Can incubators and accelerators help tackle youth unemployment?
I have spent many years collaborating with incubators and accelerators. It has given me the time to understand deeply the benefits of the model they use — but also the problems they face regularly.
This article discusses how the model of incubators and accelerators could be applied to a different set of players, to solve a different problem: unemployment among the young. Since moving back to Italy, I have seen how relevant the problem of unemployment is to young people: today it stands, shockingly, at over 40 percent.
Above all, I believe education, collaboration and exposure are the main benefits of incubator and accelerator programmes. The right methodology is crucial to achieving a solid execution, and finding the time in a young team to dedicate to getting this right is very important.
But the negative side to incubator programmers are the expectations around funding and growth: we tend to believe that such an experience will automatically change your life, but often it does not. Failure rates are still very high and the proliferation of incubators and accelerators have made them pretty much a standard pathway, as an MBA might be to progress a corporate career, but not longer are they an achievement in themselves which guarantees success. Finally, startup founders often end up working in lonely ‘garages’, focused on product development rather than being constantly exposed to professionals with different backgrounds, arguing and defending their solution.
Politicians often discuss measures to boost the economy and create new jobs. I am one of those professionals who deeply feels the transformative nature of the economic changes we are living through; and I also feel that unless we innovate and project traditional companies into the future, we will never make the difference and solve this problem.
So, how can we boost corporate innovation, while leveraging public funding and utilising the skills and energy of the young unemployed?
I propose using the incubation model to help groups of young people around technological innovation. In this way, they can nourish the self-generation of innovative solutions which would be absorbed into companies, helped by public funding and fiscal benefits.
The result of the model would be an innovation ecosystem based on a very simple idea:
"The future of recruitment is not individual skills, but team projects."
I was recently inspired by an initiative at the IULM Innovation Lab. They created an incubator/accelerator for students of the university with the goal of educating and preparing students for an alternative route to the classic job hunt: working on a startup project. The education programme is free and focuses on subjects such as lean methodology, prototyping, business modelling, design, and validation, while the acceleration is subject to selection.
In ways like this, I believe the government should be working to open up a number of similar programmes around the country, with a localisation strategy to facilitate attendance, and offer a schedule as follows:
Step 1: Formation/Education
Every young individual who is unemployed can apply to participate in modules delivered physically and also via Facebook. Subjects will be the classic startup principles: lean methodology, prototyping, business modelling, design, validation, and more.
Step 2: Team and ideas formation
The educational phase is followed by an idea generation phase during which the participants will need to decide on a solution/project and form a team to execute it. Teams will need to have the necessary skills to autonomously execute the solution at this early stage. Those teams and ideas will be screened and ultimately selected to enter the acceleration phase.
Step 3: Projects acceleration
The acceleration phase is based on the classic incubation/acceleration programme during which teams and ideas are exposed to mentors and advisors, challenged and helped to build a solid value proposition for their solution based on a sustainable business model.
Step 4: Corporate absorption
This is the phase in which I believe we could really implement innovation and change, again based on the simple principle that ‘the future of recruitment is not individual skills but team projects.’
The classic post-acceleration route is a pitch to investors to raise funds, and to find corporate clients ready to buy the solution. I believe that we could look at this post-acceleration phase with a mix of HR and corporate innovation goals, and see teams not as startups that grow independently, but as projects designed to be absorbed into traditional companies.
On one side, the projects become open innovation initiatives based on a social mission to help young people design their perfect job; on the other side they help corporates navigate a disruptive shift into a futuristic ‘experience economy.’
I also envision a public incentivised policy to support this model. Considering that in our case applicants will be unemployed young people, a basic income could be guaranteed by the government for individuals entering the acceleration phase to give them the piece of mind to constructively work at their solution.
Further, I believe that an incentive for corporate absorption would be of mutual benefit: instead of the government releasing public funds in an unstructured way (such as the Industry 4.0 Italian plan), it should be incentivising specific projects and granting fiscal benefits to corporates which actively absorb innovation.
Obviously this is a very top-level strategy for such a complex and multi-faceted problem. But with such a deep and urgent need, I feel strongly that stimulating the conversation, and adding to the design thinking process, is crucial for all of us.
If we engage, we can help young people to expand their potential within the new digital economy, instead of being left behind by it.