a key role in bringing together stakeholders to
create real dialogue about entrepreneurship and to build
coalitions among stakeholder with coordination of funding for a
lead organization or consortia of organizations at the national
regional and local levels.
Many of the recommendations and actions outlined in this report
need to be embedded within a regional entrepreneur ecosystem,
led or driven by entrepreneurial leaders and catalysts.
40
10
For many of the recommendations

and actions to have sustainable
impact they need to work as part of
a regional ecosystem, and within a regional
ecosystem framework that fosters and attracts
a critical mass of talent, capital and most
importantly entrepreneurial leaders
Key recommendation is to create the foundation for a regional
entrepreneurial ecosystem to flourish.
Provide an overarching ecosystem framework and a flexible

funding model to support regional entrepreneur ecosystems.
Provide funding for a lead organization or consortia of

organizations at the regional level that includes
comprehensive entrepreneurship ecosystem indicators.
Provide funding to regional organizations and have them

work within a regional alliance model comprised of all
entrepreneur service providers (non-profit organizations);
colleges and universities; and all levels of government. They
operated within a coordination framework and meet on a
regular basis.
Emphasize the pillar of entrepreneurial education and skills

development for the 21st century.
Collaborate with business to deliver more robust testing of

entrepreneurs ideas and bring commercially viable
opportunities to market.
Identify a short list of key issues challenging G20 countries

(e.g., trade, export, clean energy, food supply) and create
incentives to attract young entrepreneurs across the G20 to
solve these problems.

Russia: Skolkovo Innovation Center
Skolkovo Innovation Center90 (also known as Russias Silicon

Valley) is a planned high-technology business area set up at
Skolkovo near Moscow. The project is similar to the ecosystem,
Silicon Valley, in the US, providing end-to-end support for new
ventures to develop successfully. The Skolkovo Institute of
Science and Technologys curriculum only offers graduate
degrees and is financially backed by the Russian Ministry of
Finance. It seeks to create tech start-ups and lure corporate
research laboratories with tax breaks and relaxed visas and
customs regulations. It utilizes the infrastructure, resources and
other features of the technology park.
Performance: It has successfully backed 750 start-ups. By
201291 it had US$97m in grants, 750 residents and 49 VC
funds. It also had created 131 intellectual property items. And
had attracted IBM, Microsoft and Siemens to locate to Skolkovo,
and claims to have recruited 52 VC firms.
90. Oliver Staley, Russia teams with MIT on Skolkovo Institute of Science and Technology, The Washington Post, http://www.washingtonpost.com/business/russia-teams-with-mit-on-skolkovoinstitute-of-science-and-technology/2013/05/09/54b31e9c-b5da-11e2-b94c-b684dda07add_story.html, 13 May 2013.
91. Andrii Degeler, Russian tech hub Skolkovo in 2012 by the numbers: $97m in grants, 750 residents, 49 funds, TNW blog,
http://thenextweb.com/insider/2012/12/17/skolkovos-2012-97m-in-grants-750-residents-49-venture-funds/, 17 December 2012.
41
United States: Silicon Valley start-up ecosystem

Silicon Valley is considered the premier center for innovation

and most influential start-up ecosystem in the world.
Entrepreneurs based in Silicon Valley are 19% more likely to
motivate themselves by the vision of changing the world,
rather than just building a good product.92 It is a hub for
high-tech innovation and development and received 46% of
all venture capital investment in the United States in 2012.93
It was formed as a milieu of innovations by the convergence
on one site of new technological knowledge; a large pool of
skilled engineers and scientists from major universities in the
area; generous funding from an assured market with the
Defense Department; the development of an efficient
network of venture capital firms; and in the very early stage,
the institutional leadership of Stanford University.94
Performance: It has 35% more serial entrepreneurs, 20%
more mentors, and capital raised by companies based in
Silicon Valley is 32% higher across all stages of a start-up
compared to the global average of all ecosystems.95 It added
46,665 jobs in 2013, an increase of 3.4% over the prior year
driven primarily by computer hardware design, information
services and the internet industry. Thousands of hightechnology companies are headquartered in Silicon Valley,
including many Fortune 1000 companies.96
92. Startup Ecosystem Report 2012 Part 1, Start-up Genome, via http://blog.startupcompass.co/pages/entrepreneurship-ecosystem-report, 20 November 2012, page 9.
93. Barry J. Kramer and Michael J. Patrick, Venture Capital Survey Silicon Valley Fourth Quarter 2011, Fenwick & West LLP website, http://www.fenwick.com/publications/pages/venture-capitalsurvey-silicon-valley-fourth-quarter-2011.aspx, 15 February 2012.
94. Marvel Castells in Tom Forester, ed., The Information Technology Revolution, MIT Press, 1985, via Silicon Valley, wikipedia, http://en.wikipedia.org/wiki/Silicon_Valley#cite_ref-14.
95. Startup Ecosystem Report 2012 Part 1, Start-up Genome, via http://blog.startupcompass.co/pages/entrepreneurship-ecosystem-report, 20 November 2012, page 9.
96. 2014 Silicon Valley Index, http://www.siliconvalleycf.org/sites/default/files/publications/2014-silicon-valley-index.pdf, accessed 4 July 2014.
42
Israel97: Tel Aviv-Yafo start-up ecosystem
Tel Aviv-Yafo is fostering an innovative and accessible start-up

