Where are all the millennial entrepreneurs?
While millennials may have the most entrepreneurial mindset of all generations, and certainly believe themselves to be entrepreneurial, it’s a belief that isn’t backed by statistics.
According to the Atlantic, the average age for someone behind a successful start-up is about 40 years, with those between 55 and 65 as the only age group with increased entrepreneurship in the last two decades.
Furthermore, the number of business owners under 30 has dropped by 65 percent since the 1980s and is at a quarter-century low, the article stated.
“Millennials are on track to be the least entrepreneurial generation in recent history,” John Lettieri, the co-founder of the Economic Innovation Group, told the U.S. Senate, according to The Atlantic.
So why so few enterprising millennials?
One possible reason several sources note is that student debt is keeping younger entrepreneurs from acting on their ventures. A national poll from advocacy organization Small Business Majority found that half of the millennials who were paying loans and either owned a business or had plans to, said that student loans were a “barrier to entrepreneurship.”
The same survey found 51 percent, if they do not already own a business, either have plans to or simply want to.
Responding to those views, presumptive Democratic presidential nominee Hillary Clinton proposes deferring federal student loan payments for up to three years during which no interest would accrue, MarketWatch reported.
In addition, Clinton’s plan allows for those who start a business in “distressed communities” to be eligible for up to $17,500 of student loan forgiveness after five years.
But Small Business Trends argues against the debt factor, stating that the rise in student loan debt in 2004 doesn’t coincide with the decline in entrepreneurship, which has been falling since 1989.
Instead, Small Business Trends points to a change of attitude. Today’s young people are less interested in being entrepreneurs than their parents were at their age and instead pursue other life goals, the article stated, with the timing of the attitude shift syncing better with the decline of entrepreneurship.
Regardless of the cause, the lack of entrepreneurship among millennials can have a broad, longterm economic impact. The Atlantic noted that older firms employing up to 80 percent of the workforce dominate the business landscape, which can lead to a less efficient economy.
“There is, however, cause for optimism,” the article concluded. “First … start-up ideas germinate in office daydreams before blossoming into something worth pursuing outside the comforts of the company. Second, the slow recovery has stalled some would-be entrepreneurs, but 2015 was one of the strongest years this century for job and wage growth … Third, the next generation may be better prepared to start a company. … The number of entrepreneurship classes on college campuses has increased by a factor of 20 since 1985, so it’s possible that there are thousands of future startup founders who are currently employees sifting through ideas for their own firm.”
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