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The latest data from the new Global Entrepreneurship Monitor report shows a strong trend for the future of entrepreneurship.
Young adults ages 18 to 24 had both the highest entrepreneurial activity and entrepreneurial intentions in the United States, according to the Global Entrepreneurship Monitor 2023-2024 United States Report. Similar results in 2022 represent not just a minor change, but a fundamental shift that could have lasting impacts on the economy and society.
I am board chair of the Global Entrepreneurship Research Association, the organization that oversees GEM and was founded in 1999 as a joint venture between Babson College and London Business School. As co-lead of the GEM US team and professor of entrepreneurship at Babson University, I see firsthand the impact of the research produced by the Global Entrepreneurship Monitor.
Here are three entrepreneurial trends from the new GEM report that will change the landscape for the future.
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1. Young entrepreneurs on the rise
For years, entrepreneurship was dominated by older, more experienced individuals, but this year's report shows that the youngest adults are now at the forefront. According to GEM, 24% of 18-24 year olds are involved in some form of entrepreneurship, a higher rate than any other age group. What drives these young entrepreneurs is equally remarkable: They don't just start companies to make money; Many are determined to have a positive impact on society and the environment.
These young entrepreneurs place great value on sustainability. They are more likely than older generation entrepreneurs to build companies with sustainability at their core – whether by reducing their environmental footprint or focusing on social causes. This shift towards impact-oriented entrepreneurship is not just an anecdote. GEM data shows that a significant number of young entrepreneurs are taking real, measurable steps to create businesses that align with their values. With sustainability as their guiding star, young entrepreneurs appear to be aiming for social impact and profit at the same time.
However, not everything is going smoothly. While young people are leading the way in starting businesses, they are also more likely to abandon them than their older counterparts. The dropout rate among 18- to 24-year-olds is 15%, making it the highest among all age groups. This is not surprising given the challenges of inexperience and more limited access to capital. Starting a business is difficult, and maintaining one is even more challenging. Yet despite these hurdles, the enthusiasm and energy that young people bring to entrepreneurship is undeniable, and with the right support, this generation has the potential to drive significant change.
2. The gender gap in technology is narrowing
One of the most promising findings of the GEM report is the narrowing of the gender gap in the technology sector. Historically, tech startups have been dominated by men, but in 2023 there was a record-low gap in the number of men and women starting tech companies. The gap has narrowed to just 1%, with 8% of women starting information and communications technology (ICT) businesses compared to 9% of men.
This is a significant step forward and reflects broader efforts to support more female tech startups. However, it is important to recognize that despite progress, a continued focus on creating equal opportunities is essential to ensure this trend continues.
3. Optimistic outlook for black and Hispanic entrepreneurs
Another highlight of the report is the optimistic outlook among black and Hispanic entrepreneurs. These groups demonstrated greater confidence in their entrepreneurial abilities and lower fear of failure compared to their white counterparts. Black respondents in particular demonstrated high levels of resilience and self-confidence, which are critical to overcoming obstacles in starting and maintaining businesses. This optimism is encouraging, but there is still much work to be done to ensure that ecosystems provide equal opportunities for all aspiring entrepreneurs, regardless of their background.
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A promising future
Looking at the key findings from this year's GEM report, it's clear that the entrepreneurial landscape is changing in significant ways. The rise of young, sustainability-focused entrepreneurs signals a future where businesses are not just about profit, but also about making an impact. These young entrepreneurs are launching companies at a time when the world is seeking solutions to some of its most pressing challenges – climate change, poverty and economic recovery.
But to fully realize the potential of this next generation, greater focus must be placed on addressing the challenges they face. Young entrepreneurs need access to the right resources – be it funding, education or mentoring – to turn their innovative ideas into sustainable businesses. The narrowing of the gender gap in tech is encouraging, but we must continue to foster environments that support women and other underrepresented groups in entrepreneurship.
The GEM report paints a picture of an entrepreneurial future characterized by purpose, diversity and innovation. But it also reminds us of the work that lies ahead to make entrepreneurship more accessible and sustainable. If we can provide young entrepreneurs with the tools and support they need, not only will more companies be created – we will also see companies that have a lasting, positive impact on the world.