Translating entrepreneurship into job creation in Tunisia

Entrepreneurship drives innovation, economic growth, competitiveness and improves quality of life. Studies have continuously shown that small and medium enterprises (SMEs) are the best vehicle to create jobs and drive economic growth.

In fact, one study has shown that SMEs are responsible for 65% of global GDP and employ 90% of the world’s workforce. On the other hand, a Kauffman Foundation study showed that on average between 1977 and 2005, existing companies in the US were actually job destroyers, losing 1 million jobs net combined per year. By contrast, in their first year, start‐up firms added an average of 3 million jobs. In the European Union, net employment rose between 2002 and 2010 by an average of 1.1 million jobs; 85% of this employment was thanks to the growth of SMEs.

For entrepreneurship to translate into job creation, Tunisia must create an environment in which entrepreneurs can succeed. According to a local survey conducted in 2011 by the Centre des Jeunes Entrepreneurs, 54% of 200 people polled between the ages of 20 and 30 indicated a desire to create their own start-ups.

However, these start-ups can only thrive in an ecosystem conducive to their needs. Developing the proper entrepreneurial ecosystem must engage a wide range of stakeholders, including private sector companies, government ministries, civil society, lawyers, financial institutions and academic institutions. The role of each actor must be assessed to determine his or her capacity to improve the entrepreneurial environment. Furthermore, these stakeholders must meet to discuss and debate how to increase the success rate of entrepreneurs in Tunisia.

The challenges are not unfamiliar: access to financing, inflexible lending policies, bureaucratic hurdles, high level of risk, inevitable time delays, lack of mentoring, access to talent and access to markets. In another survey by the Tunis Hub of the World Economic Forum’s Global Shapers community, these very issues were listed by respondents as reasons not to start their own businesses.

These challenges, however real, are not insurmountable. A variety of support structures already exist for entrepreneurs, including public funding, credit guarantees, public incubators and trainings targeted at entrepreneurs. Universities have degrees focused on entrepreneurship and there are many civil society actors who are promoting entrepreneurship. So why isn’t this translating into jobs?

What is required is a strategic approach, focusing on high growth sectors that involve as many stakeholders as possible to diagnose the problem of the existing entrepreneurial ecosystem and address them to absorb the hundreds of thousands of unemployed. One of the sectors that present a high potential for job creation is the renewable energy sector.