Marc Smith is deputy editor of Families in Business.
Yesterday they were middle-aged, white males born in a place you could find on a map. Tomorrow they are more likely to be under 25, female and hail from anywhere in the world. These are the entrepreneurs of the future and, if you're thinking that your industry isn't going to change much in the next 20 years, they could be your biggest competitors.
A new study by the Institute for the Future has highlighted just how much demographic trends are changing, and just how much more diverse the workforces of the US and other mature economies will become. In particular, "new breed" entrepreneurs will emerge to include those who previously would have been thinking about retirement and "the most entrepreneurial generation ever."
Baby boomers (those born between 1946 and 1964) have been subjected to more corporate downsizing, outsourcing and job loss due to increased competition than other generations. This has resulted in a large pool of workers who have been prematurely pushed out of corporate jobs, despite many having the requisite skills. Pension problems, increased productivity targets and the disintegration of corporate loyalty have all affected those still working for large firms. Consequently, there is an as yet untapped resource of qualified, ready-to-work professionals with years of experience and bulging contact books. The report cites a USA Today/Gallup poll that shows 63% of non-retired adults in the US plan to work in retirement, and many will set up on their own.
At the other end of the scale, Generation Y (those currently aged 5–25) is a self confident, autonomous group with a healthy distrust of governments, large organisations and the elite. Their world is internet-based and information rich, and they are not afraid to take risks or to make mistakes – key traits for entrepreneurs. The report suggests that there is some evidence that points to this generation more aggressively embracing serial entrepreneurship.
Women of all ages see entrepreneurship as a way to circumnavigate the glass ceiling. Despite advances in equality in the workplace – 46% of the US workforce is now made up of women – research suggests that only around 6% of them are top earners. Entrepreneurship therefore offers women with experience and ambition, as well as those looking for a better work–life balance, a realistic way round this problem.
In the same vein, immigrant workers are increasingly using entrepreneurship as a means to steer round the barriers that they face, which often include a lack of "relevant" qualifications, language skills and corporate contacts. Given that most developed economies now actively encourage educated immigrants into their countries, this cohort is realising that starting a business is often easier than finding a job.
Rupert Merson, a partner at BDO Stoy Hayward who advises on family business, believes family businesses are no more or less aware of such trends than they have ever been, given that many had an entrepreneurial beginning themselves. "The question for families today is to what extent they can maintain their entrepreneurial spirit. One advantage is that it's in the genes and often embedded in the culture of the business. However, the father will usually look for someone who is in the image of himself, which can be a mistake as you need someone who will take it to the next stage of evolution."
The report also highlights the growth of entrepreneurship programmes across the world – there are over 1,600 colleges and universities offering such courses in the US alone. And they can be found at elementary, secondary and tertiary levels of education. "Key entrepreneurial skills, such as attitudes to risk, are inate, but you can learn a lot from other people's mistakes," says Merson, "and one of the best ways of doing this is to attend a course that provides opportunities to study what others have done." The rise of the entrepreneur, therefore, looks certain to continue for the forseeable future.