Few of these future lifestyle entrepreneurs will start companies in manufacturing or even retail, sectors of the small-business community that are in precipitous decline. Manufacturing alone has lost nearly 3 million jobs over the past five years, and small manufacturers have been particularly hard hit, as they have been unable to compete with low wages overseas. According to a 2000 study by the SBA, by 2010, "the relative shares of employment in the manufacturing and service sectors are expected to be just about opposite of the 1950 levels"; and by 2015, roughly 35 percent of American businesses will be in services. The most recent survey from the Global Entrepreneurship Monitor, a research program-funded by the Ewing Marion Kauffman Foundation and conducted by Babson College-that assesses the national level of entrepreneurship, says that over the next five years, the most highly educated entrepreneurs, who more often start IT or service businesses, will have the most employees.
As entrepreneurs of the future increasingly move into higher-value service businesses, they will also have to attain higher levels of education and interact more with foreign suppliers and customers to succeed. Howard Aldrich, a professor of sociology at the University of North Carolina, Chapel Hill, who has studied entrepreneurship, says that today, education is the key predictor of business formation-people with more education are more likely to start a business. What's more, for a service business to compete in an increasingly global marketplace, future entrepreneurs-in IT, biotechnology, customer service, consulting and other fields-will have to outsource, sell and purchase abroad. The Department of Commerce estimates the number of small companies that export tripled between 1987 and 1997, and small-business experts expect the trend to continue.
Looking to the Future Though the entrepreneur of the future may be more racially diverse, older, devoted to personal and family time, more globally focused, better-educated and more concentrated on services, he or she will still need some core traits to succeed. Alex De Noble, a professor of entrepreneurship at San Diego State University, says, "You need to have certain principles of personality" to succeed in small business at any time.
Indeed, by studying entrepreneurs in a range of locales, De Noble and several colleagues have concluded that successful entrepreneurship requires a certain amount of neuroticism, extro-version, conscientiousness, agreeableness and openness. Neuroticism, De Noble says, leads entrepreneurs to focus on details, while conscientiousness helps them plan. Agreeableness allows them to build external networks crucial for a new company to prosper, extroversion facilitates this network-building, and openness to new ideas is crucial for taking the leap into business ventures. Indeed, De Noble says, 10 or 20 years from now, we will still recognize the characteristics of successful entrepreneurs: Despite the changes in the external business environment, "running a business is still running a business."
Trisha Anderson was a pioneer. In 1999, in her late 40s, she decided she'd had enough of the corporate life and wanted to try entrepreneurship-in an area that fit her lifestyle. "The life I was living, swept up in the rat race, was making me sick-physically and spiritually," Anderson notes. So she founded mybackyard.com, a Web site that provides information on organic foods, eco-friendly gardening and other environmental topics and also sells products related to these topics.
There was only one drawback: "There weren't older entrepreneurs around, and I felt very different," Anderson says. Regardless, she got her company off the ground, advertising it through link exchanges and word-of-mouth. By 2003, her homebased mybackyard.com had roughly 50,000 unique visitors each month, and Anderson had two employees working for her.
Even better, as the number of older entrepreneurs in America has skyrocketed, Anderson no longer feels so alone. "In the current economic environment, many ex-employees start companies," she says. Anderson credits the trade group Forum for Women Entrepreneurs (FWE) for putting her in contact with other people in her situation. "The FWE seemed to be age-blind," she says.
Today, Anderson has few regrets about her decision. "I have never wanted to go back to my old job," she says. "I didn't anticipate how totally life-consuming [entrepreneurship] would be, or how much stuff you have to do yourself when you start a business. But it has given me the confidence I need."
Anderson has been an inspiration to other older entrepreneurs as well: "My husband and his colleague are about to launch [their own] product."
Joshua Kurlantzick is a writer in Washington DC.