8 ms·

Very interesting chart in this article that shows more educated people (masters, bachelor's, some college) are less entrepreneurial than they were 25 years ago.

Very interesting chart in this article that shows more educated people (masters, bachelor's, some college) are less entrepreneurial than they were 25 years ago. On the flip side, less educated folks (high school graduates and non-high school graduates) have seen an increase in entrepreneurship. "In 1992, 4% of 25-54 year olds with a master’s degree or PhD owned a small company with at least 10 employees. In 2017, this was true of only 2.2%." Could it be that the cost barrier is lower today than in the past, but there is much more money to be made as an educated employee today than 25 years ago?

rb808 8y ago
A big difference is that modern kids are conditioned to do what they're told, work hard and choose a safe path in life. To get into a good school now you have to spend your time studying hard to pass the standardized tests. Previously kids playing around, got bored, chasing girls/boys, leaving home as soon as possible, maybe joined the army, married young. So a 25 year old already had a lot of life experience. Able to take the responsibility to follow dreams and start up a new firm. Today's kids at 25 are just leaving school and still dont really know much about the real world. Great candidates to get a safe job in a company, not so great at starting a firm.
- c12 8y ago
  I honestly think you have hit the nail on the head with this. It is an unfortunate consequence of a modern education system that is set up to produce worker bees.
  - hnisgroupthink 8y ago
    They aren't bees. They are indentured servants ripped from their communities to make money for oligarchs.
- rmshea 8y ago
  I can attest to this. I'm currently working my way through the college application pipeline, and my peers are laser focused on what it takes to get into a good college. Rather than pursuing what interests them, many choose challenging courses just to have a favorable transcript, and standardized test stress is an epidemic. Anxiety about "getting in" to a good school supersedes any dreams of starting a venture or pursuing an option that isn't a 4-year prestigious university. The disappearance of new ventures can be attributed in some way to this new way of thinking. I've been told that college anxiety didn't exist 20 years ago -- maybe it's time to go back to those days. High school, in my mind, is a time to experiment and find what actually interests you: not to manifest into a homework bot that's dominated by stress. This isn't always the case, though. The 25-year-old with life experience and a past of experimentation still exists, it's just not the norm anymore.
  - varrock 8y ago
    I've done some serious reflecting on exactly what you've said. I'm on that "safe" route. I went through the college anxiety, the GPA worries -- all of that was my mantra. To this day, I still admit to being a "resume" builder. I want things on a paper for a sense of achievement. This scares me, though. I'm starting to realize that is not what it's about. It's about making a difference. Sure, you can indeed make a difference doing what you and I have described. A company needs people like that. But I always wonder, could I have made an even bigger difference doing something else? I'm not even talking about my education. I've even thought about this for sports. For instance, I grew up playing baseball religiously because I had already invested a lot of my time with it. I didn't want to adhere to anything else for the fear of wasting my time. Here I am, years later, realizing I would've been an even better tennis player had I actually been open to trying something that would've given me more success, but potentially been less safe (starting a new sport in the middle of being so devoted to one already). Here I am, hitting with racquet on every volley, wishing that I had bought into the sport earlier because I know I could've been better at it than I was baseball.
    - orbifold 8y ago
      What matters in addition to grades is personality and people you know. Things stay anonymous in university during undergrad for the most part, but if you are really good professors will start to notice you and then you get invited to join seminars, do internships etc. Especially in intellectually very competitive fields like math and physics everyone recognizes that tests do not really matter, they are nescessarily trivial or test only a small subset of skills you need to do research.
    - pteredactyl 8y ago
      I hear you. I believe it's most rewarding, in general, to create your own path. You will fail. Embarrass yourself. 'Let down' family and friends. But you'll know those that really care about you. And you'll find out what you're made of. Oh, and have some good stories along the way. “The best time to plant a tree was 20 years ago. The second best time is now.”
  - e40 8y ago
- moorhosj 8y ago
