Good morning people...... this is a good and thoughtful article by Dan Steininger which talks about youths starting a business. It is a form of encouragement for the government and organisations to help the young people in establishing small businesses for themselves. So cool for both young and old people. Read article below and comment on what you think about it.
The world belongs to the young when it comes to starting new businesses. Mark Zuckerberg created Facebook, and other Silicon Valley entrepreneurs introduce one more exciting social networking platform after another to obtain dazzling valuations in the billions of dollars.
Locally, we read about start-up weekends when scores of young people create exciting new apps with so much hype. All of that has to be good for the economy, right?
Unfortunately, the reality is just the opposite. According to The Wall Street Journal, a recently released Federal Reserve report showed that people under the age of 30 who own private businesses had reached a 24-year low.
In fact, the proportion of young adults who start a business each month dropped in 2013 to the lowest level in 17 years, according to the Kauffman Foundation.
What is particularly troubling is that the decline in young entrepreneurs is part of a broader drop in private business ownership over the past 25 years. Robert E. Litan of the Brookings Institute reported "new firms as a portion of all firms fell by nearly half between 1978 in 2011."
The plunge in business ownership captured by the Fed survey is, according to John Davis of the Harvard Business School, a "worrisome trend for the entire U.S. economy."
The average net worth of households under 30 has fallen by 40% since 2007. More than half of 18- to 29-year-olds reported one or more financial problems in the past year, according to a survey by the Pew Research Center. Starting a business takes personal financial resources, and without savings to draw on, it gets more challenging for anyone to start a business, according to Karen Mills, senior fellow at the Harvard Business School and former head of the Small Business Administration.
The question is what to do about it?
Here are some suggestions for Wisconsin policy-makers in government and business that could dramatically increase the number of new businesses started.
■Begin by recognizing that starting a new business is very challenging and that it is unrealistic to expect a young, inexperienced adult, who does not have the financial resources, network or business savvy, to accomplish that feat. He or she must defy the odds.
■Let's focus our resources instead on those new entrepreneurs starting businesses who have a track record of success in the private sector. Wisconsin's Small Business Development Centers (SBSCs) are ideally suited to helping entrepreneurs start and grow existing businesses. Organizations such as the Wisconsin Womens Business Initiative Corp. and BizStarts Milwaukee evaluate the most realistic entrepreneurs and give them the resources to succeed.
■Our larger corporations should take into account the trend of corporate venturing. Those companies possess patents frequently identified by venture funds, which could support start-ups. Companies could be built around those new disruptive technologies. Backing employees to start businesses would be a good way to leverage their intellectual capital and human talent to not only create new businesses, but derive revenues for their corporations by retaining an interest in the company. Locally, entrepreneurs such as Andy Neuenmacker of EMS Systems and Randy Spaulding of Spaulding Clinical Research are prime examples of entrepreneurs who leveraged their experience at GE Healthcare before starting their own businesses.
■Major corporations could establish venture funds to invest in promising start-ups in Wisconsin. American Family Insurance of Madison has launched such an effort under the leadership of Dan Reed and others should follow his example. Wisconsin is way behind the curve. Last year, corporations operated 1,100 venture funds in the U.S., a 43% jump from 2010, according to the industry tracker Global Corporate Venturing.
■ Our academic institutions, both universities and community colleges, could expand their offerings to offer basic boot camps in entrepreneurship for older adults. A model of this is run by Russ Roberts from the Waukesha County Technical College. There, entrepreneurs learn the basics of starting a business.
■Our existing growing clusters in water, food and beverage, energy and medical devices are exciting and very promising. Creating new disruptive technology does not translate into a profitable company. Starting a successful business requires a different set of skills, and there's little recognition. There needs to be a huge level of support and different human resources to launch a company. Manpower's Right Management is currently exploring a role in that space. It could be a game changer.
Our state needs to focus on these great opportunities if we want to dramatically increase the number of new businesses — the source of most new jobs.