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The millennial generation is shaping the modern workforce—whether you like it or not. They’ve been blamed for a host of problems, such as being too entitled and obsessed with social media, and credited with several positives, such as appreciating creativity and having higher moral values. But of course, all of this depends on who you ask—some people claim these traits are inherent in the millennial generation, while others assert that they’re attributable to the coincidental youth of this particular generation or exist purely as anecdotal evidence.
While the millennial’s role as an employee in the workplace is important, one of the biggest drivers of economic growth (and the shape of the modern workplace) is entrepreneurship. New and small businesses represent the majority of job growth, and help to spark new trends and drive new technologies in various industries.
But just like with working personality traits, reports on millennial roles in entrepreneurship are mixed, and oftentimes contradictory. So are millennials more or less likely than previous generations to start their own businesses?
Youth and Business Statistics
According to the 2016 BNP Paribas Global Entrepreneur Report, millennials are starting businesses at younger ages than their counterparts in previous generations. Baby boomers, for example, tended to launch their first business at an average of 35 years of age. Millennials, on the other hand, start their first business around age 27, implying they’re more eager to start businesses and possibly, are more willing to take risks in doing so. The report also shows that millennials have launched about twice as many businesses as their baby boomer counterparts have—but this statistic is misleading in a few ways. It doesn’t tell you how many millennials are starting businesses—just how many businesses millennials have started. Plus, it doesn’t tell you how successful those businesses were or how long they lasted, which is significant in a world where starting a business is as simple as clicking a button.
Desires and Values
Surveys suggest that millennials value entrepreneurship and startups more than generations past, with the majority of millennials admiring entrepreneurs and loving the idea of being self-employed. Over 62% of millennials have considered starting their own business, with 72% feeling that startups and entrepreneurs are a necessary economic force for creating jobs and driving innovation. It’s clear that millennials like the idea of starting businesses, but does that translate to actual entrepreneurship?
Studying the Population
According to the Small Business Administration, only about 2% of millennials were self-employed as of 2014. Compare that to 7.6% of generation Xers and 8.3% of baby boomers. This implies that millennials today are far less likely to start or own their own businesses than their older counterparts. And that’s not all. The Kaufman Foundation found similarly surprising statistics on millennials starting businesses; young people represented about 23% of new entrepreneurs in 2013, which is down from 35% back in 1996. This implies that age differences alone aren’t enough to justify that discrepancy; it appears to be a generational shift.
Clearly, this contradicts the facts that millennials are starting more businesses, and that they value entrepreneurship more than previous generations. So what’s the deal?
Why Millennial Entrepreneurship Is a Mess
There are several things complicating our views on millennial entrepreneurship, and I can clarify a few of them:
- Fewer millennials starting more businesses. First, the discrepancy between millennials starting more businesses and fewer millennials starting businesses is simple; fewer millennials are starting more businesses. Serial entrepreneurs are artificially inflating the numbers of the entire generation, in large part because it’s so fast and easy to create and burn through a new business.
- Values vs. opportunities. Even though millennials love the idea of starting businesses, they recognize that economic conditions aren’t favorable—or otherwise are prohibited from starting businesses due to personal circumstances. For example, many millennials are currently saddled with student debt, and are having trouble landing jobs in their areas of specialty. This makes it nearly impossible for those groups to acquire the experience, confidence, and financial backing necessary to create the enterprises they envision.
- The complication of age. Finally, the age of the millennial generation complicates the statistics we’re able to gather. Comparing millennials to baby boomers outright, as they exist today, yields the bias of age; what can you attribute to generational differences, and what can you attribute to age differences? While some studies do attempt to account for this, we also must consider the fact that millennials are still a “new” generation, and we only have limited data on their entrepreneurial and professional habits. This oftentimes isn’t enough to draw a meaningful conclusion.
It’s definitely true that millennials love the idea of starting businesses, but the data is more complicated than it seems. Certainly, some millennials are jumping into entrepreneurship and doing quite well, starting far more businesses than their previous generational counterparts, but others are pessimistic or overburdened, unable to make a move. There’s no single summary to define the millennial entrepreneur, which on some level is fitting for such a strange and multifaceted era.
