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Why not pay the unemployed to create startups?

Why not pay the unemployed to create startups?

Or how you might create the really big society. Yes, it will probably create some serious chaos. But who said being disruptive should be tidy?

The big startup society. A hastily conceived but earnest answer to a question that almost everybody is asking.

Candidates for the scheme would have to be unemployed. Participants would become eligible for increased welfare payments.

They would have to enrol on an accredited startup course, then take an exam. The results would determine whether they could participate in the startup scheme. They could take further courses and exams in order to attempt to qualify.

Once qualified, they would need to create a partnership with at least one other unemployed person. Online resources to facilitate this would be provided. The scheme would exclude solitary startups. Partners would need to submit a partnership agreement.

The partnership would have to create an idea for a product or a service which would be submitted for approval. Criteria for approval would include originality.

The partnership would have to create a business plan and a marketing plan. They would also have to create a presentation and a website. These would all have to be submitted for approval.

Approved applicants would be expected to pitch their idea to approved prospective investors. Prospective investors would be paid a fee by the scheme operators for each pitch session that they host.

Investors in startups in this scheme would be eligible for tax incentives. Once investment was received, the recipient startup partners would become ineligible for unemployment payments.

Yes, I could see this all going terribly wrong and wasting lots of taxpayer’s money. But the alternative would be to carry on paying people for not creating startups, something we should perhaps only offer after the startup option has been given the consideration it deserves.

8 Responses to “Why not pay the unemployed to create startups?”

  1. Grzegorz Pietruczuk says:

    Possible? In theory, maybe so.
    In reality? Most probably not.

    Activisation of unemployed is really important, and many schemes back it up. But isn’t this vision of article’s author a bit too optimistic? Wouldn’t the possible costs be too high? How about choosing the applicants? Needs a lot of polishing, with many problems looming over the project.

    Would love to be positive about it, always up for giving people their chance. Can’t seem to find enough will in myself to believe in this to become real. Although, trying it in some small scale, a minor city or something to fully test it can answer some of the doubts I have.

    • Rob Jara says:

      I too love the optimism coming from the author, but as you pointed out, such a scheme has too many holes in it, starting with choosing the candidates for it. I mean, being stringent in every process is important, especially in business, and if you apply it in this particular scenario, I doubt that many quite qualify, much less last in a cut-throat environment.

      • Grzegorz Pietruczuk says:

        True. And I doubt that many can qualify – such scheme will be costly so the organisers can’t allow many to take part; conditions will be very demanding and hard to fulfil for potential unemployed.

  2. Rob Jara says:

    While researching on this topic, I came across two contrasting articles, which I will now share here:

    http://www.suite101.com/content/a-new-business-startup-is-the-best-unemployment-remedy-a294310

    This article hails that business start up is the answer to unemployment, while

    http://www.mikecritelli.com/2010/04/08/startup-businesses-solve-unemployment-problem/

    tells us that business start up is not the solution to unemployment. To cite the first article,

    “During economic downturns, even highly skilled workers might face unemployment. Starting a business of their own is probably the best option before them. They can look at their own strengths and experience, and look for others with complementary strengths to join them. Most importantly, they can do some serious research on how to start a business. These efforts are likely to prove substantially more satisfying and effective than trying to find another job.”

    Here’s an excerpt from the second one:

    “Everyone is capable of adapting to some degree to enable them to work in start-ups, but for older employees who have been used to operating in a particular environment for several decades, it is like getting a divorce and being asked to date people in an environment that is not only completely different from the one in which they functioned during their marriage, but also completely different from when they were last single.”

    As for my personal view on the subject, the two approaches have their merit, but I would have to agree somehow that start ups are not an ultimately viable solution for unemployment. Governments need to ensure workers can put their skills in more secured environment, so that they can be more focused and not at all worrying about their status like how businessmen do whenever business is not on a quite favorable condition.

    • Grzegorz Pietruczuk says:

      This is true, it does have its pros and cons Rob. Surely, we can find examples of unemployed doing great and actually creating a successful startup. Like this guy:

      http://www.huffingtonpost.com/2010/09/07/unemployed-yale-graduate-_n_707290.html

      On the other hand, there are tons of examples people missing something to make it right and do well with their idea for a startup. It’s a bigger problem, not as easy as writing few points in an article. Well thought through, with a good plan, surely worth trying.

      • Rob Jara says:

        Yes Greg, it could work for some, but taking in to account the bigger picture, not quite the solution for unemployment. 

    • Rob Jara says:

      Let me make it clearer when I said that workers need to have their skills in a more secured environment (not that anyone’s asking, yet). What I mean is that with the unemployment problem being a critical one and one that affects societies in a socio-political and economic fashion, workers need to be assured stability of their jobs, income, and benefits. Now I may be coming from a quite different perspective, but I just don’t believe that startups, while a brilliant stroke in a business perspective, is the best remedy for unemployment. My answer? Governments need to ensure that laws are enacted to protect workers welfare and ensure that jobs are being generated on a regular fashion to solve unemployment. 

  3. Jimmy says:

    I only have one comment. In the context of one of my favorite characters, Mr Spock from the original 1960′s TV series Star Trek…Fascinating!

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