  This is an excellent point at the lower end of this age range. I do still think there is something in the fact that today's tech companies have very high profit-per-employee numbers. This allows them to pay higher skilled workers more money and those people become less likely to leave and start something on their own (a financially risky choice). It's possible that golden handcuffs (equity, etc.) are pushing this number down as well.
- bontaq 8y ago
  Yes, it is probably, "modern kids," who are conditioned to do what they're told. I think you've solved it. Also, they're immature and haven't even lived in the real world until at least 28.
  - heurist 8y ago
    Is this sarcasm? Plenty of "kids" deal with reality long before 28.
    - addicted 8y ago
      I’m pretty sure it’s sarcasm lampooning the “Kids these days” trope used in the post being replied to.
    - rabidrat 8y ago
      Yes but they don't have enough life experience to be an elected representative.
- s73v3r_ 8y ago
  No. I think it's more that the mythos of the startup has been busted. Most of us probably know someone (or had it happen to them) that joined a startup, and got completely fucked on equity while getting paid peanuts and being worked 80-90 hours a week. Why would they want to go work for a startup, or give most of their startup to VCs, when they can work in a much lower stress environment for far more money, and actually get to go home at the end of the day?
  - toomuchtodo 8y ago
    Exactly.
- LyndsySimon 8y ago
  I have no idea if the data support this, but it intuitively rings true for me. My background - I failed out of college in 2003 due to clinical depression, and spent a few years getting my life together and learning how to function. I'd met my wife at 14 years old and we've been together since, which has been a huge factor in my life. Both she and I describe ourselves as "hustlers" - meaning that we pretty much always have at least one side hustle going on to generate income, and usually have several. It as 2007 before I was really able to function as an adult and got a "real job" with an actual career path. By that time I'd been: an electrician, a photographer, a photo technician, an assistant on a dairy farm, a web designer, a PC technician, and a retail clerk. My wife had been a hair and makeup artist, a dance teacher, a graphic designer, a videographer... you get the idea. A couple of years ago my wife was doing volunteer work as a member of our local Junior League, and the discussion turned toward career plans. Her peers in her age group (late 20s/early 30s) were in many cases either just graduating school after having achieved an advanced degree or were "paying their dues" working their first real jobs. Most of them were single and many had never had a serious relationship. That struck her as very odd - by 30, we had gone through a number of milestones for which her peers felt they still weren't prepared: careers, marriage, children, moving across the country, etc. By and large, they seemed to feel like they were finally wrapping up their education and "young adulthood", and were about to embark on their life. I figure a lot of this was because of our backgrounds - my wife and I grew up in a poor area in Arkansas where it was extremely common to be married with children by twenty, and at the time we were living in central Virginia where the median family income was over 300% higher than where we grew up. I do wonder though how much of it is simply generational. It seems like a lot of people I know in their twenties not only aren't yet fully responsible for themselves (financially and socially), but don't feel like they are expected to be yet. That's completely foreign to me, but it appears to be a common perspective.
  - TimJYoung 8y ago
    Similar situation with my wife and I: I was working in IT directly out of high school (late 80s), and met my wife at the same company. Fast-forward a bit, and I'm married with my first kid at age 22, we started our first company when I was 26, and then started our current company when I was 28 (by then we had two kids and a new house). I see "kids" today that are 30-32 and just getting married, getting a house, and say "what took you so long ?". :-) Edit: downvoters, it's a joke, okay ? I have many close friends that are in that situation (I'm not that old), and I understand the forces that are conspiring against people to prevent them from "starting" their lives earlier.
- sidr 8y ago
