[Viewpoint] Youth Employment and Startups

The job issue for young people is becoming more serious as the momentum of the novel coronavirus infection (COVID-19) does not subside. According to Statistics Korea's 'Employment Trends in March 2020,' the number of employed people in February 2020 was 26,609,000, a decrease of 195,000 compared to the same month of the previous year. The number of employed people aged 15-64, according to the OECD standard, decreased by 393,000, and the number of employed youth aged 15-29 also decreased by 229,000. South Korea has the highest youth unemployment rate among OECD countries, exceeding 10%, and the closed recruitment market of domestic companies is unlikely to open easily in the second half of the year. Students graduating this year are expected to set a record for the worst unemployment rate.

The government recognizes this serious situation and is implementing policies to expand recruitment and support university student startups. Since 2011, the Ministry of SMEs and Startups has supported universities through the Startup Leading University program (currently the Early Startup Package Support Project), the Ministry of Education supports through the Leaders in Industry-University Cooperation (LINC+) project, and the Ministry of Science and ICT supports through the Korean-style I-Corps project. Among local governments, Seoul City is fully supporting youth startups at over 40 universities in Seoul through the Campus Town project, steadily increasing university student startups. In 2017, the number of student entrepreneurs increased by 26.8% to 1,684 compared to the previous year, and the number of student startup companies increased by 26.2% to 1,503.

The scope of startup support activities conducted by the government and universities can be broadly divided into three categories. The first is providing learning about the knowledge and skills required for startups through education. The second is the process of recognizing startup opportunities or developing business ideas for students who have learned to some extent through education. The third is business support that provides funds, networks, infrastructure, and other necessities for startup companies to carry out actual startup activities.

However, the startup support functions of our universities are still insufficient. Startup education is handled as some liberal arts courses in universities, and even those are all operated with government policy support. The occupancy of startup incubation centers is much higher among the general public and faculty members than students. As a result, when university students start businesses, many startups are in simple service sectors rather than technology-based startups. How can we lead youth startups more successfully after COVID-19? The author suggests the following.

First, the business model development process is the most important. A business model refers to the idea of how to conveniently provide a product or service to consumers, how to market it, and how to make money. For the successful execution of a business model, mentoring by experts in each field is important. Consulting and mentoring on business models by professional mentors are necessary.

Second, we must prepare a startup ecosystem that produces market-driven global unicorns. Not only science and engineering universities but the entire university should organize startup schools as regular courses, and opportunities to experience entrepreneurship programs should increase from elementary, middle, and high schools. In South Korea, startup education is often composed and implemented as extracurricular courses. Startup courses should be made regular curriculum, major courses, or required courses so that science and engineering students must take them.

Third, startup spaces should also be provided to prospective young entrepreneurs. Most universities do not provide space to prospective entrepreneurs due to lack of on-campus space. Prospective entrepreneurs can move toward more successful startups by incubating in startup support spaces such as incubation centers. One of the biggest difficulties for students who want to start a business is the lack of space to do so.

If this trend, directly hit by COVID-19, continues, many university students will become unemployed immediately after graduation. Startup is a field with more risks of failure than success. Therefore, it is difficult to take the initiative. A ship is safest when docked. However, if the ship only stays docked, it cannot achieve its original purpose. I hope that the government and universities will bear many of the risks of startups so that our youth can create more success stories through startups. / Kim Kyunghwan, Professor, Graduate School of Global Entrepreneurship, Sungkyunkwan University

This content was produced with the assistance of AI translation services.