Our Lost Generations of Young Entrepreneurs
This nation was founded by entrepreneurs who knew that with some sweat equity and risk taking, they could share in the American Dream. But for today’s young entrepreneurs, that dream has become a nightmare. High taxes, onerous regulations and diminished access to capital has seen entrepreneurs stand on the sidelines waiting for a business environment that welcomes and rewards their participation. They are still waiting.
According to a study conducted by the Federal Reserve, the share of people younger than 30 who own private businesses has reached a 24-year low. Only 3.6 percent of households headed by adults younger than 30 owned stakes in private companies. In 1989, that figure was 10.6 percent.
I caught the entrepreneurial bug when I was a young man, and today I own a half dozen companies and employ some 200 people. But I often wonder if today’s business environment existed 20 years ago, would I have had the guts to take the risk? I’d like to think I would, but too many people have decided not to try.
Think what we all lose out on if our young entrepreneurs decide not to get into the game.
Steve Jobs and Steve Wozniak started Apple from a garage when they were 21 and 26, respectively.
In 1901, 21-year-old William S. Harley drew up plans to create a small engine to power a bicycle. He joined with his friend, Arthur Davidson to found the world’s most iconic motorcycle brand: Harley Davidson.
While in Wisconsin this week I drove by the Harley Davidson plant and was in awe of what this brand and its products mean to millions of people of all ages around the world.
In 1969, at 16 years old, Michael Kittredge made his first scented candle in his garage out of melted crayons as a gift for his mother. Four years later, Kittredge outgrew the garage and started the Yankee Candle Company, which today is the largest manufacturer of scented candles in the United States.
It is estimated that 75,000 pages of new regulations were written last year, and 300 regulations have already been written in the first couple weeks of 2015.
Where are the Jobs, Wozniaks, Harleys, Davidsons and Kittredges of today? They are waiting for the opportunity to bring their vision to reality, if only they had a welcoming business environment.
Access to capital is one of the major roadblocks for small businesses. The Obama administration in 2014 has for the third consecutive year approved a smaller volume of government-backed small-business loans. Small Business Administration (SBA) officials in 2014 approved federal guarantees supporting $28.6 billion in small-business loans, according to SBA figures. That’s about $1 billion short of 2013 totals and down from a peak of $30.5 billion in fiscal 2011.
When you mix in the carnage of Dodd-Frank, community bank lending resources are also disappearing.
Then consider the explosion of regulations that impede innovation and growth. During 2014, the Obama administration passed 27 new regulations for each law passed. It is estimated that 75,000 pages of new regulations were written last year, and 300 regulations have already been written in the first couple weeks of 2015.
Chances are pretty good that if Harley and Davidson tried to start up their motorcycle company today, the Environmental Protection Agency would have enacted so many regulatory barriers that the company would never have gotten off the ground.
And finally, with the U.S. having the highest corporate tax rate in the world, there is no incentive for young entrepreneurs to start up a business that would see most of their sales go to pay for an out-of-control tax system.
Most people lament the loss of our natural resources, but the loss of our entrepreneurial resources impacts the economic future of our nation.
Listening to Obama’s State of the Union address was like listening to a eulogy of America’s entrepreneurial spirit. It was filled with rhetoric that discourages our young people to reach for the stars. It was peppered with his usual class warfare stuff that despises success and creates resentment.
Our next president must inspire by creating a welcoming environment for entrepreneurs. Not just lip service, but with real incentives to grow and sustain our small-business community. That’s where the economy gets fixed, and that’s where good-paying jobs are created.
Since I mentioned Steve Jobs, let me close with something he once wrote: “Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of other’s opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”