Introduction

In any economy, unemployment, especially youth unemployment, can be a curse. For long-term, sustainable success, the unemployment rate must be very low. However, in 2025, the unemployment rate in South Asia reached 15.4%. Although this rate has been declining over the last five years, the 15.4% is still alarming. For young men, the unemployment rate is expected to decline over the next 2 years. We have seen a declining rate in the early part of 2026. But it is more alarming when it comes to young women. It is expected that the women's unemployment rate will increase slightly in the coming years. However, compared to Arab States and North Africa, the unemployment rate is lower. It happens especially with the increasing involvement of women in job and entrepreneurship activities over the last one decade, especially for the era of modern technologies. Governments like Bangladesh, India, Nepal, and the Maldives are realizing the importance of youth entrepreneurship to the economy, so they are taking promising initiatives. However, still after comparing, it was found that only 14 percent of young women were working in 2023 compared to 39 percent of young men. The high NEET (Not in Education, Employment, and Training) rates for women in South Asia are due to a large number of women still not having the opportunity for schooling and employment. But we have observed positive changes in the last five years, especially in the evolution of digital marketing, social media, artificial intelligence, mobile banking, online education facilities, etc. Due to these, women are not only participating in entrepreneurial activities; they are also pursuing higher education. Soon, the NEET rate for women will decline compared to men (FRED, 2026). In this competitive world, it is very obvious that without entrepreneurial activities, young people cannot contribute to the economy solely by getting jobs. This new generation has realized it, and nowadays is more focused on entrepreneurship, although they are facing different challenges on their path to their dreams.

The aim of the entrepreneurship-related programs and activities is to standardize policies in order to engage youth in productive businesses. Entrepreneurship programs have significant positive impacts on self-employment, the country's economy, and personal financial independence. A holistic and comprehensive approach is required to promote youth entrepreneurship and self-employment. The estimated total global number of unemployed youths in 2023 is 65 million. The share of youth who are not in employment, education, or training (NEET) in 2023 was 20.4%. Young women are 2 times as likely as young men to be in NEET status (ILO, 2024). The majority of developing Asian countries struggle to recognize the importance of entrepreneurship. Among South Asian countries, India ranks 75th, Sri Lanka 82nd, Bangladesh 96th, Pakistan 97th, and Nepal 104^th in the global index of digital entrepreneurship systems. Among South Asian countries, India, Sri Lanka, Bangladesh, Pakistan, and Nepal, cultural and informal institutions are less favorable, whereas physical infrastructure is most favorable (ADB, 2024). The global youth unemployment rate was 13% in 2023, and the 20% share of youth not in NEET in 2023. World Bank, 2025. Entrepreneurs often face different types of challenges when entering entrepreneurial activities, such as financing problems, lack of family support, especially for women, social constraints, lack of skills and training, bureaucratic non-support, lack of skills for adapting to new technologies, lack of proper education, etc.

Entrepreneurship can offer financial independence for youth, economic contribution, lower unemployment rates, higher GDP, and higher living standards, while recognizing the reality that creating jobs for all unemployed youth is almost impossible in the South Asian region. Youth unemployment is indeed a global problem, but it can be particularly challenging in the developing countries of South Asia. But for a sustainable economy in the long run, utilizing all the youth is a must, and for that, entrepreneurship can play the most vital role. The government and the concerned parties must adopt holistic, effective strategies. This study has aimed to analyze all the challenges and future prospects of youth entrepreneurship in South Asian countries with the help of previous studies and has tried to provide a framework considering the evolution of modern technologies, which can help policymakers of South Asian countries to expand youth entrepreneurship by eliminating the challenges as much as possible (UNDP, 2018).

Study Methods

Inclusion and Exclusion

The population in this study consists of young people aged 15-24 years. Studies that focused on young people aged 25 and above and excluded adults were excluded from this study. Studies focusing on youth entrepreneurship challenges, such as financial, social, cultural, psychological, political, and opportunities relevant to youth empowerment, were included in the study. Studies that focused solely on literature reviews were not included. In this study, the South Asian context was considered, but the non-South Asian context was not considered. Peer-reviewed journal articles, including qualitative, quantitative, and mixed-method designs, theses, books, chapters, and international reports were included in this study.

