Millennials are often seen as being innovative and tech-savvy, so many in the business world expect them to be part of the next big wave of entrepreneurs.
It makes sense, after all; millennials are already taking over for the baby boomers when it comes to things like property ownership, so it’s natural for them to take over for baby boomers in entrepreneurship as well. Surprisingly, though, that doesn’t seem to be happening.
From the looks of things, however, it’s only a matter of time.
Millennials and Entrepreneurship
Millennials are 20-somethings and 30-somethings at the moment, and that portion of the workforce is currently dragging its heels when it comes to starting new businesses.
The number of people under 30 who own their own business has dropped by a staggering 65% in the last 30 years, meaning that millennials just aren’t starting their own businesses at a young age like their parents did.
Not only are these numbers low, but they also actually represent the lowest numbers within that period. Part of this may be due to how commerce-driven the 80s were and how many young people were starting businesses during the dot-com bubble of the late 90s and early 2000s, but there’s still a notable dip in young entrepreneurs.
There’s no telling how long this downward trend will continue, either, so it’s possible that the number will drop more before it starts to increase. Once an increase does occur, there’s also no indication yet of how gradual of an increase it will be.
This doesn’t mean that millennials don’t want to own their own businesses, of course. Digging a bit deeper, we can see that the desire to become an entrepreneur actually runs pretty deep within the millennial generation.
According to surveys by America’s Small Business Development Centers, as much as 62% of millennials dream of one day starting their own business.
Around 50% have done more than just dream, too; they’re already working on plans to get something started within the next few years. The desire is obviously there, and it’s aided by the general doubts that many have about the stability of the workforce.
For a large generation like the millennials, being your own boss is one of the only ways that you can guarantee that you won’t be downsized or let go during an unexpected economic downturn. Approximately 61% of millennials surveyed said that they thought the best job security would come from being their own bosses.
If so many millennials want to own their own business, though, why are the numbers so low when we look at who is actually running businesses now? There are a few different contributing factors, and most of them make sense when you look at what the millennial generation is doing and what its priorities are.
More importantly, these factors all suggest that the millennial entrepreneurship numbers that we’re looking at won’t stay low for long.
The Coming Millennial Wave
Just because millennials aren’t starting their own businesses now doesn’t mean that we won’t see a large number of millennial-run startups in the not-too-distant future.
Right now, many millennials are still working on paying off student loan debt and establishing themselves in the world. After all, many millennials are still working the jobs that they got straight out of college (or are still in the process of finding that first big job). They’re gaining valuable experience, pursuing advanced degrees and otherwise finishing up the “startup” phase of their adult lives.
Looking at statistics, the time between when someone turns 40 and when they turn 50 is the most common period for them to start a new business. This means that even the leading edge of the millennial generation is just now getting ready to enter that “sweet spot” for entrepreneurship. If the trend holds true for this generation as it has for previous ones, we’ll see a significant rise in millennial-lead startups begin within the next five to 10 years.
It will be interesting to see what form this coming onslaught of millennial business owners will take. Given the way that technology is progressing and the out-of-the-box thinking that many within the millennial generation have shown, the millennial wave may change the business world itself.