(This post first appeared on The Independent website.)
Plenty in the jobs stats yesterday to get commentators and bloggers wringing hands about our lost generation of young people. They also gave politicians and campaigners yet another chance to boot the political football labelled ‘youth’. That’s the one that can be kicked around for decades without ever deflating.
The tone of the debate is very much young people as the victims of a failing market needing endless help and support to get back on their feet. It overlooks the fact that increasingly the so-called millennials (people born between the early eighties and mid-nineties) are taking control of the market for themselves and making it work for them. There is growing evidence that this generation is deeply entrepreneurial and self-motivated.
A recent poll of Americans aged 18 to 34, for example, found that more than half would like to start their own firm or had already done so. A separate survey found that 35 per cent of people under 30 in employment had started their own business on the side. While a study of four million Facebook profiles for people aged between 18 and 29 concluded that the pages displayed an “unprecedented entrepreneurial spirit”.
The RSA (working with the National Centre for Social Research) tried to find out whether this was a new phenomenon or not by comparing large scale surveys over the last decade and a half in the UK. We discovered that the desire to start your own business has risen considerably amongst all age groups. However, the 20 to 29 age group in both 1998 and 2010 was the keenest to start a business. But it is today’s twenty-somethings who are taking entrepreneurial ambition to new heights, with close to one third now wanting to launch their own firm.
Many say that such leaps in entrepreneurial ambition are bound to happen at a time of recession as young people are forced into self-employment due to a lack of work. This is undoubtedly one cause but lack of credit and lower consumer confidence could also be seen as factors which actively discourage people from establishing their own business. That is precisely what another major survey found revealing a significant reduction in propensity to set up a business occurring after 2008 in America, France and Germany although, interestingly, not in the UK.
The same survey also found that while the proportion of people setting up in business out of necessity has risen during the recession, this motivation is still far outstripped by the proportion of people doing so because they want to take advantage of a commercial opportunity.
I think there is something far deeper happening to explain the rise of Generation Enterprise. We know from numerous surveys that millennials are far more tapped into the internet and make much wider use of the networks it provides. This explains a lot because the interactive web is transforming the way business is done in all sorts of ways but, in particular, it is making it far easier to set up and run a business.
Marketing no longer requires expensive advertising but can be done through a skillful use of peer-to-peer online networks, which now allow access to global markets.
If you are selling intellectual content then its distribution is now immediate and cheap. If you are selling something that cannot be squeezed down a telephone line then a firm like Amazon or eBay has established the technological infrastructure to allow you to arrange distribution painlessly and cheaply.
If you have a great idea for a product or a service but do not have the capital to develop it fully, or need help with some of the technical details, there is a sea of free advice out there available by tapping into the world of ‘open innovation’. Indeed, doing this also helps you start your marketing process early, by getting your potential customers involved in the development of the product even before it goes on sale.
The world of finance is also opening up. No longer does a young entrepreneur have to face steely-eyed bankers or venture capitalists to get their plans off the ground. The rise of crowdfunding sites means small start-ups can now raise money online by enthusing hundreds or thousands of people with their plans.
With their much closer engagement to the internet, it is hardly surprising that younger people now see setting up a business as something far more natural and low risk than previous generations.
None of this is to urge complacency around the severe challenges many young people face. But the millennials are not a generation of hopeless cases stuck at home with their parents rendered incapable by the very real challenges of finding work and housing. Support from government and other bodies may be needed in some areas but it must start with the recognition that today’s younger generation are more than ready to help themselves.
(You can read more about millennials, enterprise and new technology in my pamphlet Generation Enterprise published earlier this week.)