Earlier this month, I went to watch my best friend pitch her non-profit startup at Harvard’s 2018 President’s Innovation Challenge. Of the fifteen competition finalists, only two teams were entirely composed of undergraduates. This surprised me — at a top school with no shortage of young talent, where entrepreneurs have access to a vast array of resources and a strong alumni network, where were the hungry twenty-somethings living out their Zuckerberg dorm-room dreams?
Researchers from MIT and Northwestern compiled data on startup founders using information from the U.S. Census Bureau and the Internal Revenue Service. They found that the average age of an entrepreneur (defined in this study as one who has started a business and hired at least one employee, and has an ambition to grow their business) is 42 years old. This fact seems completely counter to the popular perception of millennials as a self-driven generation that would rather work for themselves than Corporate America.
There is an intriguing gap between the millennial perception of entrepreneurship and the number of millennials actually starting their own ventures. A nationwide survey by EY found that 62 percent of millennials “have considered starting their own business,” yet only around 2 percent of millennials as of 2014 were actually self-employed, according to the US Small Business Administration. So what gives?
For many millennials, our financial situation is already precarious. We make less money and have significantly higher levels of student debt than previous generations. The student debt piece in particular is interesting, as it seems to be a direct roadblock for many young entrepreneurs who otherwise would have pursued their own ventures. Meanwhile, the number of entrepreneurship classes on college campuses has increased by a factor of 20 since 1985. One can’t help but wonder whether universities are structurally beneficial to motivated entrepreneurs, or whether they tend to dampen the very spark of entrepreneurship they seek to foster.
Why are we more willing to take on a huge debt to get a degree? Is it motivated by the pressure to conform to societal norms and expectations, or is it in the pursuit of self-actualization? For young, aspiring entrepreneurs, college can be a valuable way to connect with new people and ideas that could benefit their business. But for others, college classes are a hindrance that they feel they are obliged to complete before they can pursue their real goals, just in case something goes wrong.
That “just in case” mentality can have a huge impact on innovation when running a successful startup requires so much time and energy. Avoiding unnecessary financial risk seems to be one of the biggest factors keeping our generation from implementing big ideas. In 2014, 34 percent of 25–34 year old Americans said they did not start a company due to fear of failure. Perhaps the best thing universities could do to foster innovation among its students is help them ensure stability through emphasizing college affordability and equipping them with the tools they need to make smart financial decisions.