Youth In Business, Can They Excel

By Mohd Reza

The concept of Youth does not have a unified definition and this is especially so for the age group categorization. Depending on the respective organizations or programmes, Youth age categorization can range from 15 years right up to a maximum of 40 years of age. Taking a few examples, the United Nation defines Youth as people between the ages of 15 to 24 years old whereas certain political parties which have a Youth division/arm categorizes it as people below the age of 40.

Differences arise due to the fact that a high percentage of engagements with youth, apart from the government, has been with the NGO’s and other social development organizations (private sector). Their set definitions of the Youth age group (which would be aligned to their organizational goals) would result in a pre-conceived conformity if not informal agreement within the public sphere. For this article, in relation to youth business and entrepreneurship, youth is commonly defined as persons below 30 years of age.

Youth in business have taken a further significant relevance in the 21^st century. Technology was and still is the primary instigator for entrepreneurships which led to birth of numerous Fortune 500 companies today. Beginning with the shift of manufacturing hegemony of the United States to the technological centric industries led by the Japanese corporations (followed closely by South Korean ‘chaebol’), the birth of Silicon Valley in the 80’s represents the birth of technological entrepreneurship and new forms of funding and investments (venture capitalist). Major world economies have evolved into more saturated interconnected economies where no single country has a clear or significant dominance of a particular industry.

These evolutions have led to a rather favorable environment for increased participation and success of youth in business. They include:

1. Niche Products/Market Conditions – Current market is defined as more susceptible to rapid changes and receptive to new and novel products. Product loyalty is not the dominant feature of consumerism and is replaced with price consciousness and value assessment. The spending power of the youth group has also significantly risen in recent years contributed by the emerging economies ‘young demographic’ (namely China, India and Indonesia) and this creates new market category. From tamagochi (virtual pet device), to simplest form of ‘coloured rubber bracelet. Innovation is the key feature of a high number the companies that excel in the present state of business environment. Most are nimble companies (small companies) that can adjust to the rapid changes of demand in the market. The saying goes that “No one understands the youth better than the youth themselves”. Understanding the market needs and the ability to make sound market predictions and adapting to it quickly represents a huge edge for any business in the present economic climate especially those serving the niche sector
2. Ideology Change/Paradigm Shift – ‘New way of doing business’. That business today are more than just profit seeking entity and that it has evolved to beyond providing quality products and services. For instance, most businesses today have embraced the need to be ‘socially responsible’, that Gen Y consumers are sensitive towards products and services that are harmful to society and the environment. This ‘socially responsible’ concept can sometimes be strategically packaged as a company’s marketing initiative.
3. Technology – Forms as the means for production and distribution or function of product itself (usually related to ICT). Technology could also lead to substantial decrease in operational costs for businesses which in turn enabling better growth potential. Every aspect of a business can benefit from technological innovation and this includes services such as online/web based accounting systems and web transaction platforms (eBay and other online forums), right up to the payment method systems (Paypal).
4. Government initiatives – Several programmes in place are designed to meet certain objectives most commonly to instigate growth in the SME sector and means to ease unemployment. These programmes are mostly in form of provision of funds or grants or mentoring programmes which seeks to increase the competencies of the businesses to remain competitive.

These are the 4 basic fundamental factors that have lead to numerous success stories in youth entrepreneurship. It is evident that these factors are very much relevant today and that budding young entrepreneurs can still succeed through strategic management of these factors. Citing present success stories of youth in business which have benefitted from one or more of the factors above include YouTube (sold for USD 1.65 billion less than 2 years after it was founded), Facebook (exceeding 500 million users as of 2010) and Google (market value of above USD 180 billion)

But it is not always the case of glory and fame for all youth in business. The risk of failure exists in any business ventures and the significant causes include the effect of fast changing market trends or simply flawed business strategies. With the advent of Globalization and Free Trade agreements, the effects of imitation, competition from abroad and fast changing market trends have pose greater challenges to not only the youth entrepreneurs but also to the business eco-system as a whole. Citing an example closer to home, the JooJoo tablet which was slated as a direct competition to the successful Apple iPad had lost its huge potential market share earlier this year due to several delays to its product launch as a result of ‘logistical and manufacturing issues’.

To mitigate these risks, aspiring and existing youth in business can resort to seeking assistance in areas beyond their expertise or competencies especially concerning business operations and management. These assistance takes form government programmes such as mentoring (in areas such as marketing, branding, human resource manage and ICT areas), training and grants, and business operating tools (mostly in a form of software) which is amongst the reason ‘cloud computing’ is gaining in prominence. These tools are not only meant to save costs in terms to capital invested but also in relation to enhanced efficiency and productivity. With a conducive environment in place and proper tools at their disposal, youth have every opportunity to compete and succeed in business.