Dr Shailendra Vyakarnam, Visiting Professor
If you asked an up-and-coming entrepreneur about their future in business ten years’ ago, it would have been a landscape of wealth: boardroom power, a global network of physical operations, pyramids of employees. With the Millennial entrepreneurs (those born after 1980) this vision has evaporated, and the new breed is beginning to re-shape the business world. Less Sir Alan Sugar, more bohemian juice bar. How they make money, how they spend and invest it, will be very different from those of the past.
I get to speak with streams of new and aspiring entrepreneurs as they pass through the School, learning about their plans and ambitions, and the change in tone and content has been striking in recent years. Generally speaking there are two strands. The one is all around the new context of digital technology, how it has lowered the barriers to entry for enterprises, digital platforms and IT-based products and services. It’s a chance for people without capital to give entrepreneurship a go. These businesses are aimed at addressing First World needs or challenges and market gaps. The other strand is interested in issues, big ideas to tackle Third World poverty, questions of sustainability and social justice. There’s not much, if anything, that’s being suggested in-between these two.
My experience of Millennials is that many are coming to business-making fresh, as an opportunity that hasn’t necessarily been a tradition in family. They are bright and enthusiastic but may not be business-minded in a conventional sense. Millennials want to become entrepreneurs earlier in their lives than has typically been the case; and are more likely to want to make the leap at any stage in their careers and into later life.
Why is this happening? Much of it can be explained by the environment in which the Millennials - so-called because they came of age around the year 2000, and are sometimes also known as Generation Y - entered the jobs market. Old certainties based around the psychological contract with an employer had broken down, the jobs for life, career ladders and sizeable wage increases, could no longer be relied on. At the same time, the end of financial support for students and the nature of housing market meant Millennials were more likely to be carrying larger amounts of debt, and less likely to be able to save for retirement. For their Baby Boomer parents, working hard and making sensible decisions was a fair guarantee of smooth progress and comfortable retirement. Without this prospect, Millennials have become dis-engaged from traditional forms of business, and looked for alternatives, either more willing or being forced to take greater risks. In all of this discussion it’s important to be clear I’m talking about the Millennials of the developed world, particularly in the US and Europe, which are still a highly privileged generation, whatever their relative financial woes.
There’s also a bigger picture issue here around attitudes towards capitalism and a questioning of its impact. Millennials are less optimistic. What happened to the ‘trickle down’ of wealth? Business activity as a basis of a more fair and equal society? What happened to the promise of more rewarding careers with more work/life balance? Where did the security and stability go? On their side, Millennials are conscious of being digital natives, of having the tools to be disruptive. They are not so much job-seekers anymore, they want to be able to create their own jobs. In this way the new entrepreneurs are part of the cusp of change as new forms of business - and systems of capitalism - are created, exploring new ways of encouraging a greater sense of inclusivity and balance between rich and poor, work and leisure. That’s the pull, but there’s also the push from the levels of underemployment and unemployment, in Europe in particular, which has forced many people to look at starting their own business as the only option available.
Entrepreneurship has become a social movement with wider implications. In terms of wealth generation a significant characteristic of Millennial enterprises is that they are less profit-driven. Success is measured as much in terms of the experience of running a business - what it brings people in terms of a sense of fulfilment, challenges met, the chance to work with like-minded colleagues. They want to have fun with a business and then move on to something new rather than necessarily pushing on with relentless growth and upscaling. Millennial business models are often a hybrid of both a level of profit alongside different forms of social benefits; and in their world any kind of business can be a social enterprise, including the traditional manufacture of products. This approach means challenges for employees and other stakeholders. Fewer long-term businesses will lead to even more uncertainty and less security for employees, supply chain partners and investors.
There will be increasing pressure on financial systems. Conventional banking is too slow and for Millennials looking for flexibility, and can lack the necessary understanding of hybrid business models. The new entrepreneurs will find their own ways to access finance from alternative providers, the new banks and crowdsourcing. Similarly, professional service providers like accountancy and legal advice have become too heavily-focused on monolithic, linear business organisations when Millennials will be looking for the fleet and forward-looking. We’re already seeing the changes in terms of the rise of the ‘challenger banks’, the newly-licensed digital banks like Atom and Monzo, offering faster, more flexible services.
For consumers the impact will come in terms of diversity. More alternative choices to the big brands, more ethical and sustainable options, more pop-up enterprises in High Streets, more niche and nostalgia offerings. There will also be an increase in the numbers of lifestyle businesses geared not so much around provision of products but experiences that improve quality of life, health, wellbeing.
Millennial entrepreneurs will be consuming education very differently. We’re already used to how students rarely do any pre-reading. They will search for online content, often during lectures, and formal learning has become just one of multiple inputs. For the future learning for entrepreneurs will need to come on the Just-in-Time model. People won’t follow a pattern of learning and then go away to set up business, they’ll dip in and out when there are specific issues they need help with, and provide content that helps to marry the hard realities of business and industry with free-flowing ways of working and thinking. The focus will be on finding ways to engage future Millennials in learning by doing.
Millennial businesses are a work-in-progress, and the degree of their impact on ordinary lives is still unclear - it might be evolution, it might be revolution. The primary deciding factors in this will be what happens politically over the next decade, the pressures and trends which come with the re-invention of capitalism itself.
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