  I strongly disagree with this idea. And the romanticizing of of the "maybe joined the army, married young" path. For one, the world is a little different now than when this path was normal - things are mass produced and menial jobs are outsourced to third-world countries, work that doesn't require specialized training is being automated. You can't open a mom and pop retail store around the corner and expect to survive in the age of Amazon and Walmart. It's also more expensive than ever to start a business - healthcare costs are through the roof, and big businesses have managed to finagle tax breaks that you won't get. Also since OPs comment was referring to the businesses started by those with master's degrees and higher, factor in student loans which have skyrocketed (increasing the risk you're taking on). Also, factor in housing costs in cities, which is where you need to be if you want to start something niche and technical. The fact is economic incentives are set up so that it's just way way more beneficial for a 25 year old to join a big company than to start their own (and definitely more so than joining someone else's startup...which makes hiring for startups harder - and round and round it goes). You can reply with polemics about the joys of working for yourself etc., but clearly there must be a point where the financial beating you take from doing so makes it not worth it. To me, this data indicates that we have reached that point.
  - pteredactyl 8y ago
    You can be a 'mom and pop' store and survive. Just don't plan on selling cheap shit from China. Your other points. Yes.
- awinder 8y ago
  I thought we had been dogging millenials for ages for bring dynamism to the workplace through not wanting to do what they are told? These kids can not do right, no matter what. I would love to mount the Mr. Holland’s Opus defense here. Maybe the problem is not that kids are rule-followers / lemmings, but maybe through removing free time, attacking the arts, etc., we have raised one of the smartest generations without giving them opportunities to become impassioned about what they could make in this world.
zby 8y ago
I don't know how it is in the US - but here in Poland there are companies forcing janitors to open their sole proprietorship to optimize taxes.
- cbluth 8y ago
  Can you elaborate? I am genuinely interested in the backstory and/or more detail and the scenario.
  - Muromec 8y ago
    It's same in Ukraine, I'd even say tax rate differences are less ridiculous in Poland. In Ukraine personal income is taxed at flat 20% and another 22% of income goes to social security, while sole proprietorship income is taxed at 5% plus 22% of minimal monthly wage (which is something around 150 USD. yes, monthly) to social security. Everybody from IT people to supermarket chains and restaurants abuse this. Also, since you don't hire people, but contract some other company it's de-facto at-will employment in country with Soviet-era Labor Code still in place.
- HillaryBriss 8y ago
  that does sound like US companies that contract out their cleaning services to an independent company. here the motives are a bit different (reduce employee headcount and thereby eliminate unemployment insurance and benefit costs and reduce other liabilities. possible other advantages depending upon workforce eligibility to work legally in the US.)
spamizbad 8y ago
> Could it be that the cost barrier is lower today than in the past, but there is much more money to be made as an educated employee today than 25 years ago? One big confounding factor could be the cost of student debt. You can't tell your student loan company to defer payments until your business gets off the ground. Also, I think in general, enthusiasm for capitalism (and with it, entrepreneurship) is waning.
- Alex3917 8y ago
  > One big confounding factor could be the cost of student debt. Student debt has increased, but not that much. Only a few thousand dollars over the last 25 years.
  - chrisbennet 8y ago
    As of 2016, median student debt increased 163% (adjusted for inflation) over 25 years. https://www.huffingtonpost.com/entry/3-charts-student-debt-crisis_us_56b0e9d0e4b0a1b96203d369 https://www.huffingtonpost.com/entry/3-charts-student-debt-c...
    - Alex3917 8y ago
      Hmm. The collegeboard numbers are significantly different than that: https://trends.collegeboard.org/student-aid/figures-tables/cumulative-debt-bachelor-degree-recipients-four-year-institutions-over-time https://trends.collegeboard.org/student-aid/figures-tables/c... E.g. Collegeboard has the average debt per graduate being $12,300 in 2000-01, whereas your source has it as being $22,500ish the same year. Maybe your numbers are including for-profit colleges? (Which isn't really appropriate, since they were very uncommon in 1990.)
      - mercutio2 8y ago
        Huge numbers of people don’t graduate, and the people who don’t graduate are more likely to struggle to pay down their debts, so they might have higher debt burdens. Also, why in the world would one want to exclude for-profit colleges? Kids get told to go to college, and the least qualified kids go to for-profit colleges. Excluding this group of students seems like cherry picking, and it really doesn’t seem reflective of the national story.
sandworm101 8y ago