Identifying the Research Question

This present study focuses on analyzing two research questions: 1) What are the challenges of entrepreneurship that youth entrepreneurs face? 2) What are the prospects of youth entrepreneurship in promoting youth empowerment in South Asian societies? These research questions were developed after a preliminary search of the existing literature on youth entrepreneurship.

Search Strategy

A systematic review of the literature was conducted using relevant keywords across both peer-reviewed and grey literature databases. Four databases were searched from inception to February 2026: PubMed (NCBI), Scopus (ELSEVIER), Google Scholar, and Semantic Scholar to identify literature.

Extent and Scope of Existing Literature

Based on in-depth database searches, a total of 120 studies were identified for this study. A screening process has been performed to eliminate duplicate literature using predefined inclusion and exclusion criteria focused on title & abstract. This screening process provides 50 studies for full-text review. Following a full-text assessment, 38 studies were identified: 25 quantitative, 9 qualitative, and 2 mixed-methods. 2 cross-sectional studies were found, but surprisingly, no longitudinal studies were identified, which limits our ability to assess the long-term impact of entrepreneurship. In analyzing the geographical distribution of the studies, the following were noted: 17 from Bangladesh, 4 from India, 3 from Pakistan, 3 from Nepal, 3 from Bhutan, 4 from Sri Lanka, 2 from the Maldives, and 2 from Afghanistan. This represents major socio-economic and cultural backgrounds in South Asia.

Discussions of the Findings: Challenges and Opportunities

The results of this study suggest that social business models can empower urban youth to become entrepreneurs by addressing social problems. Investment in social business yields economic outcomes and personal development, including steady income, a source of income, and economic independence (Ahammed et al., 2025). Another study also found a positive impact of the social business fund on entrepreneurs' income, increasing sales, profits, business assets, household property, and risk management capacity (Ferdousi et al., 2023). Several studies found that a lack of family or social support, loan arrangements, and training facilities hinder business activities (Sultana et al., 2025).

Studies on other Asian countries, such as Bangladesh, India, Pakistan, Bhutan, and Sri Lanka, found various multidimensional barriers in youth entrepreneurship, including financial constraint, failure concerns, practical knowledge deficiency, lack of infrastructure, socio-cultural factors, business support, lack of social engagement, lack of family support, lack of business opportunities, marketing problems, etc. (Pandey, 2019), (Shekhar, 2024), (Javeed et al., 2022), (Gankandage & Jayathilaka, 2025). There were many motivational factors responsible for becoming an entrepreneur among youth, including time-saving, customer feedback, trust in online platforms, lower costs, better networking facilities, and minimum initial investment (Pandey, 2019).

The result also revealed that young people want to be entrepreneurs, as they have positive attitudes towards entrepreneurship due to the scarcity of jobs (Ashrafi et al., 2020). It is suggested that a separate curriculum for entrepreneurship education in school and universities including practical lab activities, monitoring youth business start-ups, entrepreneurship education should be supported by industry, academia and public policy (Lakmal & Fernando, 2023). The study highlighted some challenges of entrepreneurship, including obtaining credit and financial growth, such as increase of interest rate, seeking for collateral before sanctioning loans, complex legal process, source of funding, pressure for repaying the loans, shortage of raw materials, poor skill of social marketing, lack of knowledge in digital technologies, availability of labor, and increasing competition (Ravi & Vedhapradha, 2019).

Lack of skills, lack of finance, unwillingness to take risks, lack of family support, lack of business opportunities, and lack of government support were also identified as challenges to youth entrepreneurship (Utha et al., 2016). In synthesizing these findings, enhancing Sri Lanka's entrepreneurial ecosystem requires a holistic approach. Along with coordinated initiatives from government, authorities, financial institutions, and community leaders, fulfilling educational needs, social support, psychological resilience, and financial accessibility are prime factors behind the higher rate of entrepreneurial success. Such a strategy can lead to long-term success in youth entrepreneurship in Sri Lanka (Gankandage, 2025).

Young people are central to achieving sustainable goals, so investing in youth motivates their long-term, continuous contributions to the economy at the personal, national, and global levels. Young people can contribute as agents in leading and implementing initiatives and as advocates in influencing the political and decision-making processes through their voices.