ecosystem. The ecosystem includes world-class talent, VC
and seed funds; leading hi-tech companies and R&D centers;
start-up incubators; accelerators and co-working spaces; and
informal networking meet-ups and events.98
The hi-tech industry in Tel Aviv-Yafo encompasses more than
1,000 companies (Israeli and foreign), comprising
approximately 23% of all hi-tech companies in Israel. Around
64% of the Israeli hi-tech companies in the city are start-ups.
The hi-tech industry in Tel Aviv-Yafo provides employment to
around 31,000 people.99
Performance: During 2007-11, 635 Israeli hi-tech companies
were opened in Tel Aviv-Yafo. Further, there were 70 exits by
Israeli hi-tech companies located in Tel Aviv-Yafo during the
same period. The value of these exits amounted to over
US$3b.100
97. Since Israel is not part of the G20, it is not included in the diagnostic and no country profile is included.
98. Tel Avivs Startup Ecosystem, Telavivstartupcity website, http://www.telavivstartupcity.com/, accessed 3 July 2014; Startup City Tel-Aviv, Tel Aviv government website, http://www.tel-aviv.
gov.il/eng/Business/Pages/StartupCityTelAviv.aspx?tm=2&sm=39, accessed 3 July 2014.
99. Tel Aviv-Yafo - An International Centre of Innovation, Tel Aviv government website, http://www.tel-aviv.gov.il/TheCity/Documents/Britain-Israel%20Publication.pdf, accessed 3 July 2014; Tel
Aviv: Startup City - Cracking the Innovation Code Work Plan - 2013-2014, Tel Aviv government, http://startupgrind.com/wp-content/uploads/2013/10/Tel-Aviv-Startup-City.pdf, pages 10, 26,
27.p. 27.
100. Tel Aviv-Yafo - An International Centre of Innovation, Tel Aviv government website, http://www.tel-aviv.gov.il/TheCity/Documents/Britain-Israel%20Publication.pdf, accessed 3 July 2014;
Tel Aviv: Startup City - Cracking the Innovation Code Work Plan - 2013-2014, Tel Aviv government, http://startupgrind.com/wp-content/uploads/2013/10/Tel-Aviv-Startup-City.pdf, pages
10, 26, 27.p. 27.
43
Diagnostic
methodology
The EY guide to diagnosing youth unemployment provides a

framework for assessing the youth employment challenge in G20
countries, recognizing the different economic conditions and
youth employment dynamics from market to market.
The aim of the diagnostic is to guide assessment of the type of
youth employment challenge for G20 countries. The framework
shows the relative position of G20 economies across speed of
economic growth or their capacity to create employment for
youth, and across quality jobs for youth or their ability to
provide skilled, secure employment for youth. G20 countries are
segmented into four quadrants, reflecting their relative positions
on speed of economic growth and on quality jobs for youth. In
recognizing the differences in context for the youth employment
challenge across economies, the objective of the diagnostic is
also to guide specific policy recommendations for governments.
The report presents actionable strategies for these policy
recommendations for each quadrant.
Methodology
The diagnostic scores G20 countries on the speed of economic
growth and on quality jobs for youth based on the following
metrics. The constituents reflect key International Labour
Organization statistics on youth employment rates and decent
employment.

Labor force participation (youth)
Unemployment rate (youth)
Inactivity rate (youth)
Employment to population ratio (youth)

Share of youth unemployment in total unemployment (total
economy)
Level of economic vulnerability101 (total economy)
Gap in employment-to-population ratio (youth/adult)
Ratio youth/adult unemployment (youth)
Secondary-educated youth labor force (youth)
Tertiary-educated youth labor force (youth)
101. Informal economy, International Labour Organization website, http://ilo.org/global/topics/

employment-promotion/informal-economy/lang--en/index.htm, accessed July 2014.
44
For speed of economic growth and quality jobs for youth,

the constituents are normalized on a 1 to 10 scale, using
min-max normalization. A score of 10 indicates the strongest
result across the G20 group and a score of 1 indicates the
softest result.
9*((Variable-MIN(Variable Series))/(MAX(Variable Series)MIN(Variable Series)) +1
For the speed of economic growth and quality jobs for youth
pillars, the constituents are aggregated using a geometric mean,
to provide a final score for each country on each pillar. The
geometric mean is used in place of a regular mean to avoid
outsized contributions to the final score from individual
constituents.
Countries are segmented into four quadrants based on their
scores for the speed of economic growth and quality jobs for
youth metrics. The median score for speed of economic growth
and quality jobs for youth is used to define higher and softer
performers on each measure. The quadrants are described in
Figure 1. It is important to highlight that the scores and
quadrants reflect the relative position of G20 economies on the
model constituents this is not an absolute assessment of
performance.
Figure 1: The EY guide to diagnosing youth unemployment
quadrant key
1
Stronger economic activity, higher quality jobs

for youth
Stronger economic activity, softer quality jobs

for youth
Softer economic activity, softer quality jobs for youth
Softer economic activity, higher quality jobs for youth
The scores and quadrants of G20 members

