Dr Jeff Cornwall

The last great period when entrepreneurs transformed the American economy was in the late 1800s. In fact, most of the 1997 Fortune 200 were already among the largest corporations by 1917 and almost all of these companies started as entrepreneurial ventures. These businesses helped to shape the American economy, society and culture for the next century.
The 1970s was the beginning of the end of this economic era. The large corporations formed in the last great entrepreneurial era in America were no longer creating new jobs in significant numbers. Total employment by the Fortune 500 companies has dropped from 20% of US workforce in 1980, to about 7% in the late 1990s. In fact, the Fortune 500 has actually lost over 5 million jobs during the past 20 years.
Over the past decade or so, the emergence of a new entrepreneurial economy in America has begun. There has been significant growth in entrepreneurial start-ups and small businesses now are the engine of this economy. The number of small businesses has grown steadily: 4.5 million small businesses in 1955, to 18 million by the late 1980s, to 23 million today. New business formation has grown from about 200,000 per year in mid 1900s to over 3.5 million per year in the early twenty-first century.
Here are some other facts about today’s small businesses:
– Survival rates are now over 50%; with education and training this increases to 80-90%
– They make up 50% of GDP
– 5-6 million small business have employees
– 99% of employers are small businesses
– Over 50% of workforce now is employed in small businesses
– 45% of total payroll comes from small businesses
These businesses have become the engines of job creation for the US. In fact, entrepreneurs and small business owners are responsible for 77% of new jobs created in past twenty years.
The emerging entrepreneurial economy is going to succeed or fail in large part as a result of the efforts of my children’s generation. This generation has many names. They are known as Generation Y, the Echo Boomers, and the Millennials. They are also known more and more as the Entrepreneurial or “E” Generation. They are the children of the Baby Boomers and were born between 1977 and 2002.
Stephanie Armour wrote a story profiling this generation that was picked up around the country in the past couple of days. She cites studies of this generation that gives some insight into how they think and what values they hold:
– They are more financially savvy than most previous generations, especially for their young age. 37% already are thinking and planning for retirement. I see this in the students I work with. They are not just looking at an entrepreneurial career as a way of making an income. Nor do they take a short-term view in their business plans. They are thinking about how to build value and wealth in their businesses over many years to come.
– Work-life balance really matters to them. They have seen my generation, the Baby Boomers, get so much wrong. We have tended to be a materialistic generation, measuring success in life in terms of the square footage of our homes. We Boomers have not been very good at building families, subjecting the E Generation to record divorce rates. It is sobering to hear my students talk about how they will not make the same mistakes. They plan their businesses first around family, and second around income and wealth.
– They are likely to be serial entrepreneurs, starting many businesses over their careers.
– They are creative and imaginative. They can see opportunity everywhere.
So what kind of society and culture will this generation build for America? They tend to be very distrustful of government and of large corporations, to the point that I would say they have a very strong liberitarian streak. They have strong values, which for many are based on a very strong faith. They believe that they can build a better economy and help restore our culture.
Let’s hope we give them a chance. My generation, the Baby Boomers, has taken America on a drift toward larger and larger government, with more and more socialistic characteristics. We have come to believe that government is the answer no matter what the question.
For the E Generation to have its chance, we need to get government out of the way. We need to get it out of the way of the economy, as this has been proven the world around to be a key for entrepreneurial growth. And we need to get the government out of the way of culture. This generation has a strong sense of values that can help restore our culture. As my students like to say, they are ready to “take it back” from the large corporations and government that have tried to strip morality out of our culture.