Why More Millennials are Bullish on Entrepreneurship
Optimism is back in a big way among U.S. entrepreneurs, especially the millennial set. According to a new global report, the wounds of the Great Recession have healed and more Americans are willing to take a shot at being their own bosses.
More young people, ages 25 to 34. are starting businesses in the United States, according to the Global Entrepreneurship Monitor released Tuesday by Boston-area Babson College, compiling data from 73 economies and more than 200,000 respondents around the world. In 2014, 18 percent of Americans in that age group were starting or running new businesses, compared to 15 percent in 2013. This is the report's 16th year.
What's more, rates of entrepreneurship in the U.S. across all age groups climbed to nearly 14 percent last year, from a post-recession bottom of 7.6 percent in 2010. Babson entrepreneurship professor Donna Kelley adds the report's data are highly comprehensive in terms of early stage start-ups because researchers are monitoring people who are starting companies while they are still working other jobs.
Fifty-one percent of the working age population in America sees good opportunities to launch businesses according to this year's report, up from 47 percent in 2013, Kelley said. More people are also starting businesses because they want to, rather than because they have to, she points out.
"It's very motivating, and the rate of failure is also slightly declining," she said. "There may have been lingering hesitation, and some people had been wanting to hang on to their jobs. Banks also are more likely to lend, and there are more support systems that may not have been there during the recession."
Optimism among American entrepreneurs has also been increasing in the National Federation of Independent Business' monthly index, which hit its highest levels since October 2006 in last month's reading, bolstered by a sunnier outlook post- midterm elections, according to the conservative industry group.
For Jason Rappaport, now is as good a time as any to be an entrepreneur. In fact, he said he can't imagine doing anything else.
"I couldn't find meaning in something that I wasn't making myself," he said. "There are things that are very important to me, that I don't see other people doing."
Rappaport, 25, started his Philadelphia-based company Squareknot in 2013, which allows users to make collaborative online guides, adjusted to their own preferences.
"I feel strongly that part of being an entrepreneur is making it happen, even when the cards are stacked against me—time doesn't matter," he said. "Right now it's cheaper and easier than ever to build products."
The fact that there are fewer barriers to entry is one factor boosting entrepreneurial optimism globally, Kelley pointed out, with technology a leading force in this shift. Optimism levels climbed globally, with the exception of Europe, where entrepreneurs are feeling less certain about opportunities.
"People can start businesses on their own and be a part of the value chain that doesn't require you to hire employees," she said. "You can open a retail store on your own today thanks to technology."