Sustainable Development Goal 8 is directly involved with youth employment issues. One of the main purposes of this goal is to ensure full and productive employment for all, including youth and persons with disabilities, thereby directly improving the country's economy. The ILO Youth Employment Action Plan 2020-2030 addresses several Sustainable Development Goals to promote the inclusive and sustainable development of young people, reducing the unemployment rate among young people, and providing fruitful education and training (NEETs). Besides SDG 8, the YEAP also supports SDG 4, which aims to provide young people with sufficient vocational and technical skills to increase youth employment and support the start of entrepreneurship activities. It also addresses SDG 5, which is designed to support greater women's involvement in employment by removing barriers and ensuring a gender-friendly environment. To ensure SDG 10, the YEAP aims to provide the required skills and training to vulnerable youth, migrants, refugees, and youth in rural areas. Creating green jobs and increasing investment in climate-friendly sectors can directly create opportunities for youth employment, and this is related to SDG 13: Climate Action, backed by The YEAP. The YEAP is also strengthening SDG 17: Partnerships for the Goals by coordinating the Global Initiative on Decent Jobs for Youth, involving the G20, BRICS, and regional institutions. Overall, the YEAP 2020–2030 is a very promising and fruitful strategy that can ensure sustainable employment and entrepreneurship opportunities for the young people (ILO, 2025).

One of the United Nations' important youth development strategies is to prioritize youth empowerment through job opportunities or entrepreneurship. This strategy can indeed ensure productive employment of young people to some extent. The United Nations would act as an advocate for creating balance to inspire labor demand and improve skills development systems for young people, enabling school-to-work transitions and reducing NEET rates, especially among young women and disadvantaged youth. Under this strategy, the UN is focused on creating self-employment ecosystems, creating quality jobs, attracting private investment to increase employment opportunities, reshaping labor market policies, continuous skills development that considers the latest technologies, and social protection in both rural and urban areas (UN, 2025).

This review has explored that youth entrepreneurship is shaped by social, economic, cultural, political, and psychological contexts across South Asia. It is found that the youth unemployment rate and the desire for a decent job remain key motivators for young people to become entrepreneurs in this region, as is common across South Asia. This review also identifies positive relationships between entrepreneurship education and entrepreneurship intention across various studies, where socio-cultural, economic, and psychological factors serve as barriers to the development of youth's entrepreneurship careers. The results suggest gaps in the empirical evidence on how youth entrepreneurs overcome these barriers and continue their journey. Existing studies predominantly emphasize quantitative assessments of financial, social, political, and educational aspects, often overlooking the critical aspects of youth's perceptions, attitudes, and coping capacities. Further studies often overlook the background of young people's choice of entrepreneurship as a career, their experience, and how these factors impact their sustainable livelihood and social status. Moreover, there is a scarcity of qualitative, longitudinal studies that provide extensive data and lessons for future entrepreneurs to help overcome the fear of failure. Future endeavors should focus on subjective indicators such as attitudes, perceptions, emotional experiences, values, cultural norms and practices, and religious practices relevant to entrepreneurship issues, to connect the multifaceted links between youth entrepreneurship and sustainable livelihoods. However, a notable gap exists in understanding entrepreneurship from the practical viewpoint of government and non-government financial institutions, especially concerning youth unemployment challenges. There is a lack of evidence on how financial institutional support affects entrepreneurship. In addition, the impact of entrepreneurship on youth empowerment and employment has been overlooked in existing research articles.

Further studies often overlook their gender, socio-economic status, ethnicity, geographical location, disability status, and how these variables influence entrepreneurship. As family dynamics have been changing rapidly over the last decade and migration has increased, more research will be vital to understanding how these challenges will evolve. Since it is the age of new technologies, and youths are adopting them more in their entrepreneurial activities, further studies are required to determine how these modern technologies are impacting youth entrepreneurship. Digital technologies such as artificial intelligence, advanced materials, cloud computing, and robotics could generate innovative ideas for the community's benefit. This review also identified a gap in the lack of focus on digital entrepreneurship platforms, which is crucial for the digital economy. Another important research gap identified in the scoping review is the lack of policy-based research. There are a few studies focused on the policy framework for youth entrepreneurship.

