March 16, 2026
THIMPHU – Most youth-led businesses in Bhutan are small and short-lived, driven more by necessity than opportunity, despite growing interest among young Bhutanese, according to a new Asian Development Bank (ADB) report.
The report, Youth Entrepreneurship in Bhutan: Building Pathways to Job Creation, highlights that while entrepreneurial enthusiasm among the youth is on the rise, structural barriers continue to prevent these businesses from growing and surviving.
Youth employment rate in Bhutan is among the lowest in South Asia, while the share of young people not in employment, education, or training (NEET) has increased to nearly 20 percent in recent years.
These challenges are also prompting many young people to consider entrepreneurship as an alternative pathway to employment.
The report states that the number of potential entrepreneurs in Bhutan increased sevenfold between 2018 and 2022, reflecting rising entrepreneurial aspirations among youth.
Currently, there are over 3,600 entrepreneurs in the country, of whom more than 600 are youth. However, the majority of youth-led businesses are started out of necessity rather than opportunity.
Many young entrepreneurs enter business due to a lack of better employment options, often operating small ventures with limited prospects for growth. While individuals aged 25 to 34 account for a large share of potential and new entrepreneurs, they represent less than a quarter of established business owners.
One of the entrepreneurs said that many struggle to survive beyond a year after leaving the three-year start-up incubation programme. “Even IT entrepreneurs are migrating overseas, especially to Australia, because of the larger market opportunities,” he said.
Aside from limited access to finance, young entrepreneurs also face challenges such as lack of mentoring, weak professional networks, and limited business development support.
The report also states that many existing programmes focus mainly on helping individuals start businesses but offer little assistance in expanding or sustaining them.
In addition, cultural preferences for stable public sector employment continue to shape career aspirations among young Bhutanese, reducing the attractiveness of entrepreneurship as a long-term career path.
Despite these challenges, the report highlights that there is also strong potential for entrepreneurship to contribute to economic growth and create employment.
Entrepreneurs who start businesses to pursue market opportunities, rather than out of necessity, tend to earn significantly higher incomes and demonstrate greater productivity.
The study also highlights the strong potential of women entrepreneurs. Between 2018 and 2022, average monthly earnings for female opportunity entrepreneurs nearly doubled, reaching Nu 33,849 by 2022.
However, women entrepreneurs also face structural barriers, including limited access to finance, networks, and support services, which can affect the survival and growth of their businesses.
The report states that Bhutan risks missing an important opportunity if youth entrepreneurship is left without support.
“Most current initiatives focus on promoting start-ups rather than supporting business development across different stages of growth,” the report states. “Without targeted interventions, many youth-led businesses may remain trapped in low-productivity activities.”
To unlock the potential of youth entrepreneurship, the report recommends strengthening entrepreneurship education, expanding mentoring networks, improving access to finance, and supporting businesses beyond the start-up phase.
Improving coordination among government agencies and entrepreneurship support programmes is also identified as a priority.
Supporting young entrepreneurs in transitioning from necessity-driven to opportunity-driven businesses could benefit the economy, according to the report.
It states that such a shift could have contributed the equivalent of about 1.4 per cent of Bhutan’s gross domestic product annually between 2018 and 2022.