In this paper we shed light on the relationship between entrepreneurship, job creation and youth unemployment prior to and in the aftermath of the global financial crisis. We seek to understand the differences in macroeconomic and, in particular, labor market dynamics in Europe and East Asia. While our focus is on Korea and Spain, we discuss the situation, where the use of macroeconomic policy is largely ineffective in reducing high levels of youth unemployment after 2007-with a most severe outcome for the member state in the European periphery. Based on our analysis, we recommend several policy measurements in order to strengthen entrepreneurial activity (as one of the main drivers for job creation) and, hence, reducing long-term youth unemployment. While policy makers should focus primarily on structural labor market reforms in the case of Spain (with respect to temporary job contracts and the minimum wage), the recent development of the Korean economy shows that investment in newly founded businesses should be supported by appropriate funding, as well as macroeconomic stability, where the latter can help companies to navigate through difficult times of economic turmoil and to create jobs.