Based on the above discussion and analysis, this study has conducted the following SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of youth entrepreneurship, which might help policymakers in South Asian governments reshape their youth entrepreneurship strategies.

Strength

This study found some strengths in youth entrepreneurship. First, governments of different countries have taken significant initiatives to improve both digital and non-digital infrastructure. Second, the government. has realized that without a diversified economy, youth entrepreneurship cannot be expanded, so it has taken substantial steps toward economic diversification. Third, most countries have adopted digitalization across many government services, enabling the youth to start businesses with an easy, efficient registration process. Fourth, this study has found that many governments have initiated business development support systems for entrepreneurs who want to start small-scale businesses, especially women.

Fifth, in many of the countries in this study, women are increasingly engaging in higher education, which has made them realize the importance of financial independence. So women are taking steps outside their doors and starting to do business. Especially for the growth of modern technologies, women can easily start their business by opening a simple social media page. They can run their business from home. Both urban and rural women are participating in online business. Governments across countries have recognized the economic value of this online business, so they have launched various training programs for women to equip them with modern technologies, marketing, social media management, etc. Due to the expansion of the tourism industry in the Maldives, women in the Maldives are engaging in this industry. These women are not only contributing to their families but also driving significant change in the country's economy. Ultimately, youth entrepreneurship can make a notable contribution to the development of youth careers, which will benefit the country in the long run.

Weakness

This study found some limitations in youth entrepreneurship. First, it has been noticed that most young people who are willing to start an entrepreneurial business have lack of financial literacy, especially for the illiterate young people and youth from different study backgrounds other than business. Second, although different governments have started training programs for young people to enrich them with entrepreneurial and managerial knowledge, these programs are not sufficient. Both NGOs and private organizations with educational institutions need to come forward to expand the training programs. Third, countries like the Maldives, which are geographically dispersed and have a small local market, have limited financial instruments and a small credit market, making it difficult for young entrepreneurs to turn their initiatives into larger ones. Fourth, although it is an era of modern technologies, still a huge portion of rural people have lack of knowledge of modern technologies. They are not taking advantage of these technologies to start their businesses. Countries like Bangladesh, where both rural men and women have smartphones but don't know how to use their social media accounts to start an online business. Fifth, due to an inappropriate educational background and prior work experience, young people cannot participate in social investment-related decision-making. Sixth, different financial institutions don't want to give loans to young entrepreneurs, especially women, because of a lack of credit history and collateral. So, they were compelled to seek financing from informal sources, such as relatives and friends, or from personal savings (UNDP, 2025).

Seven, this study found that countries like Bangladesh, Sri Lanka, and Bhutan have insufficient national curricula that should be equipped with knowledge of entrepreneurial opportunities and education. Due to a lack of education and proper skills, many young people cannot realize their dreams, especially the underprivileged. Educational institutions are far behind in providing the required entrepreneurship education and skills aligned with modern technologies. Eight, due to different cultural barriers, social taboos, a low mentality in a male-dominated society, and religious constraints, women face obstacles at every step in their entrepreneurial dreams. Still, a large portion of families believe that doing business is not a woman's duty; rather, they should focus only on family duties. Nine, compared to urban youth entrepreneurs, it is more difficult for rural young entrepreneurs to accelerate their initiatives due to insufficient educational opportunities, obstacles in accessing new information, difficulties in building proper networks, etc. There is a lack of a proper government platform for entrepreneurship support.

Ten, countries like Bangladesh, Pakistan, and India have complex, old bureaucratic processes for business launch, which make it more difficult and lengthy for young entrepreneurs to realize their dreams. Eleven, in countries like Bangladesh and India, which have a good number of financial institutions, but they are hardly willing to support SMEs. These financial institutions still cannot believe that these visionary youth can bring them long-term profit. In different countries, minority people also face discrimination when seeking loans from financial institutions, receiving administrative support for opening their businesses, and receiving local government support, which ultimately hinders social and economic development in the community and the achievement of goals (UNDP, 2021).

