On any given day, America’s millennials — women and men born between 1982 and 2000 — are depicted as either enterprising or entitled, depending on who’s talking.
The National Women’s Business Council (NWBC) recently decided to find out the truth, at least for young would-be women business owners. After all, recent data have shown that millennials are starting businesses at lower rates than earlier generations at the same age. But do today’s young people truly lack entrepreneurial spirit? Or is something else going on?
Well, it’s not for lack of entrepreneurial desire, NWBC’s research shows. Many more millennial women say they want to start up than actually do, according to a multi-source report it released last week. It found that while 66 percent of millennials, female and male, express interest in launching a venture, only 5 percent have actually done so. Some 4 percent of 30-year-olds say they are self-employed, compared to 5.5 percent of Generation X and 6.7 percent of Baby Boomers when they were 30.
“While today’s young people lead the country in entrepreneurship as a mentality, they are not leaders in entrepreneurship as an occupation and activity,” says Dolores Rowen, NWBC’s research manager.
So do millennials lack drive? The agency’s preliminary research suggests the answer is no, particularly among young women.
Rather, the trouble seems to be crushing student loan debt and depressed incomes following the Great Recession that are only slowly improving, according to the report. “Post-recession unemployment has begun to abate, increasing employment among millennial Americans. However, wages have declined twice as fast for millennials as for the rest of the population. In addition, millennial women consistently earn less than their male counterparts.”
More millennials have college debt, and they owe a lot of money. The number educational borrowers rose 89 percent in the decade between 2014 and 2004, while average debt balances grew 77 percent, NWBC found. Those trends suggest a heavy burden for today’s young business owners, who are also statistically more likely to bootstrap startups than their counterparts in previous generations.
Additional studies are needed to understand what to do to make entrepreneurship a more accessible option for young women. “Developing an understanding of who millennial women entrepreneurs are, what drives them and what challenges they face is germane to developing policies and regulatory changes that support growth,” the report says.
The impact of student loan debt on female millennial entrepreneurship is of particular concern to Rowen. Her conversations with leaders on the ground suggest that expanding student-loan forgiveness programs to include young female entrepreneurs could help, she says.
Outreach and education is needed too. “There seems to be a lack of awareness regarding entrepreneurship as a possible career route,” she adds. And among those considering starting up, few know about the U.S. Small Business Administration’s Women’s Business Centers, or other government programs like Small Business Innovation Research and Small Business Technology Transfer that can help them get off the ground.
“There is a community here that wants to help you succeed,” she says. “Millennials are our next job creators. We want to make sure we’re putting in the right support systems for that population, to ensure they are getting what they need.”
You can read the full NWBC report here.