Why Young Europeans See Online Trading as an Alternative to Entrepreneurship Sixty-two percent of millennials like the idea of entrepreneurship, but only 2 percent run their own business.
By Simon Moser Edited by Jason Fell
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We are living in a quite paradox world at the moment. The European continent has been experiencing an extremely flourishing economy for the past seven decades, which brought incredible wealth to the industrial nations of Europe. However, with rising economic instability, a rapidly widening gap between the rich and the poor and a potential financial meltdown around the corner, things are taking a turn for the worse.
With the internet being a daily companion for almost every single young European, looking for an additional, independent income source that profits from the world wide web seems like a reasonable answer to recent global developments. The only question is: what is actually a valid opportunity?
Who wants to be an entrepreneur?
According to a survey conducted by NPR, about 62 percent of millenials like the idea of entrepreneurship and already considered launching their own business. While this desire clearly shows that younger generations are strongly interested in creating their own source of income, it does, unfortunately, not match reality at all. In fact, as of 2014, only 2 percent of millennials actually run their own business, in contrast to the 8.2 percent of baby boomers who do.
The reasons for this situation might not be entirely transparent, but, especially in the EU, the immense bureaucratic hurdles, strict regulations and high-tax systems of many nations are undoubtedly factors that younger generations are taking into account. For instance, the EU's GDPR is often seen as a major stumbling block for many small online businesses, while upcoming regulations in the hemp industry could significantly impair the aspiring European cannabis sector.
Looking for alternatives
With all these obstacles that modern entrepreneurs need to circumnavigate, younger generations are currently looking for lucrative alternatives. According to Manuel Heyden, who is the CEO of a popular European online trading platform called nextmarkets, online trading is currently gaining popularity among young adults across Europe. "In the past three years, the share of our users below the age of 30 increased by more than 25 percent," Heyden said in a recent interview with me.
When asked about possible causes for this dramatic surge, Heyden explained that "the entry barrier for trading is significantly lower than it was 30 years ago. Nowadays, everyone with a decent internet connection is able to learn the basic economic principles of trading and, therefore, earn a decent side income with only a few hundred euros."
It is true that the internet offers an unbelievable amount of learning material and data that aspiring traders can make use of. Publications such as Investopedia give access to thousands of excellent articles, written by actual trading experts, that will teach you everything from basic trading rules to complex technical analysis skills. The same could be achieved by taking online courses on learning platforms like Udemy.
Moreover, online trading comes with numerous technical benefits that traditional businesses lack, as it is usually less affected by regulations, bureaucracy and the current economic situation. Aside from that, beginners can easily improve their skills without risking a single penny by using the demo programs that many trading platforms are offering.
The European market reacts
As interest in online trading is undoubtedly rising, the financial space of Europe is taking steps in order to satisfy the demand as swiftly as possible. In January 2019, Boerse Stuttgart, Germany's second largest stock exchange, officially launched a novel cryptocurrency trading app called Bison. This falls in line with a recent endeavor of Nasdaq, which recently launched its Estonia-based and EU-focused crypto trading platform DX.Exchange.
Many financial service firms in Europe are currently working on providing a better user experience for their European customers. As stated in a recent report of Finance Magnates, zero-fee stock trading, like it is available on the popular U.S. exchange Robinhood, should soon come to Europe as well.
What's next?
In times where professional traders, such as Nassim Nicholas Taleb, have a social media following of several hundreds of thousands of people, trading could develop into a serious trend among people between the ages of 18 and 35 years. Additionally, as many trading applications are now actually providing high-quality educational opportunities, such as nextmarket's online-coach concept, it is almost certain that even more young adults will ditch entrepreneurship and instead learn the profession of a trader.
Furthermore, college students appear to be a group of people that might be particularly interested in online trading. Just a few months ago, two American finance professors explained in an article in BizEd magazine that "a good grasp of a market's dynamics is essential for many business school graduates, not just those who plan to be traders." According to the duo, most students currently lack knowledge of this "critically important, interdisciplinary activity."