Change in demographics. A 25-25yo in 1990 was living in a very different place. The boomers were still working. Now they are retired. Lots of upper middle-class family money that in 1990 might have been used by kids, to do stuff like found companies, is now locked up in retirement planning to maintain the boomers as they age. People today generally don't get access to the family money until their parents die, something that happens long after the kids turn 54. Remember too that this is about people owning a company with 10+ employees before age 54. That is an unusual situation. A large number of those actually owning their company, rather than have outside investors, would have gotten started with family money. Seed money today rarely comes not as outright gifts from mom and dad, but from formal investors who then take a share of the company. Mom and dad today are also more likely to take a large interest in the business than gift money outright.
- randomdata 8y ago
  The youngest boomers are currently 54. Perhaps they are starting to think about retirement now, but what money did they have in 1990 (when they were 26 years old) to invest in a 25 year old?
ForHackernews 8y ago
Do these numbers account for all the high school graduates working for Uber or Taskrabbit being categorized as "independent contractors"? It isn't really "entrepreneurship" but I could easily imagine those people show up as small business owners in the official stats.
- moorhosj 8y ago
  The criteria is "a small company with at least 10 employees." Uber drivers would not count, neither would other independent contractors who run their own design or development businesses.
  - aksss 8y ago
    "examines trends in entrepreneurship—defined here as self-employment with at least 10 employees" "Start-up" is such an abused term. I used to think of it as an endeavor searching for a way to monetize and fund a new idea, but it seems that it is used now to refer to any new entrepreneurial (thank you spell check) endeavor.
pnathan 8y ago
Debt. Debt. Debt.
poulsbohemian 8y ago
>Could it be that the cost barrier is lower today than in the past, but there is much more money to be made as an educated employee today than 25 years ago? This is likely a component. Purely anecdotal, but in connecting with entrepreneurs in Portland, OR vs. Seattle, WA, the contrast is clear. In Seattle there are more high-paying employers (Microsoft, Google, Amazon, Facebook, for example), and thus the startup meet ups have relatively few attendees. Compare to Portland where outside of the significant apparel focus (Nike, Adidas, Columbia) the number of household name brands drops significantly. Yes there are Puppet and NewRelic, but they aren't the scale of Amazon, for example. So, you end up with more people willing to take a risk and strike out on their own as entrepreneurs.
ddebernardy 8y ago
But the sample is US-based. 25 years ago you might get by with a small student loan to complete your education. Nowadays the debt load is pretty much off the charts [1]. IMHO a better study would be to check out what's happening in continental Europe, where higher education is either free or nearly so for all practical intents. As a local, I'd put forward that youngsters are as entrepreneurial as they were a generation ago, if not more. At any rate, I would expect the real issue in the US has more to do with the skyrocketing education costs (and later, mortgage costs) than it does with lack of desire or drive to create a business. [1]: https://411w15.econ.lsa.umich.edu/wp-content/uploads/2015/04/federal-student-loans-outstanding-data_chartbuilder1.png https://411w15.econ.lsa.umich.edu/wp-content/uploads/2015/04...
- TimJYoung 8y ago
  I'll attest to that, at least anecdotally: we sell primarily to small software companies and have a lot of customers in the EU that tend to run the gamut in terms of makeup, whereas in the US almost all of the small companies are being tended to by older developers that started them in the 90s. I've also noticed that in the EU (and other places outside of the US), developers are more likely to use non-mainstream languages and tools and aren't so hung up on the current trends. But, again, this is all anecdotal and subject to my own biases.
  - foepys 8y ago
    > I've also noticed that in the EU (and other places outside of the US), developers are more likely to use non-mainstream languages and tools and aren't so hung up on the current trends. I can confirm that at least for Germany outside of Berlin (Germany's SV). Nobody wants to sit in the office until 10pm because some new trendy language or one of its alpha-grade libraries decided to shit the bed in an edge-case. We rather go home to our families. Companies stick to C#, Java, and sometimes Python. C/C++ for embedded, obviously.
tqi 8y ago
I couldn't find exact numbers, but extrapolating from the one that I did find [1], it seems plausible that the # of PhD/Masters students starting businesses has stayed flat while the actual # of degrees awarded has doubled (US population in that time has only increased by ~30%). To me this indicates that while there are increased barriers to starting a business, the trend is more reflective of a mix shift in the types of people who get higher degrees. [1] https://www.insidehighered.com/news/2014/12/08/number-phds-awarded-climbs-recipients-job-prospects-dropping https://www.insidehighered.com/news/2014/12/08/number-phds-a...
pteredactyl 8y ago
Debt.

