In reading Robert Samuelson’s column this morning, this snippet jumped out at me:
“Younger people . . . tend to be more innovative, more willing to take risks, more willing to do things differently,” Stanford University economist Paul Romer says in an interview for the book “From Poverty to Prosperity” by Arnold Kling and Nick Schulz. As noted, today’s turmoil could make even the young more risk-averse. Or older and middle-aged people could increasingly dominate corporate hierarchies and university research grants, as Romer worries. An aging society could become a stand-pat society, protective of the status quo and resistant to change.
Is that true? Does it stand up to cross-cultural scrutiny? Is it anecdotal?
As I calculate things Arnold Kling is in his late 50’s and Nick Schulz his early forties. That would make both of them Baby Boomers with Schulz possibly a Gen-Xer. The popular mythology of the Baby Boomers is that young people are energetic, self-starting risk-takers but I wonder if that’s just true of the Baby Boomers?
As a rule young people don’t start businesses. People in early middle age do. The average age of an entrepeneur is 37.5.
As I look around at the children of my contemporaries, I don’t see many self-starters. Their parents programmed them so heavily as kids that they haven’t cultivated the ability to organize and start things on their own. They may not be very good at taking direction but they’re absolutely horrible at giving it.
What do young people think of as the model of a good life? I’m asking because I genuinely don’t know. If it’s working hard and building things up, then Samuelson might be right. However, if it’s working just hard enough to make enough money that you can spend more time doing the things you really enjoy which may well be partying, updating their Facebook pages, or playing video games, don’t expect a lot of entrepeneurship.
Just anecdotally from hiring young clerical workers, I’ve found evidence that their ambitions can run towards the bureaucratic — a desire for job titles, clear designation of areas of responsibility, patterns of advancement. These don’t really fit the model for working for a small business, so they won’t get hired by me.
And I don’t confuse working for a small business with entrentrepeneurship, but working in a smaller, less formal setting does give one a chance to see how the business works and people have left here and gone into business for themselves.
I don’t think it’s even true of the baby boomers. The boomers, as a generation, are all too happy to push risk off to future generations in exchange for benefit today. That’s not beneficial risk-taking IMO.
I’m a Gen-X-er (I’m 41) with two young children (6 & 5) and third on the way. As far as kids go, I think mine are about average. I do think it’s interesting to talk about parenting with my peers and the Gen-Y generation who have kids the same age as mine. It’s surprising that so many have apparrently not given much thought to this topic and my perception is that some view kids as a lifestyle choice.
My perceptions may be warped by my own experience. Among my friends in high school, college, and thereafter, all that was necessary was for a need to be seen. They’d organize, divide responsibilities, work to accomplish the task, and complete it.
My high school days were nearly 50 years ago. My observation is that my contemporaries were more likely to organize and work that way than those who came after them.
Additionally, for the ten years or so after I got out of graduate school I worked anything from 60 to 80 hour weeks (I was salaried). It was what was needed to get the job done.
When I worked in Europe I was astounded to find what clockwatchers everybody was. They were there on time and left on time. Indeed, bells rang just like when you were in school. After the bell if you looked around you’d find mostly Americans, Brits, Aussies. We were working to finish the job; the Germans were working for the required time.
Interesting comments. I guess I have only one point, and its anecdotal. Of all the businesses I’ve been affiliated with in the PE world, only one was founded by really young people. They were seniors in high school. In all the others, the founder’s (or inheritors) cut their teeth for awhile.
Perhaps only the dotcom phenomenon was so young person oriented.
It’s worth noting that college-educated young people have a strong disincentive towards entrepreneurship, which is student loans. Carrying significant school debt puts a serious damper on one’s ability to be a self-starter.
For instance, a friend of mine is a teacher in her 20s with over $50,000 in student loans. She’d love to start a small business as a caterer, which is where her heart truly lies, but finds the risk/reward prospects too poor until she’s paid off the debt. Which will probably take until her mid-30’s.
I do think you’re more likely to find entrepreneurship among young people who don’t have a college degree for this reason.
Speaking up for the younger generation, may I say that my 12 year-old could be earning a full-time living right now — if he didn’t have middle school wasting his time. We use him to build websites (http://thefayz.com being one he did when he was 11) and do our Keynote presentations and edit video. (http://www.youtube.com/watch?v=pCcHiX_lcpY) I just hired him to build a teaser web app, and with his own money he buys software guides — Cocoa and Objective C being the current fixations. Now he’s started getting gigs outside the family.
Definitely a self-starter. A temperamental pain in the ass but a self-starter. Now he’s being actively stymied by his school which piles on brain-dead homework and eats up hours of time when he could be actually learning.
I think you may be proving my point, Michael. Family culture probably has something to do with entrepeneurship. In every generation since my great-grandfather, Joe Schuler, the male Schulers have started businesses.
I think you’re right about family culture, Dave. It reminds me of a point you made a while ago about the ability of those living in poverty to imagine becoming accountants, much less actually pursuing that goal.
My family is pretty diverse. My father was in business all his life beginning with a paper route in the 1930’s. After WWII he owned a construction business and a lumber yard. My oldest brother took over that business. My other brother began as a musician and is now a businessman in Germany. My sister, sadly, lacks initiative to do much of anything. For myself, I’ve never been interested in running my own business. I tried once and found that I’m much more of a Wozniak than a Jobs.
Having thought about it a bit between phone calls, and having read MR’s comment about his son………in a blinding flash of the obvious it occurs to me that capital requirements are probably more powerful than generational issues.
The computer has opened up entrepreneurial venues previously unavailable. You simply need the device, brains, drive and creativity. (MR’s son seems well on his way.) But you don’t need a ton of capital, or organizational skills.
But think about other venues: Even the modest catering business referenced earlier (if it were to be a serious business) requires leased space, commercial grade kitchen equipment, advertising etc. That’s a reasonably substantial investment for a young person. And God forbid you want to open a capital intensive business like, say, a plastic injection molder. Not to mention the group skills required for running an office, running a salesforce, the plant workers etc, as opposed to sitting at a computer and producing on your own.
The computer and the internet provide a new paradigm for the entrepreneur.
For sure, the proverbial “manufacturing start up in the garage” still exists, but fairly rarely, and probably not by the young.
We subsidized the kid with resources in the form of computers, web access, books, etc…. (Capital.) And then we went full-on libertarian and let him do whatever he wanted — unfettered access to the web and no real time limits. Not sure what economic model that would be.
Not sure I’d call it a subsidy….that usually entails government….maybe a grant?
Several kids in my son’s high school have started their own business. A lot of my nurses have kids and friends in their 20s starting little businesses. All anecdotal, but it is still out there. It seems to need to occur before they have kids.
Steve
Steve V:
If he ends up covering his college tuition I’ll call it an investment.