Uncorking enterprise: Policymakers are desperate to promote enterprise. A new index could help

The Economist
Resource Type: 
Publication Date: 
Feb 24, 2011

THE firestorm in the Middle East was sparked by a single act of protest: Muhammad Bouazizi, a young Tunisian fruit-seller, set himself on fire when municipal inspectors made it impossible for him to eke out a modest living. He later died of his injuries.

Since then the fire has found all sorts of fuel, from the Arab street's desire for democracy to its revulsion at doddering kleptocrats. But Mr Bouazizi's problem has never been far from people's minds. More than a third of the region's young people are unemployed, it is estimated. Even more are stuck in dead-end jobs.

High youth unemployment is not confined to the developing world: 20% of young Britons and 40% of young Spaniards are resting. But the problem is explosive in countries that combine lots of youngsters with fragile institutions. The labour force in the developing world (minus China with its one-child policy) is set to increase by 50% by 2050. In sub-Saharan Africa it is set to double.

How to find work for all these young hands? The answer may lie with entrepreneurs. High-growth start-ups are the best generators of new jobs (the Kauffman Foundation, an American outfit devoted to entrepreneurship, calculates that between 1980 and 2005 nearly all net job creation in America took place in firms that were less than five years old). They are also the firms most likely to raise productivity, a basis for economic growth. They create jobs that did not previously exist and solve problems that people assumed were part of the natural order of things.

Enterprise Development
Middle East & North Africa
Conflict Area