rb808 8y ago

A big difference is that modern kids are conditioned to do what they're told, work hard and choose a safe path in life. To get into a good school now you have to spend your time studying hard to pass the standardized tests. Previously kids playing around, got bored, chasing girls/boys, leaving home as soon as possible, maybe joined the army, married young. So a 25 year old already had a lot of life experience. Able to take the responsibility to follow dreams and start up a new firm. Today's kids at 25 are just leaving school and still dont really know much about the real world. Great candidates to get a safe job in a company, not so great at starting a firm.

c12 8y ago
I honestly think you have hit the nail on the head with this. It is an unfortunate consequence of a modern education system that is set up to produce worker bees.
- hnisgroupthink 8y ago
  They aren't bees. They are indentured servants ripped from their communities to make money for oligarchs.
rmshea 8y ago
I can attest to this. I'm currently working my way through the college application pipeline, and my peers are laser focused on what it takes to get into a good college. Rather than pursuing what interests them, many choose challenging courses just to have a favorable transcript, and standardized test stress is an epidemic. Anxiety about "getting in" to a good school supersedes any dreams of starting a venture or pursuing an option that isn't a 4-year prestigious university. The disappearance of new ventures can be attributed in some way to this new way of thinking. I've been told that college anxiety didn't exist 20 years ago -- maybe it's time to go back to those days. High school, in my mind, is a time to experiment and find what actually interests you: not to manifest into a homework bot that's dominated by stress. This isn't always the case, though. The 25-year-old with life experience and a past of experimentation still exists, it's just not the norm anymore.
- varrock 8y ago
  I've done some serious reflecting on exactly what you've said. I'm on that "safe" route. I went through the college anxiety, the GPA worries -- all of that was my mantra. To this day, I still admit to being a "resume" builder. I want things on a paper for a sense of achievement. This scares me, though. I'm starting to realize that is not what it's about. It's about making a difference. Sure, you can indeed make a difference doing what you and I have described. A company needs people like that. But I always wonder, could I have made an even bigger difference doing something else? I'm not even talking about my education. I've even thought about this for sports. For instance, I grew up playing baseball religiously because I had already invested a lot of my time with it. I didn't want to adhere to anything else for the fear of wasting my time. Here I am, years later, realizing I would've been an even better tennis player had I actually been open to trying something that would've given me more success, but potentially been less safe (starting a new sport in the middle of being so devoted to one already). Here I am, hitting with racquet on every volley, wishing that I had bought into the sport earlier because I know I could've been better at it than I was baseball.
  - orbifold 8y ago
    What matters in addition to grades is personality and people you know. Things stay anonymous in university during undergrad for the most part, but if you are really good professors will start to notice you and then you get invited to join seminars, do internships etc. Especially in intellectually very competitive fields like math and physics everyone recognizes that tests do not really matter, they are nescessarily trivial or test only a small subset of skills you need to do research.
  - pteredactyl 8y ago
    I hear you. I believe it's most rewarding, in general, to create your own path. You will fail. Embarrass yourself. 'Let down' family and friends. But you'll know those that really care about you. And you'll find out what you're made of. Oh, and have some good stories along the way. “The best time to plant a tree was 20 years ago. The second best time is now.”
- e40 8y ago
moorhosj 8y ago
This is an excellent point at the lower end of this age range. I do still think there is something in the fact that today's tech companies have very high profit-per-employee numbers. This allows them to pay higher skilled workers more money and those people become less likely to leave and start something on their own (a financially risky choice). It's possible that golden handcuffs (equity, etc.) are pushing this number down as well.
bontaq 8y ago
Yes, it is probably, "modern kids," who are conditioned to do what they're told. I think you've solved it. Also, they're immature and haven't even lived in the real world until at least 28.
- heurist 8y ago
  Is this sarcasm? Plenty of "kids" deal with reality long before 28.
  - addicted 8y ago
    I’m pretty sure it’s sarcasm lampooning the “Kids these days” trope used in the post being replied to.
  - rabidrat 8y ago
    Yes but they don't have enough life experience to be an elected representative.
s73v3r_ 8y ago
