It certainly feels like millennials (those whippersnappers aged 19 to 35 in 2016) are more entrepreneurial than their parents or grandparents. And they certainly think of themselves that way. In a new survey, 55% of millennials say their generation is more entrepreneurial than any previously.
But, in fact, measured by the rate of new business formation, millennials are actually less entrepreneurial than generation X, or the boomers. Most millennials think staying at one company, as opposed to starting a business, is the best way “to advance your career.” Only 22% of millennials think starting a business is.
Millennials do think entrepreneurship is the best way to advance the economy as a whole, though. “[They] admire entrepreneurs and would seriously consider entrepreneurship for themselves—if only they had the financial means,” says the report from Economic Innovation Group, an economics think tank, and consultants Ernst & Young.
Whether it’s because millennials are averse to starting businesses or are forced out of markets is a bigger question. A lot of commentators think the economy has become less competitive, that is, less open to new entrants. If you look at profits in many industries, they are increasingly going to the biggest companies.
Millennials are also weighed down by debt, particularly student debt. Between 2004 and 2014, there was an 89% increase in the number of student borrowers and a 77% increase in average balances held by students, according to the New York Fed.
College degrees are more expensive, but also more valuable now. People pay the money—since 1985, the cost of college has risen roughly five times faster than a basket of consumer prices—because the penalty for not paying is growing. Without a degree, you see a decreasing share of income. In 1979, workers at a high school grad level earned 77% of college grades. In 2014, it was only 62%.
That makes millennials continue to bite the bullet on student tuition, even if they can also see the debts are crippling. The next generation will have to do a better job of managing costs—perhaps with new types of college degrees—since the growth of college costs is surely unsustainable in the long run.
See more from the report here.