Quality jobs Speed of Youth
for youth economic population
growth
Quadrant
Argentina
4.7
5.8
6,765k
Australia
6.8
9.8
3,166k
Brazil
5.4
8.9
33,399k
Canada
7.3
9.0
4,559k
China
3.8
8.4
224,437k
France
6.9
4.9
7,862k
Germany
6.5
7.7
8,975k
India
2.4
5.7
231,577k
Indonesia
1.9
6.8
41,185k
Italy
5.3
3.0
6,069k
Japan
8.6
6.5
12,483k
Korea,
6.2
Republic of
4.0
6,698k
Mexico
7.3
22,224k
5.7
18,974k
1.6
4,652k
1.6
10,011k
4.5
5.6
12,642k
6.5
7.9
7,927k
7.2
7.2
44,168k
6.2
Russian
6.8
Federation
Saudi
2.3
Arabia
South
4.3
Africa
Policy implications
Turkey
The EY guide supports tailored policy recommendations by

quadrant. The high-level differences across quadrants are
represented in Figure 2.
United
Kingdom
United
States
Figure 2: The EY guide to diagnosing youth unemployment

quadrants and policy implications
1
Sustain economic performance; sustain/grow

competitive advantage
Sustain economic performance; focus on skills gap

and employment quality
Improve economic performance; focus on skills gap

and employment quality
Improve economic performance; sustain/grow

competitive advantage
Quadrant key
1
Higher growth, higher quality
Higher growth, lower quality
Lower growth, lower quality
Lower growth, higher quality
45
EY | Assurance | Tax | Transactions | Advisory
Contacts
Maria Pinelli
Global Vice Chair, Strategic Growth Markets, EY
maria.pinelli@ey.com
George Atalla
Global Leader, Government & Public Sector
george.atalla@ey.com
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For more information about our organization, please visit ey.com.
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Part 2

Avoiding a lost generation

Ten key recommendations to support

Setting the scene

Tax and regulation

Avoiding a lost generation: ten key recommendations to support youth entrepreneurship

In December 2013, Australia assumed the role as Chair of the

Removing barriers for SME entry and growth

The priorities under Australias G20 chairmanship (sustainable

The G20 has accomplished much since its inception. But we

The G20 YEA is very pleased to assist and build on the

The G20 Young Entrepreneurs Alliance (G20 YEA) is a

Cutting US$1b in red tape

We are particularly thankful and excited about the depth,

Building the infrastructure needed for the future

CSIRO SME Engagement Centre

Entrepreneur and President, G20 YEA

Providing information to make it easier for SMEs to grow

In recognizing the differences in context for the youth

Leveraging initiatives already successfully deployed in other

Using this new guide, and drawing on our own extensive

The EY guide to diagnosing youth unemployment 1

Speed of economic growth

Quality jobs for youth

Our messages to G20

Best practice case studies

Key recommendation: Create funding mechanisms, either

Futurpreneur Canada (Quadrant 1)

Facilitate access to collateral-free capital for young

Best practice case studies

Key recommendation: Create strong relationships and provide

Understanding Finance for Business initiative

Seed Enterprise Investment Scheme (Quadrant 1)

Early Stage Innovation Fund (Quadrant 1)

Canada Accelerator and Incubator Program (Quadrant 1)

Best practice case studies

StartUp Loans Scheme (Quadrant 1)

Internet Initiatives Development Fund (Quadrant 4)

Foster start-up programs mentored by academic institutions

Skolkovo Innovation Center (Quadrant 4)

Female Youth Entrepreneurship Program (Quadrant 1)

Adopt a coordinated approach to start-up financing.

Finance for Youth-Owned Businesses (Quadrant 3)

Best practice case studies

Micro and small enterprises (MSE) business finance

South African Microfinance Apex Fund (Quadrant 3)

Banking on Women initiative (Quadrant 2)

Reduce the financing gap for female entrepreneurs by offering

Loan packages for young entrepreneurs (Quadrant 3)

Tax and regulation

Best practice case studies

Seed Enterprise Investment Scheme (SEIS) (Quadrant 1)

Small business personal income tax credit (Quadrant 1)

Develop tax incentives to support and advance these schemes.

Early Stage Venture Capital Limited Partnerships

Business angel tax incentives (Quadrant 3)

Drive a government procurement scheme which includes

Support enterprise collaboration, and procurement

Youth Employment Tax Incentive (Quadrant 3)