Administrative & Regulatory Environment and Youth Entrepreneurship

Most countries have recognised the need to provide focus and assistance to building Youth Entrepreneurship in their societies. A lot of effort has gone into building and nurturing Entrepreneurial spirit through education at school and college levels. Such efforts have also been backed up with specific training programs and media campaigns to sustain the effort in encouraging and empowering Youth entrepreneurship.

A lot of researchers have focussed on understanding the barriers and obstacles faced by Young Entrepreneurs in their efforts to start their own enterprise. Apart from lack of the required business skills and knowledge, non availability of easy debt financing schemes and administrative formalities have emerged as the major obstacles deterring the Youth from attempting to start their businesses in formal sectors. Many prefer to start small ventures in informal sector thus avoiding getting into the documentation and procedures required for bigger enterprises.

Administrative & Registration Requirements

In case of developed countries, the regulatory environment and the business compliance requirements are very many and complex. A lot of time and effort needs to be spent continually by the entrepreneur in order to be compliant. The cost and effort of becoming compliant involves a lot of time which the entrepreneur can ill afford.

To start a new business venture one needs to go through numerous administrative processes to obtain business registration, licenses, deal with legal and copyrights, building approvals and permits, obtaining clearances from municipalities as well as safety and HR compliance in all respects.

The list of agencies and departments involved and the compliance process can be varied and numerous. The number of registration requirement from various agencies varies from country to country, from minimum of two up to twenty registrations in countries like Uganda, Paraguay etc. While there are no administrative costs involved in such registrations in some countries like Denmark, the same costs can be very high in few other countries like Yemen, Syria etc.

In case of new entrepreneurs, they lack the knowledge as well as the time and resources to follow through all the procedures while having to attend to other more pressing matters of their business.

Very often small time entrepreneurs are likely to overlook or get into informal sector and get into grey market where they find it easier to operate and earn profits in a short term. If an individual were to take up this route, there is little chance that he will establish and grow an organisation in future.

Bankruptcy Laws

Bankruptcy laws in several countries are very severe when it comes to the penalties imposed on businesses that go bankrupt and fail. The cost aspect along with the inordinate delays and time taken in the procedures can prove to be an inhibitor to youth entrepreneurs who would rather play safe than take such personal risks.

Business failures are very real and the youth at an age group of 18 to 29 years do not have sufficient experience and confidence to back them up. Not all youth are reckless and risk taking when it comes to choosing a self employment opportunity with such risks.

Copyright, Patent & Trademark Regulations

Many young entrepreneurs who have started their own ventures to promote their innovative products, designs and software etc have found it very hard and expensive to deal with Copyright and Patent issues. Obtaining patents is a very expensive proposition and time consuming too. In technology and other areas like pharma and medical sciences, young entrepreneurs can loose out on their inventions and products to competition and bigger players due to their inability to obtain patents in time.

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