Governments all around the world face critical challenges to reduce unemployment and poverty (see world map of unemployment distribution below) (Guillén 2001). According to the ILO, the number of working poor—those unable to earn enough to lift themselves and their families above the US$2/day poverty line threshold per person—may constitute 45 percent of the worlds’ employed. The worst-case scenario shows 53 percent of the employed population in vulnerable employment. Further deterioration in the global economy may push as many as 200 million workers, mostly in developing economies, into extreme poverty—below the $1.25/day poverty line threshold. The United Nations Millennium Development Goals have set clear targets saying that 

> The proportion of the population whose income is less than $1 must be halved
> Full and productive employment and decent work must be achieved by all

The past years have caused an economic and labor market crisis which plagued the world since 2008. The labor market slowdown is dramatic with a current deficit of around 50 million jobs in comparison to the pre-crisis situation (ILO 2012). The crisis has paralyzed enterprises and forced millions of people into unemployment. Since the economic crisis, more workers have been finding themselves and their families living in extreme poverty, partly due to the vulnerable employment relationships or even unemployment. In addition, the lack of opportunities for decent work disproportionately affects youth and women.

The International Year of Youth (2010/2011) comes at a time when global youth unemployment rate is at an all-time high. According to a recent report published by the International Labor Organization (ILO), of the 620 million economically active youth between the ages of 15 and 24, 81 million were out of work at the end of 2009. There was a noticeable increase of over 2% from the 2007 figures of 11.9%, therefore making this the highest rate ever. With economies worldwide still recovering from the recent 3 year economic slump, the ILO predicts there will be huge numbers of unemployed youths adding to this number (ILO 2010). 

Developing countries account for almost 90% of the world’s youths. The ramifications of high numbers of youth unemployment are much worse than in developed countries, with a serious threat of social disruption. Individually, figures of youth population may more than double by 2050 according to Carl Haub, senior demographer at the Population Reference Bureau (PRB). “Young people are the drivers of economic development […] Forgoing this potential is an economic waste and can undermine social stability” stressed Mr. Juan Somavia, ILO’s General Director. Far from being the drivers of economic development, nevertheless, in the case of development processes for most developing nations, these youths are undoubtedly the building blocks of the future.
Youth unemployment rates do not have to end in a catastrophe for those generations labeled the Millenials (Generation Y: 1982-1990) and the Internet Generation (Generation Z: 1991 – present) and those it sustains. They might actually benefit from the situation if policymakers can incentivize and support them to follow their dreams. There are already significant numbers of young people who would rather start their own business instead of working for someone else. However, governments around the world are not yet ready to regulate and sustain this trend in the labor market. 

Entrepreneurship is an important driver of economic prosperity and social well-being, creating jobs and economic competitiveness (Monitor Company Group 2009). In 2003, SMEs accounted for roughly 66% of employment within the EU (34% from micro enterprises with less than 10 employees) (Eurostat 2010). Evidence suggests that the entrepreneurial intentions and founding rates among the unemployed are high and the survival rates of their firms impressive. For instance, formerly unemployed founders are responsible for 62% of new firms created in Germany, 30 % in Sweden, and 15 % in Austria (SCB 1994; Institut für Mittelstandsforschung 2005). Firms created by the unemployed even seem to have slightly higher survival chances than other types of new firms (Brüderl, Preisendörfer and Ziegler 1992).

While many countries have initiated programs to tackle the above-mentioned problems on the labor market, few countries have true control of the situation. Entrepreneurship programs are on the uprise and governments as well as schools and universities see an increasing importance of entrepreneurship in helping establish and maintain tomorrow’s jobs. One approach that has proven to be successful in Western countries is policy programs to help transition unemployed individuals into self-employment. Various countries have set up similar policy solutions with comparable features such as financial assistance in the form of a government stipend equivalent to the unemployment, tax incentives, coaching and training (Benus, Johnson, Wood et al. 1994; OECD 1995; Blanchflower and Street 2004)

While entrepreneurs are the ones that implement change, they alone cannot be held responsible for creating the next steps in societal evolution and the development of tomorrow’s jobs. There are many varied factors that influence entrepreneurship, ranging from economic and political to socio-cultural ones. Therefore, when discussing entrepreneurs as the agents of change, it is at least as important to discuss the environment in which they want to, or have to, create these changes. What changes have to take place on a political level to foster entrepreneurship and promote entrepreneurially-minded people in their endeavors?

