More than half of millennials desire to start a business, but fewer are creating new businesses than previous generations did at a similar age, according to a brief from the Center for American Progress.
Generation Progress, the youth advocacy arm of the Center for American Progress, brought together young entrepreneurs from Oakland, California; New York City and Columbus, Ohio and asked them about their experiences, the challenges they have faced and what policies they would recommend to remove the barriers to starting a business.
“Millennials have the drive and desire to start their own businesses, but would-be entrepreneurs are held back by the slow economy, high student-debt levels and a complicated legal and regulatory framework,” said Sarah Ayres Steinberg, a policy analyst at the Center for American Progress and the author of the brief. “In addition, many investors and policymakers hold outdated views about who can be an entrepreneur and what constitutes entrepreneurship.”
Participants in the discussions agreed:
• High levels of student debt are one of the biggest hurdles to starting a business, confirming many experts’ view that today’s record-high student-debt levels are inhibiting entrepreneurship and broader economic growth. “My mom owned her own business for years, and I wanted to follow that path after I graduated,” one participant said. “But after taking on so much student debt, I realized it just wasn’t the right time to take on more debt.”
• Many organizations — from government agencies, to chambers of commerce, to business schools — often lack a strategic plan to support entrepreneurship that is both informed by business owners and effectively advertised to businesses.
• Traditional organizations designed to support entrepreneurs failed to understand mission-driven businesses.
• A strong and diverse entrepreneurial community was an important factor in where millennial entrepreneurs decided to locate their businesses.
To increase entrepreneurship among millennials, the issue brief recommends expanding access to early and fast capital, creating tools to navigate entrepreneurship’s legal and regulatory framework, developing mentorship communities, and allowing student borrowers to refinance their loans to a lower interest rate.