No. I think it's more that the mythos of the startup has been busted. Most of us probably know someone (or had it happen to them) that joined a startup, and got completely fucked on equity while getting paid peanuts and being worked 80-90 hours a week. Why would they want to go work for a startup, or give most of their startup to VCs, when they can work in a much lower stress environment for far more money, and actually get to go home at the end of the day?
- toomuchtodo 8y ago
  Exactly.
LyndsySimon 8y ago
I have no idea if the data support this, but it intuitively rings true for me. My background - I failed out of college in 2003 due to clinical depression, and spent a few years getting my life together and learning how to function. I'd met my wife at 14 years old and we've been together since, which has been a huge factor in my life. Both she and I describe ourselves as "hustlers" - meaning that we pretty much always have at least one side hustle going on to generate income, and usually have several. It as 2007 before I was really able to function as an adult and got a "real job" with an actual career path. By that time I'd been: an electrician, a photographer, a photo technician, an assistant on a dairy farm, a web designer, a PC technician, and a retail clerk. My wife had been a hair and makeup artist, a dance teacher, a graphic designer, a videographer... you get the idea. A couple of years ago my wife was doing volunteer work as a member of our local Junior League, and the discussion turned toward career plans. Her peers in her age group (late 20s/early 30s) were in many cases either just graduating school after having achieved an advanced degree or were "paying their dues" working their first real jobs. Most of them were single and many had never had a serious relationship. That struck her as very odd - by 30, we had gone through a number of milestones for which her peers felt they still weren't prepared: careers, marriage, children, moving across the country, etc. By and large, they seemed to feel like they were finally wrapping up their education and "young adulthood", and were about to embark on their life. I figure a lot of this was because of our backgrounds - my wife and I grew up in a poor area in Arkansas where it was extremely common to be married with children by twenty, and at the time we were living in central Virginia where the median family income was over 300% higher than where we grew up. I do wonder though how much of it is simply generational. It seems like a lot of people I know in their twenties not only aren't yet fully responsible for themselves (financially and socially), but don't feel like they are expected to be yet. That's completely foreign to me, but it appears to be a common perspective.
- TimJYoung 8y ago
  Similar situation with my wife and I: I was working in IT directly out of high school (late 80s), and met my wife at the same company. Fast-forward a bit, and I'm married with my first kid at age 22, we started our first company when I was 26, and then started our current company when I was 28 (by then we had two kids and a new house). I see "kids" today that are 30-32 and just getting married, getting a house, and say "what took you so long ?". :-) Edit: downvoters, it's a joke, okay ? I have many close friends that are in that situation (I'm not that old), and I understand the forces that are conspiring against people to prevent them from "starting" their lives earlier.
sidr 8y ago
I strongly disagree with this idea. And the romanticizing of of the "maybe joined the army, married young" path. For one, the world is a little different now than when this path was normal - things are mass produced and menial jobs are outsourced to third-world countries, work that doesn't require specialized training is being automated. You can't open a mom and pop retail store around the corner and expect to survive in the age of Amazon and Walmart. It's also more expensive than ever to start a business - healthcare costs are through the roof, and big businesses have managed to finagle tax breaks that you won't get. Also since OPs comment was referring to the businesses started by those with master's degrees and higher, factor in student loans which have skyrocketed (increasing the risk you're taking on). Also, factor in housing costs in cities, which is where you need to be if you want to start something niche and technical. The fact is economic incentives are set up so that it's just way way more beneficial for a 25 year old to join a big company than to start their own (and definitely more so than joining someone else's startup...which makes hiring for startups harder - and round and round it goes). You can reply with polemics about the joys of working for yourself etc., but clearly there must be a point where the financial beating you take from doing so makes it not worth it. To me, this data indicates that we have reached that point.
- pteredactyl 8y ago
  You can be a 'mom and pop' store and survive. Just don't plan on selling cheap shit from China. Your other points. Yes.
awinder 8y ago
I thought we had been dogging millenials for ages for bring dynamism to the workplace through not wanting to do what they are told? These kids can not do right, no matter what. I would love to mount the Mr. Holland’s Opus defense here. Maybe the problem is not that kids are rule-followers / lemmings, but maybe through removing free time, attacking the arts, etc., we have raised one of the smartest generations without giving them opportunities to become impassioned about what they could make in this world.

