Lost in the daily churn of American politics is a bit of good news for the U.S. economy.
According to a recently released Babson College study, 27 million Americans are starting or running new businesses. In other words, nearly 14 percent of the U.S. adult population is pursuing early-stage entrepreneurial activity—much of which is motivated by a renewed sense of economic opportunity. Compared to other developed economies, U.S. entrepreneurial activity is 50 percent better than average.
Indeed, the dark days of the Great Recession finally appear to be in the rearview. Based on the Kaufman Index of Entrepreneurship, entrepreneurial activity is at higher levels now than those recorded in 2007, as business survival rates hover around record highs.
But here’s the bad news: That positive momentum is not driven by millennials. According to Babson’s study, Americans aged 35-44 are the most entrepreneurially active. A separate study from the U.S. Small Business Administration (SBA) paints a similar picture: Fewer than four percent of 30-year-olds report to be in full-time self-employment, trailing Generation X-ers and Baby Boomers.
Even as primetime shows like Shark Tank attract millions of viewers, the allure of entrepreneurship is one that too often escapes America’s youngest employees. From risk-aversion to introversion and the burden of student loan debt, there are many explanations for millennials choosing more traditional career paths—some more reasonable than others.
Let’s face it: A traditional career path is the easier one to travel. Entrepreneurship is hard work—a lot of thankless, stress-inducing work. As Skype co-founder Niklas Zennstrom once said, “If you want to be an entrepreneur, it’s not a job, it’s a lifestyle. It defines you. Forget about vacations, about going home at 6 p.m.”
I’m a millennial entrepreneur myself, and he’s right. In today’s day and age, checking and sending emails consumes you. Business is always on your mind—there is no “COB.” The only vacations are work trips.
The stakes are simply too high for complacency. After all, one-fifth of small businesses fail in their first year. Half of them fail after five years of business, and most after a decade. The pull of a traditional career path is strong for a reason—stability and comfort are indeed desirable.
Nonetheless, the millennial generation’s overall lack of entrepreneurial spirit is discouraging. Some of that is understandable—again, it’s difficult to start and run a business when you’re paying off $100,000 in student loan debt. But socioeconomic factors don’t account for all of the generational gap. Much of it can be traced to risk-aversion, introversion, lack of confidence, and other factors more within our control.
Whatever the reason, that gap does not bode well for the U.S. economy moving forward. After all, entrepreneurial spirit—the constant churn of innovation—is what made the American economy unprecedented, and unrivaled on a global stage. In the words of Shark Tank co-host Mark Cuban, entrepreneurship is still “what makes this country grow.”
From Silicon Valley to K Street and Wall Street, America’s landscape is littered with entrepreneurial success stories that have created millions of jobs and billions of dollars in economic output. That is, in a way, the American success story: A single individual starting and running a small business that, over time, becomes a larger business—perhaps even Big Business.
Even if a small business never grows into the next Amazon or Apple, the cumulative effect of entrepreneurship is undeniable. America is home to more than 30 million small businesses, employing roughly half of the private-sector workforce. In fact, 99.9 percent of all U.S. business is small business. That’s right: 99.9 percent!
If we are to remain the world’s most innovative economy, then it’s time for millennials to assume a greater role in that innovation. Without us, our future is far more finite.
Catalyst articles by Luka Ladan