A 2016 Kauffman Foundation report showed an increase in the number of millennial entrepreneurs in the last two years, and yet there is widespread concern about millennials being the least entrepreneurial generation in the US, because it seems that entrepreneurship rates for people under 30 have fallen 65 percent since the 1980s.
The reasons for this contradiction are complex and varied. College debt and high healthcare expenses seem to be most to blame. Getting out of college financially trapped, combined with a pessimist vision of the future, is making young americans way more risk averse. And with that mindset, taking the jump to start a new business solo loses against having a salaried, stable job.
Millennial Entrepreneurs in Emerging Markets Are on the Rise
But milleannials in emerging markets are making up for what their US counterparts are falling short of. A report by Deloitte that surveyed 8,000 millennials across 30 countries shows that in emerging markets generation Y not only taking the lead in business creation but reshaping some entrenched trends in entrepreneurship. How so?
To start, millenials are the largest population in emerging economies. It is estimated that almost 90 percent of the global population under 30 lives in emerging markets. In Africa, for example, millennials compose 37 percent of the continent’s population, making it the youngest continent on the planet.
Millennials in emerging markets also value entrepreneurship more. They are more likely to say that “starting their own business” is a sign of success than the same age group in developed nations, with 69 percent of millennials in Southeast Asia and 80 percent in Latin America seeing entrepreneurship as an indication of success.
They are more optimistic about the future: emerging-market millennials expect to be better off financially (71 percent) and emotionally (62 percent) than their parents. In developed economies only 36 percent of millennials thought the social and political situations could improve in the short-term future.
Millenials in emerging markets seem to value business as social agents but are less likely to think corporations are doing enough to alleviate social challenges. 76 percent of millennials think of business as a positive force in the world, but the majority believes that the private sector needs to do more to alleviate poverty, inequality, corruption. Similarly, 65 percent of millennials in emerging markets don’t think their employers are meeting their needs.
Millenials in emerging markets may be challenging gender inequality in entrepreneurship. Overall, 90 percent of all venture capital goes to white males, and on average, women start their businesses with 50 percent less capital than men. But this, too, is being challenged in some emerging markets. Six emerging markets economies— Vietnam, Philippines, Thailand, Malaysia, Peru and Indonesia— show equal or higher entrepreneurship rates for women than men.
Contributed by Stefanía Doebbel.