Texas is no stranger to poverty. We have the 8th worst poverty rate in the nation, and a third of our children are impoverished. Right here in San Antonio almost 20% of San Antonio residents and nearly one-sixth of families live in poverty. While the city has set an admirable goal of cutting the number of impoverished families in half by 2020, accomplishing this herculean task will be no easy feat. However, educating young children and teens about entrepreneurship and the business world can play a crucial role in helping the next generation break out of the vicious cycle of poverty.
Programs that educate children on running businesses and recognizing opportunities provide a wide-array of both economic and social benefits that help combat systemic poverty. Importantly, it teaches youth in poverty how to run and start a business, which can be a useful way to alleviate poverty. Small-business ownership can improve standards of living for owners by providing owners with a source of disposable income. This allows some individuals to pull themselves out of poverty.
For the economic benefits to spread to the broader community, however, entrepreneurship programs must teach people how to grow their business. Teaching someone to start a business won’t effect the community around them if they’re focused on surviving rather than expanding. Small businesses that grow are able to hire more employees and pay them more, which provides other individuals in the community with jobs and disposable income.
If entrepreneurs are able to develop a diverse network of small-businesses, they can bring middle class consumers back into the community. This has worked for Chinese and Korean immigrant communities in Los Angeles, where entrepreneurial development has created new consumer demand and enhanced the development of local social structures by making these communities attractive to middle class individuals.
Once developed, communities of entrepreneurs can be self-perpetuating. Successful entrepreneurs serve as role models for the community, and studies have found that students with these role models were more interested in becoming entrepreneurs themselves. , By providing a forum for communication, entrepreneurship education programs, like VentureLab, can connect young teens interested in business ownership to already successful business owners, inspiring those students to become future entrepreneurs.
There is still value to entrepreneurship programs even if students do not go on to be business owners, however. As we mentioned in a previous post, entrepreneurship education programs can boost self-esteem, self-control, and increase innovative thinking, but they can also help significantly improve academic performance for students. This is an important aspect of entrepreneurship programs that should not be discounted. Education is an essential element of poverty alleviation, and even if students do not go on to start a business, programs that teach children and teens about entrepreneurship provide them with broader educational skills, which can help them escape poverty.
Entrepreneurship programs, however, should not be construed as a magic bullet for poverty alleviation. It is extremely difficult to climb out of poverty, and acquiring the capital to start a business is an arduous process for anyone, much less individuals struggling to make ends meet.
In light of that, entrepreneurship education programs should be understood as tools in a larger toolbox to fight poverty. They attempt to remedy long-term cycles of poverty by providing individuals with the ability to recognize emerging business opportunities to make themselves more attractive to employers. Tackling systemic poverty in San Antonio and Texas will require a wide-array of policy and business initiatives, but teaching people how to help themselves is an essential element of any anti-poverty plan.
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[1] “Texas Has Highest Uninsured Rate, High Poverty.” CBSDFW.com/AP. September 17, 2013. http://dfw.cbslocal.com/2013/09/17/texas-has-highest-uninsured-rate-high-poverty/
[1] SA2020 Indicator Report. June 4, 2013. http://www.sa2020.org/wp-content/uploads/2013/06/SA2020-Indicator-Report_FINAL.pdf
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[1] Muofhe, Nnditsheni J. and du Toit, Willem F. “Entrepreneurial Education’s and Entrepreneurial Role Models’ Influence on Career Choice.” SA Journal of Human Resource Management. Vol 9, No. 1. 2011, p. 256-257.
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[1] Rasheed, Howard S. “Developing Entrepreneurial Characteristics in Youth: The Effects of Education and Enterprise Experience.” Submitted to the International Journal of Entrepreneurship Education. Accessed Nov 24, 2013.
[1] Rasheed, Howard S. and Howard-Vital, Michelle. “Entrepreneurship Education: A Cautious Ray of Hope in Instructional Reform for Disadvantaged Youth.” Developmental Entrepreneurship: Adversity, Risk, and Isolation. International Research in Business Disciplines, Vol 5. 405-423.
