The dearth of millennial entrepreneurship has negative long-term effects, but the problem might not be as drastic as headlines make it appear.
The generational divide, and the financial pressure from entitlements, force millennials to be super productive to pay for the baby boomers and improve their own living standards, as Steve Tobak writes in Fox Business.
If we don’t start treating [m]illennials – the largest demographic in our nation’s history – as individuals and hold them accountable for becoming productive members of society, how in the world are we going to increase productivity, return to robust growth, pay down our national debt, and fit the bill for all those entitlements?
Millennials have developed a reputation as entrepreneurs. Given that they’ve grown up in an intensely competitive world, especially in higher education, developing skills that make them more self-sufficient is a basic form of economic survival. Competition breeds innovation.
That’s needed because, as much as they’ve earned the label, entrepreneurialism has declined in the United States. New start ups haven’t been enough to prevent the slow down. Some of the blame has landed on government regulations preventing new businesses and innovation, but analysis doesn’t demonstrate that regulation is slowly down the process of business.
Tobak hints that the “gig economy” is doing little, as Uber, Airbnb, and online work aren’t highly productive additions to the economy. It’s a fair point, but those freelancing positions probably aren’t restraining a productivity boom, either.
It could be the case that productivity is climbing, but the economic data hasn’t figured it out yet. As technology improves and robotic automation disperses through the economy, economic models aren’t sophisticated enough to notice the unseen effects of change, according to Bloomberg.
Tyler Cowen, an economist at George Mason University, has a more pessimistic theory. American innovation has gobbled up the low-hanging fruit that spurred productivity gains, and future improvement will be more difficult and slower. Marginal improvement is more difficult in 2016 than 1966. The Great Stagnation, as he calls it, is upon us. Millennials have the bad luck to reach the age of maturity as economic growth slows and financial pressure from the retirement of the baby boomers makes innovation even more crucial.
The entrepreneurial spirit might not remain within milliennials, anyway. New entrpreneurs tend to be immigrants. For America to boom economically, improving the immigration system and expanding how many people legally enter could drive economic growth.
Or, entrepreneurial decline could be cyclical. Millennials could hit their innovative streak when they’re older. Successful entrepreneurs tend to be 40 years old, in the workforce and developing skills and professional networks. For the resurgence of the entrepreneur, waiting it out might be the only public policy necessary.
Tobak’s concern for millennials shouldn’t be disregarded. He respects them enough to expect people to treat them as unique individuals, and realizes that their economic futures will determine the American economy. For now, developing skills and gaining experience, and figuring out the best ways for millennials to do so, would be important issues to debate and determine.