The startup genome project has raised a lot of attention over the past months. Despite the fact that scholars in the domain of entrepreneurship research have understood already more than a decade ago, that there is no such prototype entrepreneur who can be genetically analyzed and put into a box, it is still in the belief of mankind that there has to be something characteristic and unique about an entrepreneur. And of course, there are a lot of personality traits, individual- and environmental factors that predispose an individual to become an entrepreneur or not. Bright scholars such as Scott Shane have recently started looking into the genetics of entrepreneurs again. It will be interesting to see what evolves from this research.

Here we want to reflect on a Techcrunch report posted yesterday about the book "Venture Capitalists at Work". They have identified five Must-Know Facts for Entrepreneurs:

1. Big Bold Ideas (Non-consensus Idea)
Entrepreneurs must not be afraid of being contrarian. Only those who dare to fail greatly can ever achieve greatly. If you have consensus with everyone around you, you can most likely assume that the idea is not that framebreaking... Find this big, bold idea which knocks everyone off the chairs. Create something where people will discuss and think about.

2. AIM (Authenticity, Integrity, Motivation)
Money alone cannot motivate an entrepreneur enough to drive him for years and years through ups and downs. The entrepreneur has to be genuinely motivated and passionate. Else, he or she will not succeed in the long-run. Authenticity is a result of hard work. In alignment with Malcolm Gladwell's 10k Hour Rule which defines when you are an expert, you need to work really really hard to become an expert people listen to. And it is only then that your company will take off on a sustainable track. 

3. A+ DNA (Winning Team)
The most important element of all (and it is often overlooked) is the early venture team. The first 10-12 employees truly decide the venture's trajectory. They determine the DNA of the company. It is wrong to get people early on which have to be trained and shaped into what is believed is the company DNA. They have to be part shaping the company to truly get the project off the ground.
“I think what matters most is team culture and unit cohesion. I almost always in some ways recruit the personality type as much as functional skill,” says Rich Wong of Accel Partners in Venture Capitalists At Work. “I have a triangle in my head — functional skill, raw intelligence, personal turning radius. Smart, hard-working, and paranoid together kind of radiates raw horse power.”

4. RIP (Rapid Interations & Pivoting)
The speed at which a new venture acts is of utmost importance. Long negotiations and decision processes distract the team from what is really important - making money and serving customers.

5. Objectivity & Adaptability
It is important to be true and honest to oneself the company at any time - even if this means throwing away uncounted hours of work after having realized one has run in the wrong direction. So what...other people watch TV and most certainly have learn't not even a mentionable fraction of what you as an entrepreneur just went through. This is again where RIP comes in. Successful entrepreneurs rapidly reflect on what has happened and adapt flexibly to a new situation. 


It is a nice reflection of what is really key. And if you have started a company before, you will most likely have learnt something just by reading and reflecting on these five points. As a nacent entrepreneur one tends to blind oneself from the truth and try to go with a second-best solution simply because it is more convenient. One aims at consenting with everyone around in order not to be thrown off the track. Get out of your comfort zone and dare to go against the grain!!!

On May 5th, the Handelszeitung has published an article which discusses why a success such as Facebook would never be possible in Switzerland. They summarized the following reasons:

1. Everything is way too expensive
Everything, ranging from rent, administrative and legal support as well as human capital is extremely expensive in Switzerland. For a startup, it is basically impossible to handle all these issues on a competitive and sufficiently professional manner without adequate funding. 

2. A Lack of Cash
Despite the fact that Switzerland is the country of banks, there is little cash available for high potential startups. While you can easily get some "pocket money", the really big deals with double digit million CHF investments do not exist. But this is exactly what it takes to build globally competitive companies. The Samwer brothers with Rocket internet have shown, also if often under critique for their clone factory approach, that with sufficient money you can quickly grow a company to be successful. Of course, it needs to be paired with the right leadership!

So, if young companies aim big and want to build a global company, they only have the chance to look for money outside of Switzerland. A good example of this is Poken. Having started in Switzerland they had their initial funding on site and started growing the business. Just recently they announced that they will move their HQ to Palo Alto...

In order to change the trajectory Swiss internet startups can take, investors need to stop sitting on their money trying to incrementally multiply it, instead of hitting for the big shots and in turn take some risks...

Read the full article here (in German!).