zby 8y ago

I don't know how it is in the US - but here in Poland there are companies forcing janitors to open their sole proprietorship to optimize taxes.

cbluth 8y ago
Can you elaborate? I am genuinely interested in the backstory and/or more detail and the scenario.
- Muromec 8y ago
  It's same in Ukraine, I'd even say tax rate differences are less ridiculous in Poland. In Ukraine personal income is taxed at flat 20% and another 22% of income goes to social security, while sole proprietorship income is taxed at 5% plus 22% of minimal monthly wage (which is something around 150 USD. yes, monthly) to social security. Everybody from IT people to supermarket chains and restaurants abuse this. Also, since you don't hire people, but contract some other company it's de-facto at-will employment in country with Soviet-era Labor Code still in place.
HillaryBriss 8y ago
that does sound like US companies that contract out their cleaning services to an independent company. here the motives are a bit different (reduce employee headcount and thereby eliminate unemployment insurance and benefit costs and reduce other liabilities. possible other advantages depending upon workforce eligibility to work legally in the US.)

spamizbad 8y ago

> Could it be that the cost barrier is lower today than in the past, but there is much more money to be made as an educated employee today than 25 years ago? One big confounding factor could be the cost of student debt. You can't tell your student loan company to defer payments until your business gets off the ground. Also, I think in general, enthusiasm for capitalism (and with it, entrepreneurship) is waning.

Alex3917 8y ago
> One big confounding factor could be the cost of student debt. Student debt has increased, but not that much. Only a few thousand dollars over the last 25 years.
- chrisbennet 8y ago
  As of 2016, median student debt increased 163% (adjusted for inflation) over 25 years. https://www.huffingtonpost.com/entry/3-charts-student-debt-crisis_us_56b0e9d0e4b0a1b96203d369 https://www.huffingtonpost.com/entry/3-charts-student-debt-c...
  - Alex3917 8y ago
    Hmm. The collegeboard numbers are significantly different than that: https://trends.collegeboard.org/student-aid/figures-tables/cumulative-debt-bachelor-degree-recipients-four-year-institutions-over-time https://trends.collegeboard.org/student-aid/figures-tables/c... E.g. Collegeboard has the average debt per graduate being $12,300 in 2000-01, whereas your source has it as being $22,500ish the same year. Maybe your numbers are including for-profit colleges? (Which isn't really appropriate, since they were very uncommon in 1990.)
    - mercutio2 8y ago
      Huge numbers of people don’t graduate, and the people who don’t graduate are more likely to struggle to pay down their debts, so they might have higher debt burdens. Also, why in the world would one want to exclude for-profit colleges? Kids get told to go to college, and the least qualified kids go to for-profit colleges. Excluding this group of students seems like cherry picking, and it really doesn’t seem reflective of the national story.

sandworm101 8y ago

Change in demographics. A 25-25yo in 1990 was living in a very different place. The boomers were still working. Now they are retired. Lots of upper middle-class family money that in 1990 might have been used by kids, to do stuff like found companies, is now locked up in retirement planning to maintain the boomers as they age. People today generally don't get access to the family money until their parents die, something that happens long after the kids turn 54. Remember too that this is about people owning a company with 10+ employees before age 54. That is an unusual situation. A large number of those actually owning their company, rather than have outside investors, would have gotten started with family money. Seed money today rarely comes not as outright gifts from mom and dad, but from formal investors who then take a share of the company. Mom and dad today are also more likely to take a large interest in the business than gift money outright.

randomdata 8y ago
The youngest boomers are currently 54. Perhaps they are starting to think about retirement now, but what money did they have in 1990 (when they were 26 years old) to invest in a 25 year old?

