IBSA Online

Young people dream of becoming entrepreneurs, despite America’s lingering recession

A survey was conducted online within the United States by Harris  Interactive® on behalf of the Kauffman Foundation in August 2010, among 5,077 youth ages eight to twenty-four. For 8- to 17-year-olds, figures for age, sex, race/ethnicity, education, region, school, location, and parental education were weighted where necessary to bring them in line with their actual proportions in the population. For 18- to 24-year-olds, figures for age, sex, race/ethnicity, education, region, and household income were weighted where necessary to bring them in line with their actual proportions in the population.

The results show that business ownership continues to capture the imaginations of America’s youth, particularly for those who know a successful entrepreneur personally.

 
Findings:

• Existing business owners have significant influence: Of the young people who know an entrepreneur personally, 46 percent want to start or already have started a business. Of those who don’t personally know a business owner, 31 percent want to start or already have started a business.

• Nearly six in ten tweens (58 percent) and teens (59 percent), and even more young adults (66 percent), know someone who has started a business. Most often the people they know who have started a business are parents or another family member.

• Twenty-nine percent of young adults—those in the 18- to 24-year-old group—know a friend who has started a business.

• Males (45 percent) are more likely than females (35 percent) to want to start, or already have started, a business.

• Regardless of whether or not they know a business owner, earning a lot of money is the primary reason (26 percent) why youth overall want to start businesses. This reason is highest for tweens and teens (36 percent and 29 percent, respectively). On the other hand, building something for the future is 18- to 24-year-olds’ main reason for wanting to start a business (20 percent).

• Seventy-five percent of the 8- to 12-year-olds, 62 percent of the 13- to 17-year-olds, and 62 percent of the 18- to 24-year-olds agree that they can successfully start their own business if they work hard.

• Nearly half (48 percent) of youth who want to or have started a business, and almost one-third (31 percent) who know a business owner, are more likely than other youth to say that starting a business is more desirable than other careers.

• Youth who have interest in starting a business of their own would seek information first from someone who has started a business (65 percent). Among all youth, 60 percent of the 8- to 12-year-olds, 63 percent of the 13- to 17-year-olds, and 64 percent of the 18- to 24-year-olds would seek out entrepreneurs for information about starting a business.

• In addition to reaching out to business owners for information, a majority of teens and young adults would utilize online research (63 percent and 64 percent, respectively), while tweens would turn to family members (65 percent).

• Youth who want to start a business or have done so (63 percent) or youth that know a business owner (55 percent) are more likely than others to agree that their education has helped them understand the role of business owners in the economy.

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Entrepreneurship: It’s in Demand by Students

A key survey by the Gallup Poll indicates that many students, particularly minority youth, have a strong interest in entrepreneurship:

• 69% of high school students said that they wanted to start their own business

• 75% of black youth said that they wanted to start their own business

• 73% of the students said that independence was their primary motivation for wanting to start a business (and not monetary benefits).

• 68% of the students said that it was very important for successful entrepreneurs or business owners to give something, in addition to providing employment, back to the community

• 80% of black students said that it was very important for successful entrepreneurs or business owners to give something, in addition to providing employment, back to the community

Moreover, the survey indicated that youth are not getting the training they want:

• 9 out of 10 students rate their entrepreneurial knowledge as poor or fair at most

• when asked to answer questions demonstrating basic entrepreneurial knowledge, high school students on average were only able to answer 44% of the questions correctly

• 85% of students said they had been taught “practically nothing about” or “very little about” business and how it works

• only 27% of students reported that they had taken a class in business or entrepreneurship

• 84% of students said that it is “important” (36%) or “very important” (48%) that schools teach more about entrepreneurship and how to start a business

• 67% of black youth said that it is “very important” that the nation’s schools teach students about entrepreneurship and business

Supporting research: Gallup Organization, Inc. & National Centerfor Research in Economic Education. (1994).

Entrepreneurship and Small Business in the United States: A Survey Report on the Views of the General Public, High School Students, and Small Business Owners and Managers.

(Available from the Center for Entrepreneurial Leadership, Inc., Ewing Marion Kauffman Foundation, Kansas City, MO.)