Demographics Are Driving Entrpreneurship

Suppose you have been led to believe that your ailment will get much worse in the future. But what if instead, things start to improve. How would you feel? You’d probably be pretty excited. Exactly the same sort of excitement is occurring in the UK economy. Debunking the gloomy forecast, things are on an upward swing. There is a small amount of growth and inflation is almost non-existant. Jobs, wages and disposable income have increased (even if only slightly), inflation has gone down and most importantly, there has been a surge in entrepreneurship.
Last year, 581,000 new start-up companies were registered with Companies House (as compared to 526,000 in 2013 and 484,000 in 2012). Experts are optimistic that we will see further strengthening of this trend and that by the 2020s entrepreneurship will be at a peak.
More and more people are setting up business for themselves. Why is this happening? Some argue that it is people who were laid off during the last recession who are actually starting their own enterprises. But the rate of emergence of new startups outweighs the rate of recent layoffs. The ease of starting internet companies could be another reason for this surge in entrepreneurship.
But the most plausible reason is demographics. The young and driven millennial generation (those finishing their education today) are finding it more difficult to land jobs. There are fewer opportunities. So they set up their own enterprise. Perhaps, it could be argued, that it is easier for them because they are more agile, tech-savvy and adept in marketing than previous generations. But, are they going to become the main drivers of the entrepreneurial economy in future?
Kauffman Foundation in the US says that the peak age for entrepreneurs to set up on their own is 40, not the late 20s or early 30s. The oldest people in the millennial generation (born between 1978 to 1992) is going to hit that age in the next decade and this potentially bodes well for the future, given their strong propensity for entrepreneurship.
The baby boomers (born between 1950s and 1960s) are venturing into entrepreneurship as their second career. And as a second career, often their ventures are lasting the course, given their wealth of experience and high optimism. They are more likely to succeed in their first try than the millennials. They are also contributing to the entrepreneurial trend.
Although immigration is a controversial issue, immigrants add value to the entrepreneurial economy. They have a hunger to succeed and are frequently risk-takers (as proven by the fact that they emigrated away from their homes). In the US, 40% of the Fortune 500 companies were started by immigrants and in the United Kingdom, one in every seven companies is owned by an immigrant.
In UK millennials, baby boomers and immigrants combined together will fuel an upsurge in entrepreneurship by the 2020s. Outside the UK, the BRICS (Brazil, Russia, India and China) are also on the verge of an entrepreneurial revolution. India and China, particularly, buoyed up by large numbers of millennials who have few other opportunities, are ready to make rapid strides.
So, this can be a time of great excitement; innovation and creation; the managed economies of 1970s-2000s are giving way to entrepreneurial economies. Opportunities abound. This is a trend to watch, let’s hope it plays out well.

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