The Entrepreneurial Surge Gains Momentum

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The Entrepreneurial Surge Gains Momentum

America’s small businesses employ more than 50 percent of private sector workers, create three-fourths of new jobs, and account for more than half of the non-farm private Gross Domestic Product. As important to the economy as they are today, U.S. entrepreneurs will make an even greater impact for the rest of this decade.

Why? Three major forces are rapidly converging to make this the dawn of a golden age for entrepreneurs. These forces are:

  • Demographics
  • Attitudes
  • Technologies

Because these powerful forces are so closely intermingled, it is impossible to examine each of them in isolation. Therefore, we’ll discuss all three of them in the context of four important demographic groups that are igniting the entrepreneurial explosion:

  • Baby Boomers
  • Generation Y
  • Women, or so-called “Mompreneurs”
  • Immigrants

As we’ve detailed in previous issues of Trends, as the members of each generation reach certain ages, they engage in behaviors that we can predict with a high degree of certainty, from entering the workforce to buying houses to reaching their peak spending years. Of particular interest for this discussion is the fact that we can predict when the members of a generation are most likely to start their own businesses.

Specifically, according to Kauffman Foundation Index of Entrepreneurial Activity,1 Americans between the ages of 45 and 54 launch more small businesses than the average rate for all adult age groups combined. Even more importantly, the age group of 55 to 64 starts the most small businesses of any age group.

Therefore, Americans aged 45 to 64 are in their prime years for entrepreneurialism. Now consider this fact: The members of the largest generation in history, the Baby Boom generation born between 1946 and 1964, are currently aged 43 to 61. In the next two years, all 78 million Baby Boomers will be within the prime years for entrepreneurship.

This means that, even if the current rates of entrepreneurship do not increase, we will see a massive surge in the number of small business start-ups, solely because of the size of the Baby Boom generation. However, the Trends Editors expect the pace to accelerate even faster, for the following three reasons:

Unlike previous generations, a high percentage of Boomers do not have the option of remaining in their secure corporate jobs. After years of outsourcing and decades of downsizing, many Boomers are being forced back into the job market...

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