ForHackernews 8y ago

Do these numbers account for all the high school graduates working for Uber or Taskrabbit being categorized as "independent contractors"? It isn't really "entrepreneurship" but I could easily imagine those people show up as small business owners in the official stats.

moorhosj 8y ago
The criteria is "a small company with at least 10 employees." Uber drivers would not count, neither would other independent contractors who run their own design or development businesses.
- aksss 8y ago
  "examines trends in entrepreneurship—defined here as self-employment with at least 10 employees" "Start-up" is such an abused term. I used to think of it as an endeavor searching for a way to monetize and fund a new idea, but it seems that it is used now to refer to any new entrepreneurial (thank you spell check) endeavor.

pnathan 8y ago

Debt. Debt. Debt.

poulsbohemian 8y ago

>Could it be that the cost barrier is lower today than in the past, but there is much more money to be made as an educated employee today than 25 years ago? This is likely a component. Purely anecdotal, but in connecting with entrepreneurs in Portland, OR vs. Seattle, WA, the contrast is clear. In Seattle there are more high-paying employers (Microsoft, Google, Amazon, Facebook, for example), and thus the startup meet ups have relatively few attendees. Compare to Portland where outside of the significant apparel focus (Nike, Adidas, Columbia) the number of household name brands drops significantly. Yes there are Puppet and NewRelic, but they aren't the scale of Amazon, for example. So, you end up with more people willing to take a risk and strike out on their own as entrepreneurs.

ddebernardy 8y ago

But the sample is US-based. 25 years ago you might get by with a small student loan to complete your education. Nowadays the debt load is pretty much off the charts [1]. IMHO a better study would be to check out what's happening in continental Europe, where higher education is either free or nearly so for all practical intents. As a local, I'd put forward that youngsters are as entrepreneurial as they were a generation ago, if not more. At any rate, I would expect the real issue in the US has more to do with the skyrocketing education costs (and later, mortgage costs) than it does with lack of desire or drive to create a business. [1]: https://411w15.econ.lsa.umich.edu/wp-content/uploads/2015/04/federal-student-loans-outstanding-data_chartbuilder1.png https://411w15.econ.lsa.umich.edu/wp-content/uploads/2015/04...

TimJYoung 8y ago
I'll attest to that, at least anecdotally: we sell primarily to small software companies and have a lot of customers in the EU that tend to run the gamut in terms of makeup, whereas in the US almost all of the small companies are being tended to by older developers that started them in the 90s. I've also noticed that in the EU (and other places outside of the US), developers are more likely to use non-mainstream languages and tools and aren't so hung up on the current trends. But, again, this is all anecdotal and subject to my own biases.
- foepys 8y ago
  > I've also noticed that in the EU (and other places outside of the US), developers are more likely to use non-mainstream languages and tools and aren't so hung up on the current trends. I can confirm that at least for Germany outside of Berlin (Germany's SV). Nobody wants to sit in the office until 10pm because some new trendy language or one of its alpha-grade libraries decided to shit the bed in an edge-case. We rather go home to our families. Companies stick to C#, Java, and sometimes Python. C/C++ for embedded, obviously.

tqi 8y ago

I couldn't find exact numbers, but extrapolating from the one that I did find [1], it seems plausible that the # of PhD/Masters students starting businesses has stayed flat while the actual # of degrees awarded has doubled (US population in that time has only increased by ~30%). To me this indicates that while there are increased barriers to starting a business, the trend is more reflective of a mix shift in the types of people who get higher degrees. [1] https://www.insidehighered.com/news/2014/12/08/number-phds-awarded-climbs-recipients-job-prospects-dropping https://www.insidehighered.com/news/2014/12/08/number-phds-a...

pteredactyl 8y ago

Debt.