Call them Gen Y, millennials or young adults. But you could also call today’s young college graduates Generation Entrepreneur. More young adults are self-employed than working for Fortune 500 companies, according to Boston-based Millennial Branding. Here, five reasons that millennials prefer to work for themselves:
It can be hard to find a job these days, and doubly so for young workers with little experience. “Many college students know how bad the job market is, so they’re planning early to create their own career paths instead of relying on traditional employment,” says Cliff Lavin, a longtime marketing executive and venture capitalist who teaches in the University of Phoenix Philadelphia Financial District Learning Center.
The Facebook® generation has grown up with technology, and many Gen Y kids often understand it better than their older colleagues do.
“We’re no longer a manufacturing economy; we’re an information economy,” says Richard Trottier, a mid-market corporate financier who teaches at the four University of Phoenix West Florida Campuses.
“Young people have the skills to sell in this economy,” Trottier says. Many are comfortable, he notes, with software apps, graphic design, crowdsourcing and online translation services. He has seen many young people land both investors and venture capital for their startup technology companies.
Lavin agrees. “Social media has also made it easier to promote new businesses, and these days you can often get started selling your product with just a laptop and an Internet connection,” he says.
The flexibility of independent contractors can be good for companies and young workers, according to Lavin. “These days, many large companies are hesitant to take a chance on hiring untested workers, so instead they ‘try before they buy’ by working with independent contractors,” he explains. “Gen Y’s like it because they want to have a lot of control over their time.”
It’s hard to bet everything on a startup when you’re juggling responsibilities such as a mortgage or kids, so entrepreneurship is more attractive to young people, according to Trottier. “If you don’t have a family to worry about yet, you can afford to put all of your time and energy — and maybe your capital — into starting a business,” he says. “That’s harder to do as you get older.”
Today’s large companies are more likely to outsource the product development that they used to do in-house, and this creates opportunities for startups. “Once companies get big, their corporate culture tends to kill innovation,” Lavin says.
“Smart CEOs understand this. Instead of developing that new video game or mobile app or even new pharmaceutical themselves, they’re letting the small startups take the risk and innovate. Then they buy up the startups’ products.”
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