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Youth

Fostering Entrepreneurship in Bangladesh: Overcoming Systemic Barriers to Youth Employment

Strategic Insights

— 2 min read

Ambitious young entrepreneurs in Bangladesh, like Imma Fahima, face significant institutional barriers to launching their businesses. Despite her efforts and determination, Imma's entrepreneurial dream faltered due to limited support from institutions and discouragement at home. This is emblematic of a broader issue confronting aspiring young entrepreneurs across the country, where inadequate training, lack of mentorship, weak access to finance, and insufficient market linkages hinder their progress. Experts warn that these structural barriers are fueling the country's persistent youth unemployment crisis, with the International Labour Organization (ILO) reporting that youth unemployment in Bangladesh is more than double the national average.

Key Takeaways:

  • In Bangladesh, youth unemployment is more than double the national average, with 2.66 million people unemployed in the third quarter of last year, an increase of 170,000 compared to the previous year.
  • According to the Bangladesh Bureau of Statistics (BBS), among the unemployed, 1.79 million were men and 870,000 women.
  • The unemployment rate for graduates and postgraduates has surged to around 11 per cent, far exceeding the national average of 4.2 per cent.
  • Small and medium enterprises (SMEs) contribute 28 per cent to the GDP and account for 85 per cent of industrial employment in Bangladesh, which is the lowest SME contribution in South Asia.
  • Economists argue that Bangladesh's SME sector holds significant untapped potential, particularly for youth empowerment, but requires more than rhetoric - it demands robust action.
  • Key interventions to unleash this potential include tailored training, simplified financing schemes, targeted mentorship programmes, and enhanced access to markets.
  • Integrating digital tools, reforming regulatory frameworks, and offering incentives, such as tax relief and exclusive product expos, are also seen as essential measures.
  • Assistance must be practical and aligned with the real challenges faced by new entrepreneurs.
  • Economist Muinul Islam notes that the contribution of the cottage, micro, small, and medium enterprise (CMSME) sector to the national economy remains limited, and that fiscal incentives, better market access, and more platforms to showcase SME products are needed.

Statistics:

  • 2.66 million people were unemployed in Bangladesh in the third quarter of last year, an increase of 170,000 compared to the previous year (BBS).
  • The unemployment rate for graduates and postgraduates in Bangladesh is around 11 per cent (BBS).
  • The national unemployment rate in Bangladesh is 4.2 per cent (BBS).
  • SMEs contribute 28 per cent to the GDP in Bangladesh (Source not explicitly mentioned in the original text, but a commonly cited statistic in the context of Bangladesh's economy).
  • SMEs account for 85 per cent of industrial employment in Bangladesh (Source not explicitly mentioned in the original text, but a commonly cited statistic in the context of Bangladesh's economy).
  • The contribution of SMEs to GDP in Pakistan is 40 per cent, in Sri Lanka is 52 per cent, in India is 37 per cent, and in China is 60 per cent (Source not explicitly mentioned in the original text, but a commonly cited statistic in the context of South Asia's economies).

Sources:

  • International Labour Organization (ILO)
  • Bangladesh Bureau of Statistics (BBS)
  • Imma Fahima, graduate of Jagannath University
  • Anwar Hossain Chowdhury, Managing Director of the SME Foundation
  • Mirza Nurul Ghani, President of the National Association of Small and Cottage Industries of Bangladesh (NASCIB)
  • Muinul Islam, economist

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