Presented by T-REX
Understanding the Importance of Millennials in Driving Economic Growth
By Patty Hagen, executive director of T-REX.
The way we work is changing, due in large part to a momentous generational change. The millennial generation is now the largest sector of the U.S. workforce: one in three workers in the U.S. is a member of the millennial generation, according to the Pew Research Center.
Millennials now also outnumber Baby Boomers as the nation’s largest living population. This generation’s beliefs and challenges are shaping the nation’s approach to work now and will continue to do so in the foreseeable future.
Who Are They?
Millennials are more likely to live in metropolitan areas, more likely to have high student debt from their college experience, more likely to be from a minority population (43% of millennials are from growing minority populations), and less likely to be married than previous generations’ at their age.
The millennial generation is more highly educated than previous generations, but at the same time, more likely to be underemployed or unemployed than previous generations at their age.
They are more liberal-leaning in their political views, and more likely to say that they want their work to make a difference in the world. They are also more inclined to question institutions, but are more likely to believe that government should do more to help people.
They believe in gender equity, living a life that includes diversity, putting family first, and feel that being a good parent is the most important priority one should have in life. They want flexibility in their work schedule, and eschew irrelevant institutions while valuing “authenticity.”
These social/cultural shifts are impacting how we structure our work lives and how we encourage entrepreneurship in our nation, which is one of the most important ways to ensure communities’ economic health over the long run.
At the same time as the millennial generation has impacted the way we work. We are experiencing a dearth of entrepreneurship in our country.
Surprisingly, although the startup world lately has commanded significant media attention, startup activity has actually declined nationally since the 1970’s; new firms as a share of total firms have decreased from 15% in 1977 to 8% today, according to Jim Bullard, President of the St. Louis Federal Reserve.
The share of employment in small firms has also declined since 1977, across all industry sectors. This is especially meaningful as small businesses are seen as the creators of new jobs and the drivers of employment for our region and our country.
Their Economic Impact
What do these trends and social/cultural shifts mean for the way we design our work and our strategies for economic growth?
Some of these changes are easy to see: We are experiencing the proliferation of creative office design, short term office leases and co-working spaces across industries and regions, as well as increases in flexibility in work schedules, work attire and human resource policies at both large and small companies.
Interesting ideas about where we work are being explored and modeled. Working from home, working from co-working space, leasing short term space for specific projects, and dissolving office walls and bureaucracy are all examples of trends we see daily in the innovation ecosystem.
Many of these ideas and trends are refreshing and useful. Just because you have a ping pong table in your building doesn’t mean that people aren’t working hard.
But at the same time, the national decline in startup activity is a critical problem for economic growth in our country and in our region. We now look to the millennial generation to be the source of most startup activity—most entrepreneurs start their businesses in their thirties and forties—the age at which the millennial generation is now arriving.
So it behooves us to pay careful attention to the desires and challenges of this generation if we want to ensure economic growth for our region and our country.
What’s Holding Them Back?
For example, is high student debt driving millennials toward more traditional employment in large corporations as opposed to exploring entrepreneurship as their loans come due?
Do we have enough support mechanisms in place and capital funding available to help support entrepreneurs in their journeys? Do we have enough affordable and flexibly leasable urban housing available for young entrepreneurs saddled with student debt?
Are our universities exploring short term study programs to plug into entrepreneurs’ needs to learn a skill or area quickly in their entrepreneurial journeys? Are wealthy individuals in our community exploring investments in venture capital funds that largely support regionally-based companies?
Last June, St. Louis Federal Reserve President Jim Bullard said that it was “critical” to help fight the trend toward less business startups in the U.S.
He said that every U.S. city needs to develop and foster an entrepreneurial culture to drive innovation and growth across the nation. He said that one can “never be sure where the next great idea will take root.”
For the sake of our region’s economic health, it is important to keep building momentum and forward movement in the entrepreneurial ecosystem here in St. Louis. Our city was built on the efforts of great entrepreneurs.
We can grow and thrive as a community by uplifting innovative ideas and hardworking entrepreneurs to help build the next future of St. Louis, and we can leverage the millennial desire to do work that matters for the community at the same time. It is a time of opportunity for St. Louis, and it is critical we make the most of it if we care about the future of our city.