Our society faces multiple challenges as we head into the post-COVID era. As vaccines begin to dull the effects of the virus, we want to take stock of the issues that may have been pushed to the side as the pandemic has raged out of control. We do this from two perspectives: an almost retired boomer coming to the end of a career, and a side-hustling millennial trying to scratch a living out of a creative life as a writer and musician. We want to argue from both perspectives that we need to become a nation of entrepreneurs, and that the time is fairly short for such a transition.
Serious Societal Issues
American society, as well as others around the globe, faces several serious societal issues that require our best creative thinkers to begin to solve. We can no longer ignore, for example:
- Growing economic and opportunity inequality
- Racial injustice
- Continued gender discrimination
- Global warming and climate change
- A fractured political system that threatens our democracy
We don’t believe that there is a “one size fits all” approach to tackling these issues, and we are distrustful of the unanticipated consequences of massive government programs that have good intentions. We have a more simple and straightforward idea that will move us toward multiple solutions to these seemingly intractable problems.
We need to become a nation of entrepreneurs. We need thousands of people starting new businesses based on their ideas for how to deal with these societal issues, as well as others that exist. We need new products, new services, new jobs and new forms of business to tackle these difficult challenges. Business needs to be a part of the solution.
The Narrative of Business
One of the most hopeful signs is that the underlying narrative of business is fast changing its tune. No longer do we see the view that business is only about profits for shareholders. JUST Capital has documented that a vast majority of Americans, 89 percent, want companies to focus on doing right by employees, customers, communities and the environment.1
Of course companies have to make money in order to do this. But so-called “shareholder primacy” has run its course and “stakeholder capitalism” has begun to take hold. From the Business Roundtable statement to the Blackrock CEO’s annual letter to CEOs, endorsing the idea of purpose and creating value for stakeholders, we are entering a new era. We must build our business system based on what has always made capitalism work: the incredible energy of our entrepreneurs.
Boomers have long been involved in struggles for civil rights, environmental sustainability and other social issues. Meanwhile, younger generations, millennials and zoomers, see the future and realize that business must play a role. Post-pandemic, more millennials approve of both capitalism and socialism.
Millennials are the side-hustle generation. In 2019, among young adults ages 18–29, 19 percent were self-employed as their primary employment, and another 19 percent had a side hustle of some sort while punching the clock at a “day job.”2
For their part, many retiring boomers are finding a new chapter by starting something they have dreamed about, starting side hustles of their own. Almost one-third of boomers are also engaged in side hustles.3 And we know that there are more self-employed people among older folks like boomers. This may be due to the fact that more small businesses are run by boomers, and they may work longer than the typical retirement age.
For the past decade, new business applications have been on the rise from 2.5 million in 2010 to 4.35 million in 2020. The birth to death ratio of new business startups to failures tells another story.
Small Business Survival Rates (1994–2018):4
- Two-year survival rate: 68 percent
- Five-year survival rate: 49 percent
- 10-year survival rate: 34 percent
- 15-year survival rate: 26 percent
A Nation of Entrepreneurs
To become a nation of entrepreneurs, we need to do several things simultaneously:
- Create good jobs. Between 2000 and 2019, small businesses accounted for 65 percent of net new jobs in the U.S. Furthermore, they employ 47 percent of all private sector employees.5 These often start as part-time side hustles, but as the businesses become more viable, they are transformed into purpose-driven, sometimes lucrative jobs. At the extreme are the Silicon Valley unicorns, but there are plenty of businesses that started as side-hustles that became established companies. For example, Apple, Facebook, Twitter, UnderArmour, Khan Academy, Spanx and other large companies were all started as side hustles.6
- Redefine entrepreneurship in a more inclusive manner. It is a broader idea than unicorns, angel investors and venture capitalists all looking to hit a home run. Small businesses are the main source of employment around the world. Many are established and are far distant from their startup days. But the owners must continue to have an entrepreneurial outlook in order for the businesses to sustain themselves. Startups average 4.4 employees per company, and small businesses average 22.22. In both cases, everyone knows everyone else and there are few barriers to working together to create value for customers, suppliers and communities, as well as employees and owners.7
- Provide better access for everyone — to current jobs and to resources for starting companies. We need more incubators and accelerators that encourage people to start their own businesses and to start them in the right way. Businesses that don’t create value for customers, suppliers, employees, communities and owners are not sustainable. Entrepreneur and CEO of Conscious Venture Lab Jeff Cherry has been doing this, especially for people who have been shut out of the business system. Cherry and his organization provide some capital and some advice and coaching, as well as a physical space where like-minded entrepreneurs can meet and discuss common issues and opportunities. It has now sponsored over 100 young startups, many of which are thriving.
- Raise up the idea of “good business” as part of the solution to these challenges. Much in the way that the Baldridge Quality Awards by the U.S. Department of Commerce raised awareness about using “quality management” to improve companies and make them more responsive to the knowledge that many employees have, we need something like an “Office of Good Business” to act as a cheerleader and facilitator. One of the government’s many roles is to act as facilitator of value creation, rather than owner of production or mere referee and regulator. Such an office could help small businesses, family businesses and startups with finding capital, great employees and other companies to work with.
Builders of Society
The best companies are builders of society. And plenty of them exist. We need to focus on these companies because they bring people together; they don’t drive them apart. They don’t take shortcuts. They don’t engage in financial manipulations. They create jobs and stand by their products and treat employees fairly. They are good citizens and build communities. They stand for American freedom, dignity and equality of opportunity for everyone. In short, they adhere to the idea of stakeholder capitalism, which is what Americans expect of their companies — just see the JUST Capital survey.
We need many more of these companies.
- 2Abraham, K.G., B. Hershbein, and S.N. Houseman. 2021. “Contract Workers at Older Ages.” Journal of Pension Economics and Finance. 20, 426-447.
- 4Small Business Administration Office of Advocacy. 2020. “Frequently Asked Questions About Small Businesses 2020.” https://cdn.advocacy.sba.gov/wp-content/uploads/2020/11/05122043/Small-Business-FAQ-2020.pdf.
- 5Small Business Administration Office of Advocacy. 2020. “Frequently Asked Questions about Small Businesses 2020”. https://cdn.advocacy.sba.gov/wp-content/uploads/2020/11/05122043/Small-Business-FAQ-2020.pdf.