The Great Millennial Myth
Eight years ago to the day, USA Today ran an article called “Gen Y makes a mark and their imprint is entrepreneurship” that boldly proclaimed a new American movement. Here’s an excerpt:
“They've got the smarts and the confidence to get a job, but increasing numbers of the millennial generation — those in their mid-20s and younger — are deciding corporate America just doesn't fit their needs.
“So armed with a hefty dose of optimism, moxie and self-esteem, they are becoming entrepreneurs.”
That piece and others like it sparked a cultural wave that indelibly branded Gen Y as the entrepreneurial generation.
Influential organizations like the Young Entrepreneurs Council, dozens of popular millennial blogs, and books such as Scott Gerber’s “Never Get a ‘Real’ Job” and Donna Fenn’s “Upstarts! How GenY Entrepreneurs are Rocking the World of Business” ensured that Millennials would forever be linked with entrepreneurship in our minds and theirs.
But that link turned out to be far more myth than reality.
Despite how strongly Millennials identify with entrepreneurs and call themselves entrepreneurs, that connection never materialized. Contrary to popular belief, not only has entrepreneurship in America been on a long and steep decline, that troubling trend is far worse among young adults, ironic as that may be.
The number of startups created in America on an annual basis has fallen nearly 28% from 1977 to 2011, according to Census Bureau data. And the percentage of startups relative to all businesses and working population size have both fallen by more than 50% over the same timeframe.
The downward trend is not absolutely linear. There was, interestingly enough, a five-year uptick beginning around the start of 2001 and corresponding to the timeframe directly following the dot-com bust. Unfortunately, that didn’t last as business creation fell off a cliff around 2006.
The multi-decade decline is across the board in every region and every industry, but it’s most pronounced among the “millennial” age group, which created just 22% of all new companies in 2013, down from 34% in 1996. Meanwhile, the trend is reversed for the “boomer” age group, which surpassed Gen Y in starting 23% of new businesses last year, up from 14% in 1996.
Meanwhile, unemployment and underemployment rates among Millennials are staggering, almost twice that of the general population. And that’s led to the lowest workforce participation rate in 40 years. On top of that, Gen Y is by far the most indebted generation in history. By mid-2013 U.S. federal student loan debt topped $1.2 trillion. And that’s up 20% is less than two years.
In case you’re wondering how such an enormous disconnect could be possible, remember that we live in a post-Web 2.0 world dominated by social media and user-generated content. One survey showing that a thousand young people would rather rule their own destiny than slave away in corporate America is all it takes.
Once it’s gone viral on Twitter, Facebook and LinkedIn, that sentiment becomes doctrine in people’s minds. Throw in some books, blogs and seminars by the hordes of hungry opportunistic consultants that smell money and, next thing you know, you’ve got a bona fide movement built on nothing but hot air.
And the smoking gun in this case is, of all things, a survey showing the vast majority of Millennials see entrepreneurship as a state of mind that has nothing to do with starting or owning a business. They don’t actually have to become entrepreneurs. All they have to do is think they’re entrepreneurs. Who needs products, customers and employees anyway?
You just can’t make this stuff up.
Funny, I was just checking out a book called How to Change the World: Social Entrepreneurs and the Power of New Ideas. The book’s Amazon page has some surprising facts by author David Bornstein, including “97% of Generation Y are looking for work that allows them ‘to have an impact on the world,’” according to a Harris Poll.
He also provides a long list of famous business leaders investing a great deal of time and money on social entrepreneurship, including Bill Gates, Warren Buffett, eBay founder Pierre Omidyar, Google founders Sergey Brin and Larry Page, and venture capitalists William Draper and John Doerr.
I wouldn’t be the least bit surprised if the Millennials from the Harris Poll would look at that list and think, “Wow, I can be a social entrepreneur and become a billionaire,” without ever realizing that none of those leaders would have a pot to piss in if they hadn’t founded and built great companies.
And to this day, the myth lives on.