Millenials May Be Less Entrepreneurial Than Previous Generations: And There's A Damned Good Reason

The inclination for older generations to put down younger ones is probably rooted in some sort of genetically coded threat assessment. The youngsters, so they believe, have more energy, are grasping, ambitious, unqualified - and they want what's mine.

The 'what's with young people today?' meme has been around since humans first climbed out of the trees on the African savannah. And it is no less boring today than it probably was then.

Boomers, of all people, should be especially resistant to this urge given all the grief they took about hair, bell bottoms, women's lib and general attitude.

But these articles keep popping up, like the one below. Matching one generation against another and making invidious comparisons based on incomplete or inaccurate assessments of the data. In this case, it would appear that the base evidence is correct: the Millenial generation seems to be creating fewer new businesses than did its predecessors. But before the gray hairs start thumping their chests and high fiving each other in righteous glee, some evaluation of the context is required.

The fundamental issue, of course, has nothing to do with aptitude or desire. It has to do with the mess created by said previous gens whose negligent grasping led to the worst global financial crisis in almost a century. As a result, investment capital availability plummeted, societal resistance to risk escalated and entrepreneurial opportunities withered, leaving Millenials with a lot more debt than advantages. Their predecessors enjoyed a surfeit of easy money based in part on the post WWII advantages still being enjoyed by the US and some other developed countries, still relatively weak BRIC nations and lots of benefits based on restrictive trade agreements. The one area in which there has been growth, mobile apps, has been, until recently, noteworthy for the relative inexpensiveness of the endeavor.

Cross-generational comparisons are nonsensical by virtue of the differing circumstances in which they find themselves. But the conditions, influences and competitive framework in which they must operate are worthy of analysis. The Millenials will ultimately contribute as much as every other preceding generation - but hopefully they will do so while interpreting the comparative data correctly. JL

David Yanofsky reports in Quartz:

The whiz-kid with an idea who vigorously taps out code while hyped up on energy drinks then launches a business to astronomical success is the exception, not the rule.

While that image is now embedded in American folklore thanks to names like Gates, Jobs, Bezos, and Dell, older entrepreneurs are now 30% more common than younger ones in America, according to new data from the Kauffman Foundation. For every 10 Mark Zuckerbergs (founders aged 20 to 34) there are 13 Reed Hastings (founders aged 35 to 44).
What’s more, the trend is accelerating. Young Americans’ drive to create new businesses declined this year to six-year low of 230 businesses per 100,000 adults. Entrepreneurship among those aged 55 to 64 and 35 to 44 each increased to 340 businesses per 100,000 adults, in 2012.
The Kauffman Foundation report measured the rate of individuals creating businesses each month as a percentage of adult, non-business owners at the start of that month. The data capture the formation of both incorporated and unincorporated businesses, where the business is the creator’s main job, irrespective of the number of jobs created.