US youth entrepreneurship on the slide
- 15 December 2011
- From the section Business
Many of us turn to chocolate in times of trouble. But Eric Heinbockel isn't stuffing his face with it, he's making it.
Mr Heinbockel holds a business degree from one of the finest universities in the US. Instead of toiling in a bank or sitting in a plush boardroom, he's the co-founder of his own chocolate company.
Chocolate wasn't his first choice of career, but it turned out delicious nonetheless. With the economy stalling, more and more recent graduates are turning to entrepreneurship to make ends meet.
Mr Heinbockel and two friends, Fabian Kaempfer and Nick LaCava, decided to start a business. They came up with Chocomize.
The concept is simple: people build their own chocolate bars using a combination of ingredients and toppings, like gummy bears, rose petals or, for the more adventurous, bacon bits.
Growth has been rapid. Since starting the business in late 2009, they have sold over $1m (£646,000) worth of chocolate and they've outgrown their former offices in Cherry Hill, New Jersey. They recently moved to a 5,000 sq ft location in Queens, New York, where they now employ eight to nine people.
"When we set out, really we weren't looking to create jobs for others," Mr Heinbockel says. "We were looking at the very least to create jobs for ourselves."
Given their own experiences searching for work, his partner Mr Kaempfer says being a job creator "feels really great".
Jobs for the young are virtually non-existent in the US right now.
Last year, the jobless rate among 16 to 24 year olds was 18.8%, the highest rate since comparable records began in 1985, according to the US Bureau of Labor Statistics.
Large numbers of high school and college students typically search for summer jobs between April and July. That's also when many graduates enter the labour market to look for permanent employment.
Figures show that during these months in 2011, the number of 16 to 24 year olds who were unemployed rose to 745,000, an extra 174,000 compared with the same period last year.
"Youth unemployment in America right now and around the world has reached crisis levels," says Scott Gerber, the founder of the Young Entrepreneur Council.
"We frankly have never seen the sorts of epidemic proportions that are in this American economy of ours right now."
With no jobs for the young, his organisation is promoting youth entrepreneurship.
"Entrepreneurship is not an easy path but it is a viable path, but then in today's economy I think there are no easy answers," Mr Gerber says.
The lack of available finance and support is dissuading many young people from striking out on their own.
Youth entrepreneurship in the US is at an all-time low, according to the think tank Global Entrepreneurship Monitor, which looked at entrepreneurial activity over the last 10 years.
This decline is a great cause for concern. Without young people taking the risk and striking out on their own, many wonder where the entrepreneurs of the future will come from.
The Obama administration is engaged in discussions with groups like the Young Entrepreneur Council about how to support the next generation of business owners.
For many who do decide to go it alone, the best help often comes from family and friends.
After university, Susie Levitt and Katie Shea didn't bother looking for a job.
Using $10,000 of combined savings, they set up City Slips, which sells portable shoes that fold up and fit easily into a woman's purse. Their customers include department store Neiman Marcus and New York beauty shop Ricky's.
The pair started the company after entering a business plan competition during their senior year at New York University (NYU). Nine months later, their first batch of a thousand City Slips arrived at their spacious Long Island distribution centre - otherwise known as Shea's parents' garage.
Ms Levitt says none of it would have been possible without all the support they got.
"We had friends helping us with websites, professors at NYU helping us file for incorporation, our patent pending, so we had a lot of help from the get go," she says.
"That was really given to us mainly because we were on campus at school and really able to tap into their resources."
Today they operate out of an office in New York's fashion district where they have one room to store their products, and where they share a showroom with other businesses in the building.
But it hasn't all been plain sailing. Inventory management was one of their first lessons.
Starting out, they placed an order for shoes that matched the size they wear, small to medium. They quickly realised that wasn't representative of their market.
So looking back, do they have any regrets?
"Maybe it was a bit of luck or naivety," says Ms Shea.
"But our passion was entrepreneurship and small business so that's where we wanted to start."