A spate of successful young entrepreneurs set the bar high for those born between 1980 and 1995, and created a belief throughout the business world and popular culture that a rare new breed of innovator had arrived to save the day. But how do those expectations square up with today’s economic reality?
There are plenty of reasons why the stereotypical Millennial would make a great entrepreneur. As a group, they are seen as adaptable and technologically savvy. The internet went social during their teenage years and they grew up on a constant upgrade cycle. The next best thing was always just around the corner. It’s not surprising that they grew up to believe in their own ability to come up with that next best thing. They saw their high profile peers ascend to great heights on the back of sheer ingenuity and a single great idea.
Added to their seemingly intuitive understanding of the power of innovation, Millennials were an exciting prospect economically because of their global perspective and a belief in their own ability to change the world. They were touted by business leaders, thinkers and the media as being no less than humanity’s great hope for redefining the future of businessi. The Millennial generation represented a new type of aspirational entrepreneur: in possession of a social conscience and driven to find true meaning in their workii.
It’s true that it isn’t hard to find examples of examples of high profile Millennial success stories, but if we come back down to earth, the numbers just don’t justify the hype.
Millennials are on track to be the least entrepreneurial generation in recent history.
- John Lettieri, the co-founder of the Economic Innovation Groupiii
Some surveys have appeared to back up the entrepreneurial view of Millennials, finding that a majority of them identify as entrepreneursiv. However, according to findings in The Startup Muster 2017 reportv, the most common age range for Australian business founders is 30-45. Close to 22% of current startup founders are aged between 35 and 40. Millennials feature well in the aspirant category, with one-third of entrepreneurs who want to start something in the future aged between 25 and 35.
It’s a trend that is also evidenced overseas. According to The Wall Street Journal, the number of people under 30 who own a business has fallen by 65 percent since the 1980s.
Could it be that Millennials like the idea of entrepreneurship, and embrace the mentality, but find themselves falling short when it comes to implementation? Or are harsh economic realities thwarting their passion to forge new paths in the business world?
The practical roadblocks
The lack of Millennial-driven entrepreneurial success stories despite their interest in the concept, could be partially attributed to practical factors beyond their control.
For example, initiating a startup and getting it off the ground benefits hugely from having an established revenue flow to fall back on. This points to older, more financially established people being better placed to explore the startup frontier.
The Startup Muster also found that life circumstances and the need for a stable income continue to be the greatest barriers to founding a start-up, with 34.8% of founders admitting those factors were a previous hindrance, and 44.1 % of prospective founders identifying them as a current hindrance. More than 70 percent of founders responding to the survey backed their venture with their own money.
Some research has also pointed to the fact that middle aged entrepreneurs will often bring years of hands on industry experience and practical knowledge to a new business venture, and can be expected to have a more extensive business network to draw on for support and advice.
Other theories suggest that Millennials are not the generation of risk takers we always thought they were, and are prone to opt for stability. This is a natural reaction to economic uncertainty, which results when a generation is saddled with excessive debt. Student debt, in particular, can hang over the heads of people starting out their working life, leading them to prioritise job security over potentially risky startup ideas.
It seems as though the issue could be less about the characteristics of Millennials, and more about the inhospitable economic climate that they find themselves in. The good news is that the potential once recognised by so many business leaders and pundits is still there, it just needs to be empowered with capital within an economic framework that prioritises innovation. There is no reason why the next Mark Zuckerberg-style Millennial innovator can’t be an Australian - we just need to believe in their dreams as much as they do.
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