Young Entrepreneurs: Will They Fix Mexico's Economy?

The Mexican economy faces numerous challenges, including a large informal sector, the global decline of oil prices and other socioeconomic factors. Amid these challenges, Mexico's economy has close ties to the international and U.S. economies.

What's more, in 2015, only 27% of Mexico's adult population reported having a good job, which Gallup defines as 30 or more hours of work per week for an employer who provides a regular paycheck.

One way that the country can confront those challenges is by promoting entrepreneurship, which would help boost its employment opportunities and economy. Mexico City -- one of the most densely populated regions in Mexico, with a population of over 21 million people in the metropolitan area -- is doing just this, and it's looking to the next generation of entrepreneurs for help.

The Mexico City government is assessing the entrepreneurial talents of many of its public high school students between the ages of 14 and 18, particularly focusing on students who have expressed interest in starting a business. The government is working to strengthen the future of its economy and provide more employment opportunities by identifying students who have an interest in developing their entrepreneurial talents.

In 2014, the city's government, in partnership with the Fund for Social Development (Fondeso) of Mexico City, set out to identify future business leaders using an assessment that measures users' entrepreneurial talents.

The Jovenes Emprendedores en la Ciudad, or Young Entrepreneurs in the City program, assessed the entrepreneurial potential of 10,000 public high school students in 2014. In 2015, they assessed 15,000 public high school students and set a goal of assessing 30,000 high school and college students in 2016.

There are 10 different high school systems in Mexico City that serve 600,000 students through a total of 500 high schools. Many of the high schools are vocational, with specializations such as nursing, government positions or entrepreneurial studies.

"To carry out the assessment we decided to use Gallup's test, BP10 [Builder Profile 10]," said Salomon Chertorivski Woldenberg, secretary of economic development in Mexico City. "This is a very comprehensive tool, since, unlike others that only take into account academic aspects, this one considers other issues such as confidence, independence, risk-taking and focus on business."

Challenges Facing Mexico's Economy

Mexico needs to use all available resources, as the country's economic problems are daunting.

"First of all, we have to start by acknowledging and fighting the systemic factors that are affecting its growth, among which, lack of regulation and unequal income distribution are highlighted," Chertorivski said. "It's indispensable to start giving more support to Mexican human resources and talent. There are many young people in our country who have innovative ideas, and business ideas with potential to create new jobs and be very valuable. As part of the government, we must support the creation of high impact entrepreneurship."

Victor Hugo Lopez, director of Fondeso -- the government entity described as similar to the U.S. Small Business Association -- has noticed a generational shift in attitudes toward entrepreneurialism in Mexico City's young people.

"The generation of millennials [has] changed," Lopez said, and he expressed surprise that there were a large number of high school students interested in the program who were highly talented in entrepreneurship.

In fact, many students are already involved in their families' small businesses while attending high school and college, Lopez said, adding that this results in a large proportion of students scoring high in entrepreneurial talent on the BP10 assessment. While not all who score at the top in talent will go on to build their own businesses, it's important to note that the program offers students options and allows them to think differently about their futures, he said.

Early Identification of Entrepreneurial Talents

The COLBACH High School System is one of the largest providers of public secondary education in Mexico City, serving 120,000 students, or 20% of the total student population, according to General Manager Dr. Sylvia Ortega. Ortega said she finds value in identifying high entrepreneurial talents early on.

"The fascinating thing is that identifying entrepreneurial talent will not only allow them to engage in more quality businesses … with high potential growth, but it will allow them to attend the university that they select and further develop their ambition," Ortega said. "That is very important in a city that has very few opportunities for young people of these socioeconomic statuses and have a very limited sense of opportunities to exclusively pursue higher education."

Ortega said she has noticed a generational shift as well, pointing out that young people in Mexico City are a "very pragmatic generation," and seem to be aware that careers in industry or factories with retirement options are no longer available. In the past, students weren't as concerned about retirement because they had more opportunities, she said. Now, students are "more open to think about their future in connection with their well-being." Ortega noted that this age group also faces obstacles like increased drug addiction, unplanned pregnancies and violence.

Parent involvement is key to the sustainability of the program, both to ensure students are able to attend the workshops and to show parents that the school cares about students' educational success and futures, Ortega said.

Dr. Jorge Castillo, director of entrepreneurial studies at CONALEP (National College of Technical Professional Education), a vocational training institute in Mexico City, is motivated by the positive results of the applicants.

"Most of our students come from disadvantaged social and economic context," Castillo said. "They come from poor families that have low incomes [with] a lot of social problems. It's very important for us to give them the opportunity -- or increase their opportunities -- to have a job [while they're young]."

Students in Mexico City don't see great value in themselves, Castillo said. The self-confidence and motivation to be gained from taking the BP10 assessment are of great value for the students.

"I think the BP10 tool is a very interesting tool for young people because they can appreciate their talents, their opportunities," he said. "They can understand also that it is not necessarily important having the money for starting an entrepreneurial project, but having ideas and the personal skills."

Developing Entrepreneurial Talents

Once students with high entrepreneurial talent are identified, it's just as crucial to develop their talents through mentorship and financing.

Students are trained through workshops divided into three stages: 1) examining self-esteem and self-knowledge -- the fundamental tools for those who want to start a business; 2) training on technical aspects of building a business, such as administration, costs and marketing; and 3) creating a final business plan. Students who successfully complete the planning of their projects are then directed to financial institutions for funding, with financial conditions set according to their ages.

Those who show very high levels of entrepreneurial talent are recognized within their school systems to inspire other students and parents.

"Investing in identifying and training young entrepreneurs is investing in a good future for everybody," Chertorivski said. "What is required is to drive all these advantages and make them available to those who want to make the most of them so that we can become an example of entrepreneurship, not only in the country, but worldwide."