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The latest data from the latest Global Entrepreneurship Monitor report reveals a powerful trend for the future of entrepreneurship.
According to the study, young adults aged 18-24 had the highest entrepreneurial activity and intentions in the United States. Global Entrepreneurship Monitor 2023-2024 for the United States. With similar results in 2022, this is not only a minor change – it is a fundamental change that can have a lasting impact on the economy and society.
I’m the Chairman of the Board of the Global Entrepreneurship Research Association, the governing body of GEM, founded in 1999 as a three way partnership between Babson College and London Business School. As co-chair of the GEM US team and a professor of entrepreneurship at Babson, I see first-hand the impact of research conducted by the Global Entrepreneurship Monitor.
Here are three entrepreneurship trends from GEM’s latest report that are changing the landscape for the future.
1. The number of young entrepreneurs is growing
For years, entrepreneurship has been dominated by older, more experienced people, but this 12 months’s report shows that the youngest adults are currently at the forefront. According to GEM, 24% of people aged 18 to 24 run some form of business, which is a higher percentage than in any other age group. Equally remarkable is what drives these young entrepreneurs: they do not just start firms to make money; many of them are deeply committed to creating a positive impact on society and the environment.
These young entrepreneurs recognize sustainability as a key priority. They are more likely than entrepreneurs from older generations to build firms whose fundamental goal is sustainable development – whether that means reducing their impact on the environment or focusing on social issues. This shift towards impact-based entrepreneurship is not only anecdotal. GEM data shows that a significant number of young entrepreneurs are taking real, measurable steps to create firms that align with their values. With sustainability as their north star, young entrepreneurs appear to pursue social impact and profits concurrently.
However, not every thing runs easily. Although young people are at the forefront of starting a business, they are more likely to offer up on it than their older colleagues. The dropout rate among 18-24 12 months olds is 15%, the highest of all age groups. This is not surprising given the challenges of inexperience and more limited access to capital. Starting a business is hard and maintaining it is even harder. However, despite these obstacles, the enthusiasm and energy that young people bring to entrepreneurship is undeniable, and with the right support, this generation has the potential to make a significant difference.
2. The gender gap in the tech industry is closing
One of the most promising findings of the GEM report is the closing gender gap in the technology sector. Historically, tech startups have been dominated by men, but 2023 saw a record low gap in the number of men and women starting tech firms. The gap has narrowed to simply 1%, with 8% of women in comparison with 9% of men entering the information and communications technology (ICT) sector.
This is a significant step forward and reflects broader efforts to support more women tech startups. However, it is necessary to acknowledge that despite progress, continued focus on ensuring equal opportunities is essential to make sure this trend continues.
3. Optimistic outlook for black and Latino entrepreneurs
Another necessary element of the report is the optimistic outlook for black and Latino entrepreneurs. These groups showed greater confidence in their entrepreneurial abilities and less fear of failure in comparison with their white counterparts. Black respondents in particular demonstrated high levels of resilience and self-confidence, which is essential in overcoming the barriers they face in starting and maintaining businesses. This optimism is encouraging, but there is still much work to be done to make sure that ecosystems offer equal opportunities to all aspiring entrepreneurs, regardless of their background.
A promising future
Reflecting on the key findings of this 12 months’s GEM report, it becomes clear that the entrepreneurship landscape is changing in significant ways. The rise of young, sustainability-minded entrepreneurs signals a future where business is not only about profit, but also about making a difference. These young entrepreneurs are starting their firms at a time when the world is looking for solutions to some of its most pressing challenges – climate change, poverty and economic recovery.
However, to totally realize the potential of the next generation, greater emphasis have to be placed on meeting the challenges they face. Young entrepreneurs need access to the right resources – funding, education and mentoring – to remodel their revolutionary ideas into sustainable enterprises. While the closing gender gap in the tech industry is encouraging, we must proceed to support environments that support women and other underrepresented groups in entrepreneurship.
The GEM report paints a picture of the future of entrepreneurship driven by purpose, diversity and innovation. But it also reminds us of the work ahead of us to make entrepreneurship more accessible and sustainable. If we offer young entrepreneurs with the tools and support they need, we will not only see more businesses emerge, but also businesses that make a lasting, positive impact on the world.