justify how social entrepreneur can help to overcome unemployment problem? ( long answer,2 pages)
Answers
Explanation:
The role of entrepreneurship in job creation and unemployment reduction is well established. With an unemployment rate exceeding 38% among Saudi youth, entrepreneurship could potentially play a vital role in creating self-employment for these young people. The current paper investigates the effect of entrepreneurial activities on the rate of unemployment, pointing out Saudi Arabia as a case study. To obtain this, the study aim to focus on youth unemployment as a problem has to be solved, and whether this can be done passing through entrepreneurship. A regression model is implied and estimated to test the study hypothesis, for data of 27 selected countries during 2008-2011. The results generally validate the literature findings. It displays evidence signifying that the relationship between unemployment and entrepreneurship is shielded with ambiguity. Empirical support for Schumpeter effect is found, but no evidence for refugee effect. To this aim, the youth unemployment problem would not be solved by entrepreneurship unless an active role of government and private sector to support entrepreneurial education. Youth self-employment policies must be embraced by the broader context of the country's economic policy.
1. Introduction
One of the most pressing challenges facing government and policy makers in the Kingdom of Saudi
Arabia is the unemployment problem, especially youth unemployment1. The underlying problem is that an increasing number of youth graduates from high schools, colleges and universities are seeking opportunities in the labour market every year. As the youth graduates cannot always depend on the public and private sector in providing job opportunities, entrepreneurship is tend to be the alternative solution for their unemployment (Bokhari et al, 2012). Starting their own enterprises, being self-employed2, and employing others are the substantial reasons of fostering entrepreneurship among youth.
1 Youth unemployment refers to the share of the labour force ages 15-24 without work and whom are seeking employment.
2 Parker (2004) defines self-employed as “individuals who earn no wage or salary but who derive their income by exercising their profession or business on their own account and at their own risk”. Likewise, he adds “partners of an
unincorporated business are usually classified as self-employed”
Entrepreneurship as a Solution to Youth Unemployment in the Kingdom of Saudi Arabia 121
Worldwide, there is an agreement on the importance of entrepreneurship for economic and
social development. All governments alert of entrepreneurship as economic power, and implement policies to promote it. It has come to be an important subject of many economists’ investigations.
Noticeably, entrepreneurship has long been considered a crucial mechanism of economic development and as the single most important player in the modern economy (Acs and Audretsch, 2005; Thurik et al, 2008; and Baumol et al 2011). Numerous benefits are associated in the society through entrepreneurship. It drives innovation, solves unemployment by creating new jobs, and satisfies new consumer demands (Bokhari et al, 2012).