Entrepreneurship long has been viewed as part of the American Dream, part of the DNA of Americans, and embedded in our culture. And U.S. entrepreneurship has been a key competitive advantage in the global economy.
But are things changing – for the worse?
Millions of “Missing” Businesses
Well, there are serious questions, according to various measures of entrepreneurship being in decline in recent years. That was laid out in the August 2016 SBE Council report I wrote titled Gap Analysis #3: Millions of Missing Businesses. As summed up in that study: “According to various measures of entrepreneurship and business activity, the U.S. has suffered, at best, a dramatic decline in entrepreneurship and in the number of businesses over the past near-decade.” The study found that the economy is missing approximately 3.7 million firms and startups based on a combination of the most often cited self-employed and employer firm data.
If entrepreneurship is to remain part of American culture, then our institutions should be reinforcing the critical importance of entrepreneurship to our economy, and making clear that while choosing to start up, build and run a business is not easy, and is in fact risky, the potential rewards are considerable and varied. Obviously, what is being taught and communicated by our educational institutions stand out as essential to the future of entrepreneurship.
The Future of Entrepreneurship
The 2016 Gallup-HOPE Index offers a look at the potential future of entrepreneurship via a survey of 1,006 students in grades five through 12. The survey offered varied findings. For example:
• While in 2011, 45% of students said that they planned to start their own business, that fell slightly to 41% in 2016. While that 41% runs well ahead of the share of Americans who actually own their own businesses, the slight downward trend is not welcome news.
• Most striking was the dramatic decline of nonwhite students saying they want to start their own business, which declined from 54% in 2011 to 42% in 2016. Meanwhile, white students were basically unchanged, i.e., 39% in 2011 and 40% in 2016.
• Another distressing finding is that older students are far less likely to say that they want to start a business. Among those in grades 5-8, 55% said they want to start a business, while only 27% among grades 9-12 students said so.
• Not surprising, it’s clear that children of business owners are more likely to say that they want to start a business as opposed to children of non-business owners, respectively, 52% versus 35%.
• Finally, on a positive note, students from lower-income families were more likely to say that they wanted to start a business – 50% among households with annual income of less than $36,000, 44% with incomes between $36,000 and $90,000, and 35% with incomes over $90,000. This is encouraging given that business ownership is a notable way to climb the economic ladder.
With some glimmers of hope, the general survey findings of American students regarding entrepreneurship is far from encouraging. The culture apparently has changed, including assumed attitudes toward entrepreneurship. That requires a more concerted effort to make clear to students – and people of all ages – the benefits to individuals, families, employees, consumers and the overall economy of robust levels of entrepreneurship.
Originally published on the Small Business and Entrepreneur Council Website.