After the great fall, there would be a wave of rebuilding. The same thing goes to the entrepreneurial spirit after The Great Recession. During The Great Recession, the U.S. economy has eliminated more than 8 million jobs which is the steepest decline since the end of World War II. It has caused many businesses to close for good or file for bankruptcy, on the other hand, the emerging number of unemployment triggered a significant increase in entrepreneurship.
The high amount of global unemployment leads more youth to believe that a possible solution to their careers is a startup business. A group of people who are born between the 1980s to the 1990s, which usually labeled as Generation Y or millennials, is suggested as the most entrepreneurial generation compared to the rest. The rough background has made the millennials’ mindset more aware of the global economic risks, therefore, the crisis shock to the workforce fueled a surge in entrepreneurship. As an example, back in 1995 the majority of tech startups are exclusively originated in the startup ecosystems like Silicon Valley and Boston, however, today tech startup ecosystems are emerging all over the world. According to a survey, one in five of the millennials wishes to quit their day job and starts running their own business.
Until today, the millennials are still witnessing the massive impact of The Great Recession such as years of slow economic growth, companies are extra selectively hiring new employees, massive termination of employment, technology replaces several types of employees, and unpaid internships are taking over part of the job market which makes companies need less of any entry level positions. Employment among the millennials has had the hardest hit because of the economic fluctuation. Based on a survey, there had been an increase in the lack of interest of jobs their parents had. There is 32% of the current self-employed millennials who run a startup business with 9% of them failed to continue the startup in the U.S. In Canada, the number of millennial entrepreneurs is outgrowing a number of unsuccessful companies as the result of the global startup wave.
The millennials’ startups have also a lot of things to offer and benefit developed nations. Along with the massive wave of entrepreneurial spirit, the governments around the world are begun to adjust themselves. The Chinese government is facilitating its people in public innovation encouragement by implementing preferential tax into the economy, which has cut US$46 billion in tax costs, as well as financial and investment policies. The Indian government has also allowed the new startups free from income tax, capital gains tax, and profit tax for the first three years to give them a real chance to grow a business. Both China and India are fully aware of the fact that they cannot employ all of the millennials on their countries due to the demographic factor, as a result, they are encouraging the millennials to seek interests in entrepreneurship.
To conclude, since millennials are dominating the early stage entrepreneurial activity, this might reveal the ambition of young people especially those who have accumulated some experience, networks, and other valuable resources in running a startup. On the other hand, low entrepreneurship rates among younger generation might be caused by high college attendance while the older generation is held back because of household savings, or limited income sources such as pensions. As the founder of Enterprise Nation said, the high participation of millennials in entrepreneurial activity shows that they are no longer relying their dream careers on finding the perfect job, instead they are taking it into their own hands and creating a business around a skill, a passion, or a hobby.
Rise of the Fearless Millennial Entrepreneurs
Report: U.S. Entrepreneurship Bounces Back From Recession; Youth Entrepreneurship Sizzles
Global Startup Ecosystem Ranking 2015
How the Great Recession Spurred Entrepreneurship
Generation Y am I here? Half of 25-34-year-olds dream of leaving their day job
More young entrepreneurs launch start-ups in wake of recession