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Millennials desire to be entrepreneurs but the economy is killing them

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BY KEVIN SAWYER – A recent national survey of Millennials (20-35 years old) has found that this generation has the entrepreneurial spirit, and many seek to strike out on their own, but the fragile and uncertain economy is preventing them from doing so. There is so much working against them in the present economy, to say nothing of the enormous student debt they are dealing with, that many are giving up on their dreams of starting their own businesses.

The research was conducted by the Economic Innovation Group (EIG) and their results were presented to the U.S. Senate’s Committee on Small Business and Entrepreneurship. EIG’s founder, John Lettieri, told the assembled senators that, “Millennials are on track to become the least entrepreneurial generation in history.”

Despite such a bleak pronouncement, the research found that nearly 60% of the Millennials interviewed stated that they believe that their generation is even more entrepreneurial than either the Gen Xers or the Baby Boomers. The spirit is there, it seems, but the statistics don’t seem to be. Despite many of this generation starting food trucks, driving for Uber, selling clothing out at Etsy and even starting up influential tech companies, only 2% of this generation is self employed. This is from recent research done by the Small Business Administration which found that the Millennials are at 2% while the Gen Xers are at 7.6% and 8.3% of Baby Boomers are self employed entrepreneurs.

While the Millennial generation seems to believe that they are self starters and entrepreneurs at heart, again, the research is telling a whole different story and that story is that they simply may not be an entrepreneurial generation. Research put out by the Kaufmann Foundation, and by the Brookings Institution, finds that business formations have been in a huge free fall drop for the last ten years and that, in 2013, only 23% of young people were starting businesses compared with 35% of young people starting businesses back in 1996.

The major culprit, this research uncovered, is a mountain of debt this generation has as well as a nervous anxiety about being able to pay it all back in the long term. This, coupled with a lack of available start up capital, is what is, for the most part, keeping the Millennials from being more entrepreneurial than it seems they would like to be. For this generation, staring up a company is viewed as being just too risky for them to undertake.

Here are some final findings from the EIG research:

  • 63% have considered starting a business but the same 63% said they wouldn’t be able to cover an unexpected expense of just $500.
  • 78% said they are worried about “having good job opportunities”.
  • 79% stated that they are really concerned that they wouldn’t end up with enough money saved to be able to retire.
  • 54% stated that they feel that their standard of living is going to be much lower than that of their parents.
  • 40% of those surveyed are still living with their parents.

 

PHOTO CREDIT: Pixabay