Society gets many things wrong about Millennials. One persistent myth is they are the generation of entrepreneurs and their role model is Facebook CEO Mark Zuckerberg.
But people born between the early 1980s and mid-1990s show something different, according to a new Ipsos entrepreneurship survey. Globally, just 14 percent of Millennials on average have started a business. That’s less than half of the 30 percent of Gen Xers and Baby Boomers who report having launched a commercial enterprise. Millennials in Canada also report fewer business founders. In America, Millennials were more active than GenX-ers but less than Boomers.
While their younger age could explain the gap, American Millennials reported lower self-employment rates at age 30 than prior generations, according to the U.S. Small Business Administration. This is a troubling trend given how entrepreneurship drives job growth.
“Virtually all net new jobs are created by businesses younger than five years,” said Victor Hwang, vice president of entrepreneurship for the Ewing Marion Kauffman Foundation, in a recent TEDx talk. Kauffman supports education and entrepreneurship. It is so concerned about the generational decline in entrepreneurship, it is revamping its whole approach to researching the sector. “The evidence shows that our long-term economic well-being comes from our ability to start and grow new businesses,” said Hwang.
While not all start-ups are technology companies, that sector has driven a huge swath of economic growth. So, a slow-down in entrepreneurship has broad implications for the U.S. economy in particular. According to a post in the Wall Street Journal by Richard Florida and Ian Hathaway, “as late as the mid-1990s, the U.S. was home to roughly 95% of all venture capital investment in the world; today its share has dropped to just over 50%. About half of this two-decade decline has occurred in the last five years alone.
Where Millennials lead
As entrepreneurs, Americans and Canadians are well behind their global peers. Just under a quarter of poll participants in the U.S. say they started at least one business in the past. One in five Canadians say the same. That puts them in the bottom third of countries where Saudi Arabia and Mexico lead and France and Japan trail.
But where Millennials stand out is in social enterprise development. There, 13 percent of respondents globally have started a charity or community group and 13 percent an interest group.
While only one in 10 people globally have started an interest group, it’s a surprisingly large figure, says Colledge. “They’re not just doing it for the money,” he says. “They’re doing to have say and control in their lives and to have effective communities.” American Millennials were three times more active with charities and twice as active starting interest groups than both older generations combined.
In many ways, Alex Niemczewski fits the typical demographic of a business entrepreneur. The co-founder and CEO of BallotReady is educated, affluent, tech-savvy and entrepreneurially minded. She’s also part of a stubborn American trend where male founders outnumber women two to one. Niemczewski also fits the profile of social enterprise founders.
She and her co-founder Aviva Rosman created the website to help voters research candidates and issues on the ballot and feel informed at the polls. The 31-year-old has been volunteering since she was a kid working with homeless shelters to helping kids travel to medical treatments. “I really want to solve meaningful problems,” she says. Now she does it through the internet.
Other Millennial myths
Given the digital disruption that fuels Silicon Valley, it is surprising that more American Millennials aren’t the technology whiz-kids they’re purported to be. Globally and in the U.S., two in five people say they struggle to keep up with technological changes. Even fewer trust artificial intelligence. About a third of people worldwide agree they trust AI and just 25 percent of Americans agree. “They’re entrepreneurs first, not tech first,” says Colledge.
Another myth is that while Millennials bore the brunt of the Recession, they’re starting companies as a last resort, says Colledge. Full-time employment among Millennials jumped from 45% in 2016 to 66% in 2018, according to Harvard Business Review data.
Many people are leaving big jobs to go start companies, says Colledge. “If you’re a Millennial, you aspire to have input and social input.”
That was the case for BallotReady’s Niemczewski, who left her job when the project showed promise. “I wasn’t thinking ‘this is a good economic time to start a business,’” she says. “I was so obsessed with thinking about it all the time, it was all I wanted to do.”