The halcyon days when education in Kenya would get you a ticket on the gravy train might as well be over. The rate of unemployment amongst well-educated youth in this country is truly mind-boggling. And even those with jobs don’t earn fair wages to afford them decent standards of living. An emergency in the form of an illness or accident could lead them into debt or utterly throw them off. Oftentimes, entrepreneurship and self-employment are bandied around as solutions to this monumental unemployment crisis. The youth are told to stop complaining and create their own jobs. Bill Gates, Mark Zuckerberg and Steve Jobs are used as examples to demonstrate how getting a college degree is not necessary and entrepreneurship is the surest way to financial success.
According to the International Labour Organization (ILO), the world’s poorest countries have the highest rate of self-employment. The rate of self-employment in developing economies in Sub Saharan Africa and Southern Asia is about 72% whereas in developed economies in Northern America and Europe— the rate of self-employment is about 10%. Despite its reputation as the home of entrepreneurs, the United States has one of the lowest levels of self-employment. Only 10.1 percent of the total U.S. population can be considered as self-employed, including those who have incorporated their businesses and those who have not. Essentially, most of the world’s poor people are self-employed. You are more likely to fail than succeed when you venture into entrepreneurship. When you venture into self-employment you are also likely to lack social security, earn very little, work longer and harder than someone who is in formal employment.
This may sound pessimistic especially in the face of stories and images of successful entrepreneurs. Information circulating in our news feeds on social media, television and motivational talks tend to focus on the few who have made it and overlooking thousands of others who did not. This is typically referred to as survivorship bias. Survivorship bias is a logical error characterized by a strong focus on successful people, businesses and strategies while ignoring those that fail. As a result, those that don’t make it don’t get to add their voice in the conversation. Within this blinkered outlook, we only get to hear from a clique of “the successful” and not those who have failed. Consequently, we get a one-sided view that is not completely representative of how things are on the ground.
In some cases, you will find that a good number of successful entrepreneurs are successful simply because of sheer luck, good timing, genetics, family, environment, background, connections and even shady deals. Why should they be the only ones who get to speak and get to be heard? What makes their version of truth truer? I believe there is just as much to learn from failure as there is to learn from success.
Due to our survivorship bias, we disparage those who are not doing well economically without fully taking into account their circumstances. We scoff at those who chose to pursue education, yet they don’t have jobs. The dominant narrative surrounding youth unemployment is that a large number of youths are poor and unemployed because they are too entitled, lazy and unimaginative to start profitable enterprises. Instead they just want to get papers that will land them white collar jobs. Nothing could be further from the truth than this.
A staggering number of young people in this country have tried their hand in entrepreneurship and failed. Some have failed due to lack of adequate capital, poor infrastructure and forces in the market beyond their control. For others, competition in the market from established businesses and the infiltration of cheap Chinese products in the market brought them to their knees. Others still have their small business running but don’t make much. Sometimes hard work and ingenuity are not enough. Circumstances beyond our control like market forces, timing and environment take over.
Out of one Bill Gates who emerges in the market, there are thousands of others who were similarly smart, skilled and worked just as hard as he did but failed. More than 50% of businesses fail within their first year. A lot of start-ups despite their innovativeness hardly get to survive for 5 years. Against the backdrop of a mainstream culture obsessed with material success, fame and anything flashy, these facts are hardly uplifted.
While we are churning out more university graduates than the available job opportunities in the market, the real solution to this crisis does not rest on individuals getting into entrepreneurship or self-employment. Unemployment in this country is a system issue that has no simple answers or quick fixes. The best bet we have is the government taking radical measures to curb corruption, directing resources towards creating employment opportunities and providing incentives for existing businesses to expand, innovate and pay better wages. We also need to change the tenor of conversations surrounding unemployment. Instead of solely placing the burden on individuals to create employment opportunities for themselves, perhaps more fingers should point towards the State.
First published on October 29 2019 by Daily Nation