Skills for a New Startup Era

Image caption: Woman holding a "Welcome We are Open" sign.

Tapping Into an Entrepreneurial Awakening

One of the surprising outcomes of the pandemic’s impact on the economy is the surge in new business creation.¹ In fact, the rebound in entrepreneurial activity disrupted nearly 40 years of lackluster small business growth, which had only worsened following the Great Recession of 2008.²

The causes for this increase in new business creation are many. For instance, research by Intuit shows that “The Great Resignation” is fueling the boom in small business as more Americans leave their jobs and careers and strike out on their own.³ The next generation also feels this sentiment, with research by Junior Achievement and The Hartford showing that 60 percent of teens would prefer to start a business over having a traditional job.⁴

However, while the interest and intent are there, starting a business is still risky. According to the U.S. Bureau of Labor Statistics, one-in-five businesses fail in the first year, and nearly half fail by the five-year mark.⁵ This leads to the question, “What can be done to increase the odds of success for startups?”

Filling the Knowledge and Experience Gaps

According to the Harvard Business Review, the average age of successful first-time entrepreneurs is 45. However, as the Review points out, venture capital (VC) funds tend to put their resources behind startup founders in their late 20s or early 30s.⁶ Ironically, the reason most startups fail is related directly or indirectly to lack of experience, including launching a product or service where there is no market need, running out of cash, not having the right team, cost and pricing issues, and not having a business model.⁷ This points to the fact that given the proper information, tools, and guidance, young entrepreneurs can increase their chances of success with their business endeavors.

Junior Achievement: A Pathway to “The Path Less Taken”

Junior Achievement employs a pathways approach to teaching entrepreneurship to young people. By “pathways,” we mean that JA programs are designed to engage students on the subject over multiple grades, from their first day in kindergarten, throughout their K-12 years, preparing them for the transition to post-secondary education or work.

Junior Achievement takes this approach because, in many states, entrepreneurship is an elective option and, in numerous cases, is offered only as an extra-curricular activity for no school credit. Given that most of us will work for a small business at some time, and all of us interact with small businesses, we at Junior Achievement believe it’s important to offer programs that cover entrepreneurship and small business across multiple grade levels.

What the Research Says

Our approach gives students the tools to increase their chances of starting or owning a business as adults. Research results⁸ include:

• 51 percent of JA Alumni say they have started or owned a business. According to Statista, 9 percent of Americans own businesses.⁹
• 53 percent of Black JA Alumni and 67 percent of Hispanic/Latino Alumni say they have started or owned a business.
• 56 percent of JA Alumni who had a JA volunteer say they currently work or have in the past worked in the same field as their JA volunteer.
• 36 percent of JA Alumni say Junior Achievement positively influenced their perception of business owners or community leaders.
• 27 percent of JA Alumni say Junior Achievement positively influenced their decision to start or run a business.
• 27 percent of JA Alumni say they employ 100 or more people.¹⁰ The U.S. Census Bureau reports only 7 percent of U.S. small businesses say the same.¹¹

The research also shows that JA alumni are more likely to finish college, find a satisfying job or career, and feel confident managing money. To learn more about Junior Achievement, visit www.JA.org.

¹ “Business Formation Surged during Pandemic and Remains Strong,” NBER, September 2021

² “Start-up Boom in the Pandemic is Growing Stronger,” The New York Times, August 19, 2021

³ “The Small Business Economy is Set to Soar in 2022,” Nasdaq, December 20, 2021

⁴ Junior Achievement/The Hartford, February 2022

⁵ “The Percentage of Businesses that Fail and How to Boost Your Chances of Success,” LendingTree, May 2, 2022

⁶ Research: The Average Age of a Successful Startup Founder Is 45, HBR, July 11, 2018

⁷ The Top 20 Reasons Startups Fail, CBInsights, November 6, 2019

⁸ Ipsos/Junior Achievement Alumni Survey, August 2022

⁹ Statista Research Department, August 5, 2022

¹⁰ Ipsos/Junior Achievement Alumni Report, August 2020

¹¹ U.S. Census Bureau, 2020