Opportunities

As in many other sectors, the widespread adoption of modern technologies can enable significant development of youth entrepreneurship. This is a great opportunity, especially for a country like Bangladesh, which is on track to become a developing nation by 2029. Their economy can be supported largely by the vast contributions of youth entrepreneurship. The government must understand the vast potential of digital technologies to expand large-scale youth entrepreneurship. In a country like Bangladesh, where young people have started their entrepreneurial activities by opening a social media account over the last 4-5 years. Gradually, women from both urban and rural areas are engaging in digital marketing, sales, and promotion. However, there is ample opportunity to utilize social media, artificial intelligence, and mobile banking facilities to engage more unemployed youth in entrepreneurial activities. By doing so, they will not only improve the lives of their own, but they will also contribute to the economy. The government has to organize various training programs and courses to help more people learn how to use these technologies properly and realize their dreams.

Again, taking the best advantage of the strategic geographic locations of different countries can be a great opportunity. In this Asian region, the Maldives holds the position as the largest and fastest-growing travel and tourism market. Tourists from different countries can easily book hotels and travel destinations on their smartphones. Traveling to different countries is now a piece of cake. So, the government of the Maldives can expand its tourism industry by involving unemployed youth through entrepreneurial opportunities. Apart from these, developing green factories, political involvement to support private-sector enrichment, and bringing international projects and support can scale up youth entrepreneurship (UNDP, 2025).

Threats

This study has analyzed various existing and potential threats that can hinder the success of youth entrepreneurship. First, social taboos, religious beliefs, and old traditions and cultural norms create obstacles, especially for young women, to starting their entrepreneurial activities. A huge number of people in countries of this region still believe that women are supposed to be caregivers to their families. They should stay inside the home and take care of their families. These perceptions are creating obstacles for women on their journey to youth entrepreneurship. Second, political involvement and corruption are very common phenomena in these countries. Different goons backed by political leaders often create problems for the small entrepreneurs. Again, corruption across different government organizations is another threat to young entrepreneurs. Third, different financial institutions are not willing to provide business loans to individuals without collateral. Fourth, small entrepreneurs face significant competition from large enterprises. Without offering a unique product or service, it is difficult for entrepreneurs to sustain their businesses in the long run. Fifth, countries of this region often face volatile political conditions. Unstable political conditions can never support small entrepreneurs in the long run.

Sixth, the improper national curriculum backed by entrepreneurial courses, the lack of training programs, and minimal expansion of digital infrastructure in rural areas are among the other threats that must be addressed by the government. On the other hand, the development of youth entrepreneurship can create obstacles for other established industries in some countries. In Bangladesh, 80% of its foreign currency is backed by the RMG industry. If more and more rural women and youth with less education become increasingly involved in entrepreneurship activities, then this RMG industry may not find enough workers. The RMG industry in Bangladesh is succeeding only because of the low wages paid to workers. Now, if these people can find another opportunity that lets them earn better, they may shift. However, the policymakers must keep a balance so that both RMG and entrepreneurship can benefit the economy in the long run (UNDP, 2025), (UN, 2024).

Conclusion and Recommendations

The study provides a holistic overview of the challenges and prospects of youth entrepreneurship in the South Asian context. It highlighted various challenges, including economic, social, cultural, and political challenges, as well as entrepreneurship education and intentions. This study has been equipped with an extensive review of existing literature, analyzing multiple types of studies, including both quantitative and qualitative studies. This approach enabled a comprehensive assessment of the current state of entrepreneurship challenges and their effects on young entrepreneurs across South Asian contexts. This review study has explored a critical gap in the existing literature regarding challenges and policy dimensions. Despite the crucial importance of youth employment education and training for youth empowerment in South Asia, there is a scarcity of comprehensive studies examining its multifaceted aspects. To get the best benefit from youth entrepreneurship, proper use of modern technologies is a must. However, focusing more on Bangladesh and Indian studies, which limit in-depth findings across the region, underscores the need for further research in countries such as Pakistan, Nepal, Bhutan, and Afghanistan. In addition, overreliance on quantitative studies limits understanding of youth perceptions, knowledge, and attitudes, underscoring the importance of qualitative studies. These limitations create the landscape for more use of comprehensive regional and methodical approaches in future research and policy recommendations.

Appendices

Below is the summary of the 38 literatures that have been used for this study with the below points,

1. Literature Title,

2. Authors Name,

3. Study Design,

4. Study Setting,

5. Study Objectives, and

6. Key Results