The Prospects of Youth Entrepreneurship in the Philippines

Youth have seen to be the great absorber whenever financial crisis strikes the world especially those who are living on and below the poverty line.
During a full-blown crisis, the unemployment level increases abruptly. This is due to the inevitable depression of each company which results to labor reduction. And when companies are not gaining their projected target of profit, they increase the price of their products and/or services which then results to inflation where the poor, most especially, are being affected very much.
Filipinos are known to be very resilient. Not resilient in terms to sudden recovery of economic status quo, but resilient in terms to immunity of crisis’ effects while the situation remains the same.
It has been proven that entrepreneurship is the only solution to optimize the resiliency of an individual to withstand the drastic effects. Not by accepting the fate but by acting to reshape the destiny. Financial crisis, as a matter of fact, results to unemployment. And unemployment gives undesirable results to society in the end.

The Filipino Youth and Entrepreneurships:

Unemployment is the condition of people who are able and willing to work but cannot find jobs (Microsoft ® Encarta ® 2006). Because of this, Filipino youth are not loosing their hope to survive. That’s why; most of them engage themselves to business arts.

There have been some stories of triumph from the youth regarding their engagement to business industry particularly to micro businesses. Micro businesses are those that are easy to handle yet give you more than enough payback. These include the following:

1. Internet café
2. Beauty parlor/Barber shop
3. Carinderia (small fast food chain with home made food)
4. Sari - sari store (small retail store of general merchandise)
5. Vulcanizing shop
6. Small electronics repair shop
7. Bake shop

Unfortunately, the owners of these businesses are those young people came from well-off families. They have been given fund by their parents, have been underwent trainings and most of them took college courses related from their current business such as Hotel and Restaurant Management for Carinderia, Cosmetology for Beauty Parlor, Automotive for Vulcanizing Shop, Electronic Technician/Engineer for electronics repair shop, and Information Technology for Internet café.

Strategic plan regarding the involvement of young people to entrepreneurial world of adults seems unviable to apply to all parts of the world because of the existing impediments and constraints:

Poverty

It is condition of having insufficient resources or income. In its most extreme form, poverty is a lack of basic human needs, such as adequate and nutritious food, clothing, housing, clean water, and health services (Microsoft ® Encarta ® 2006).

Despite of the willingness of a person to start a small business to provide the basic needs of his family, he still can’t do that because there is no enough capital for him to start his own business. Children from rich families have the option to pursue post-graduate education, even though they have the capital for a business enterprise. Those from poor families may have the motive to seek gainful employment from a business of their own, but lack the capital. Additionally, if someone was able to get his capital, there is a possibility that no one would patronize him because people would think that he can’t meet the standards of the products and services they need.

Cultural Differences

Culture, in anthropology, the patterns of behavior and thinking that people living in social groups learn, create, and share. Culture distinguishes one human group from others. It also distinguishes humans from other animals. A people’s culture includes their beliefs, rules of behavior, language, rituals, art, and technology, styles of dress, ways of producing and cooking food, religion, and political and economic systems (Microsoft ® Encarta ® 2006).

Filipino culture tends to look down upon the young, and the youth are praised when they are submissive and deferential to their elders. A young person who proposes to go into business will more probably generate raised eyebrows, than serious support.
Differences in culture, now a days, in fact shows little effect to businesses if an entrepreneur knows what business should engage him. However, it is still a big deal to discuss this for us to know how cultural differences affect the business cycle.

Someone living in a Muslim community find it hard to raise hog farm for the fact that Muslims don’t eat pork.

Furthermore, someone who can’t speak tagalog or English, just only his own dialect, would definitely find it hard to communicate to others. Knowing the lingua franca of people in a commercial place will give you one-step ahead from your competitors.

Religion sometimes affect the decision of a person to start a business for the fact that most of the religions have contradictory beliefs just like the Islam, Catholic, Iglesia ni Cristo, Ang Dating Daan, etc. For example, Ang Dating Daan forbids their female believers to wear pants (the writer of this essay has nothing against to this religion). However, if all of the people in the Philippines are part of this religious group, definitely no one would dare to sell girly pants or perhaps, someone in this business will have his doom.

Education and Experience

Filipinos value education very much, such that parents would rather keep their children in good school than see them distracted by business. Young people who enter business on their own are seen either as unfortunate ones who fell through the cracks, or as coming from families with no means to send them to tertiary schools. In other words, youth entrepreneurship is regarded more as a misfortune rather than a boon. You get into business when you are young, not because you opt to, but because you are forced by your circ**stances. Entrepreneurship among the young is perceived as the result of some insurmountable deficit in education.

On the other hand, Philippine Educational system is characterized colonial, corruptible and commercialized. It is colonial because the system serves the interest of those who introduced it. It is commercialized because almost all outstanding educational institutions are owned by private institutions and are very expensive. It is corruptible because it can end so easily by those who have interests. With the latter it trains students to be employees in the end not entrepreneurs. From elementary to high school and more so in college, educational institutions actually equipped students with skills that are needed or demanded by industries.

