PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

The Low Rate of Millennial Entrepreneurship is a Big Challenge for Our Economy

By at 5 December, 2017, 8:30 pm

Small Business Insider

By Katie Kerrigan-

The dream of starting a business and being an entrepreneur is a consistent and positive trend among millennials. Many people under the age of 30 years have the desire to form their own start-up, but most are not putting their money, or their effort, where their mouth is. Bentley University conducted a recent survey among millennials and found that well over half of respondents would love to start their own company. However, the reality is that only 3.6 percent of all businesses in America are owned by an entrepreneur under 30 years of age. That compares to 10.6 percent in 1989, and 6.1 percent in 2010.

The predicament many millennials encounter is the risk involved with starting a business, specifically the opportunity cost of startup outweighing the potential reward.  Increased student debt from rising college tuition, the lack of access to capital, and what they believe is a scarcity of mentors or resources to help them navigate the entrepreneurial landscape are just a few reasons why millennials are adverse to opening a business.

The decreasing rate of millennials willing to become entrepreneurs is a serious problem for the U.S. economy and addressing this issue must be a priority. Small businesses are the backbone of our county’s economy.  Without them, large corporations would dominate, leading to an uncompetitive marketplace. Entrepreneurs are critical for economic growth, new job creation and innovation.

Continuous innovation is America’s competitive advantage and has separated us from the rest of the world. U.S. innovation is a dominant force in the global marketplace, but other nations are catching up. The dearth of entrepreneurs under the age of 30 has many experts concerned that the United States is losing its competitive edge.  With more millennials deciding to work entry-level corporate jobs, or “play it safe” with traditional career paths, this means fewer entrepreneurial minds creating new inventions and ideas. Startups bring fresh ideas and disruption to the marketplace, while large corporations are slow moving and have different goals.

Most larger corporations are driven to produce and expand their existing products or services and are focused on meeting shareholders profit expectations. Many large corporations do invest in research and development, and partner with smaller companies, but their size and focus in not conducive to innovation. In fact, many large companies end up purchasing smaller, innovative companies to stay ahead of the competition.

There needs to be an emphasis on increasing the number of millennial entrepreneurs in order to foster economic growth, and continuous creativity and originality of products and services. To keep our country the most competitive and dynamic economy in the world, the percentage of business owners under the age of 30 needs to improve from its measly 3.6 percent.  If America wants to continue to be known as the land of opportunity, steps must be taken to improve entrepreneurship among millennials.  Millennials have the desire to start businesses, but now elected officials, public policy experts and those advocating for entrepreneurs need to work together to develop solutions to turn entrepreneurial aspirations into entrepreneurial action among this generation.

Katie Kerrigan is a senior at James Madison University and worked as a Summer Associate at the Small Business & Entrepreneurship Council in 2016. 

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