REPORT: Young U.S. Entrepreneurs Are Now a Dying Breed
The number of entrepreneurs under the age of 30 has reached a 24-year low, according to a report by the Washington Post. In 2013, roughly 3.6% of households run by adults under 30 owned equity in private companies, compared to 10.6% in 1989 and 6.1% in 2010
The reasons for the sharp decline are unknown, but the Washington Post raises a couple of theories.
“One theory is that they face more post-recession challenges raising money. Such fast-growing sectors as energy and healthcare likely require a significant access to credit or capital.”
“Matthew Sattler, 22, of New York temporarily set aside his entrepreneurial dreams in 2014. He created a social-rewards app in college. But in February, he instead took a job in financial planning and analysis with a major airline … Having watched as his own father ran a custom home-building firm, Mr. Sattler said entrepreneurship seemed too difficult a path at his age. ‘It’s much more challenging to be successful without experience,’ he said.”
According to the Ewing Marion Kauffman Foundation, a nonprofit organization that focuses on advancing entrepreneurship, millennials accounted for 22.7% of new entrepreneurs in 2013, down from 26.4% in 2003.
John Davis, faculty chair of the Families in Business Program at Harvard Business School, told the Washington Post:
“We need startups not only for employment, but also for ideas…It’s part of the vitality of this country to have people starting new businesses and trying new things.”
Finally, the last theory posed was that millennials are simply less risk averse.
“Young people have less confidence,’ said Donna Kelley, a professor at Babson College. In an annual survey she oversees, more than 41% of 25-to-34-year-old Americans who saw an opportunity to start a business said fear of failure would keep them from doing so, up from 23.9% in 2001.’The fear of failure is the measure we should be most concerned about,’ she said.”