Feb 28

Millennials still hesitant to start businesses even when they hit 30, SBA research finds – The Business Journals


Millennials don’t improve much with age when it comes to entrepreneurship.

That’s the takeaway from yet another survey that finds millennials are starting fewer businesses than their counterparts in other generations.

This study, by the Small Business Administration’s Office of Advocacy, used self-employment numbers from the Census Bureau as a proxy for business ownership. It found that fewer than 2 percent of millennials were self-employed in 2014, compared with 7.6 percent of Generation X and 8.3 percent of baby boomers.

That’s not too surprising, since self-employment typically rises with age.

This study echoes the findings of a Kauffman Foundation analysis, which found that only 2.77 percent of Americans age 20-34 owned a business last year, compared with a 4.41 percent business ownership rate for that age group in 1996.

These studies are troubling because lower entrepreneurship rates for millennials could lead to less job creation and less innovation in the future.

“Low entrepreneurship among millennials implies fewer new businesses and may therefore have negative implications for economic,” writes Daniel Wilmoth, a research economist at the SBA’s Office of Advocacy.

“I hope today’s report demonstrates the need for new ideas to help create a more favorable environment for America’s millennial entrepreneurs,” said Darryl DePriest, chief counsel for advocacy at the SBA.

A recent poll of millennials found that many cited student loan debt as a barrierto entrepreneurship. Other studies have found that millennials are more risk-averse than previous generations, since many of them came of age during the financial crisis and the Great Recession that accompanied it.

There are notable exceptions — Facebook founder Mark Zuckerberg is only 31, for example. And former hedge fund manager/pharmaceutical entrepreneur Martin Shrkreli is only 32. Shrkreli isn’t much of a role model for millennials, however. He faces federal fraud charges in connection with his hedge fund, and refused to answer questions at a House hearing Thursday about his decision to jack up the price of a life-saving drug to $750 a pill.

Source: Millennials still hesitant to start businesses even when they hit 30, SBA research finds – The Business Journals

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