Young people are more entrepreneurial than ever – but challenges remain
Young people are more entrepreneurial than ever, starting twice as many businesses as the baby boomer generation according to recent data. But challenges remain for aspiring young entrepreneurs, among these the unequal distribution of family business experience and the barriers to starting a business after studying abroad.
A new generation of entrepreneurs dubbed rather awkwardly the ‘Millennipreneurs’ steal the show in BNP Paribas’ latest edition of the Global Entrepreneur Report, a global survey that maps trends in entrepreneurial activity and attitudes. Almost 3000 multimillionaire entrepreneurs were polled, in 18 countries.
According to the bank, this new vanguard of entrepreneurs aged 35 and under take a different approach to business from older generations, especially in terms of their ambitions and leadership style:
“They create more companies, with larger headcounts and higher target profits. They certainly tend to be interested in the new economy, but are also equally active in many traditional sectors including Retail and Professional services such as law and accounting’
The numbers bring home the point. While ‘baby boomers’ aged 50 and above have on average started 3.5 companies, this figure more than doubles to 7.7 companies for the millennial group. A highly impressive statistic to say the least, and one that suggests that today’s twenty and thirty somethings are achieving truly unprecedented levels of entrepreneurial activity.
On the other hand, the Paribas research also revealed that 78% of polled millennial entrepreneurs came from families with a history of running their own business. A successful business in the family gives a young person access to expertise, networks and capital that he or she would otherwise lack. While this is not wrong in itself, it does imply a less than level playing field, a challenge to those who believe in meritocracy.
The fact that such a high proportion of successful young entrepreneurs come from families with business experience highlights the work that needs to be done by organisations such as the Centre for Entrepreneurs and others in making entrepreneurship a career path truly open to all. This work might include improving the quality and accessibility of entrepreneurship education in schools and universities, connecting successful entrepreneurs with young people as mentors, and increasing both the availability and awareness of funding schemes for startups. Above all, we must ensure that the obvious entrepreneurial potential of today’s millennials is realised, regardless of background.
Another notable piece of research published recently by think-tank IPPR, Trajectory and Transience, argues that the UK needs to do a better job at integrating its immigrants, freeing them to contribute to economic growth. With specific regard to young people, universities should be doing more to help international students secure post-graduate work visas, and linking them up with areas of the economy where their skills are most needed. Qualified international students that secure visas and:
‘choose to put down roots are more likely to contribute both to the local economy – as investors, entrepreneurs or by filling skills gaps in the local labour market’
Indeed, a 2014 Centre for Entrepreneurs report – Migrant entrepreneurs: building our businesses, creating our jobs – revealed that migrants are in fact twice as active entrepreneurially as UK natives, and have started 1 in 7 UK businesses.
Making it easier for international students to stay on after their degrees – who by definition possess three traits associated with higher rates of entrepreneurship: youth, higher education and foreign citizenship – will mean that the UK attracts more of the ambitious ‘Millennipreneurs’ identified by BNP Paribas, and gets them contributing to an economy ranked as one of the most entrepreneurial and business-friendly in the world.
The IPPR report fails to mention the existence of a graduate entrepreneur visa in the UK, an avenue for aspiring student entrepreneurs that has had limited take-up so far. We at the Centre for Entrepreneurs have argued that this particular visa needs to be better publicised, as evidence suggests that a high proportion of international students want to start up businesses post-graduation. The expanded role of universities recommended by IPPR should therefore also include raising awareness of the graduate entrepreneur visa.
Young people are more entrepreneurial than ever, and certainly more entrepreneurial than their older ‘baby boomer’ parents. We as a society should be doing all we can to ensure that this latent potential is fully realised, and that external factors – be it family connections and wealth, or an inadequate immigration regime – do not hinder the ‘Millennipreneurs’.