Access to Finance

Finance plays an important role in the economy. As banks, credit unions, and other financial institutions provide credit, they help expand the economy by directing funds from savers to borrowers. For example, a bank acquires large amounts of money from the deposits of individual savers. The bank does not let this money sit idle but instead provides loans to borrowers who might then build a house or expand a business. The savings of millions of people percolate through many financial institutions, spurring economic growth.
However, young people will not be able to have access to financial institutions unless they have a stable job and/or a definite source of income to pay the credits. Financial institutions also want to earn money, and the indecisiveness of the business of these young people will provoke them not to allow these youngsters to have loans or credits.

Contacts and Networks

For you to have your business successful you need the help of others who knows well about establishing a business or perhaps who have already established a business that is currently on its peak. Asking advises from these people will be a big help. They can warn you about the things that might happen if you do this and if you do that. They are also the one who will help you to publicize your business, and if you’re fortunate enough to your contacts and networks, they might lend you capital to start your own business.
However, since young people are just neophytes to business arts, and knows no one that is professionally close to them in terms of this matter, entrepreneurial spirit ends to nothing.
Regulations

So far, there is no problem regarding the rules and regulations when it comes to business enterprises because all businesses, whether small, big or multi-national that reside inside this country should be ran legally. This is so by acquiring business permits from city municipality and paying taxes to the government.

Young and Adult Entrepreneurs: How do they differ?

The great divide in Philippine society is between the rich and the poor, rather than between the young and the old. Age hardly plays a part, and so it may be surmised that there hardly are any constraints specific to the youth. Young and old have better shots to entrepreneurships when they came from well-off families; those who come from poor families at best have chances of participating in hand-me-down businesses being run by their forebears.

The Global Financial Crisis and its Dynamics

The financial crisis catalyzes the constraints aforementioned. After a long period of economic growth, high employment and high activity; it is indeed inevitable that recession and depression abruptly follows.

The Global Financial crisis has the following dynamics:

1. Unemployment level rises
As this situation continue to invade the society, poverty rate continue to increase because large number of people has no source of income to provide their basic needs and no personal income to start the business.

2. The number of bankruptcies is abruptly rising
Companies who are experiencing bankruptcy will enforced themselves to reduce the number of workers which then results to unemployment.

3. Inflation and Deflation follow
In economics, terms used to describe, respectively, a decline or an increase in the value of money, in relation to the goods and services it will buy.

The Action of the Government

The current drive of the Philippine government to enable the youth, especially the underprivileged, to develop skills should help boost the young’s chances to start on their own; even though it seems the scholarships being offered by TESDA (Technical Education and Skills Development) here in the Philippines is largely perceived as targeting employment, rather than a shot at entrepreneurship.


Study now, Pay Later
The government must offer scholarship programs to out-of-school youth. The scholarship must include free tuition miscellaneous fee, transportation allowance and book allowance provided that these out-of-school youth will take business related courses in universities and colleges.

Bank Loaning for Young Entrepreneurs
Competent and skilled entrepreneurs should be allowed by all banks to have their loans to start the business provided that these youngsters have been endorsed by the local government.
These youngsters will have their endorsement if they have met the qualifications and submitted the important requirements asked by the government.

Inter-Cultural Congress
Philippine archipelago has been blessed with rich cultural heritage. History says that Philippine had been visited and invaded by different nations in the past such as Chinese, Arabs, Malays, Spaniards, Americans, and Japanese which then result to different breed of blood and different mixtures of beliefs.
However, the Philippine itself has its own culture even before the foreign people came here. We have the Moros, Aetas, Tausug, and the Tagalogs. These ethnic groups only comprise one percent of all the cultural groups in the Philippines.

Inter-Cultural Congress will help the young people to build camaraderie among these different ethnic groups. This congress will also bridge misunderstanding among others. They will have the chance to inform everyone regarding their pre-existing cultures and how the cultural differences on the way, affect the economy.

The Final Words

Subconsciously, these three proposed programs have already encompassed all constraints to youth entrepreneurship.

As a young economist, I know that every one of us always think twice when we have though the uncertainty of our action. But, have you ever thought that this uncertainty could become an assurance if we are just going to think not twice but thrice about our actions?

Youth entrepreneurship has been believed to mitigate future cataclysms in the economy. Yet, big percentage of today’s youth is loosing their way.

Now, it’s everyone’s responsibility to secure the future. And to secure the future, adults must preserved and develop the youth’s potentials and sense of responsibility.

Abraham Lincoln, 16th president of the United States of America, once declared, "You cannot escape the responsibility of tomorrow by evading it today." The yoke of responsibility is not one that can be shrugged off, especially when it is a duty to successive generations to secure their future by insuring the present.
Perhaps the most difficult of all tasks is how Man, at the end of the day, can stand up to himself, and what he has done -- and still live with it.