They've proven they have the gumption to start their own businesses. Now they say they're ready to save the economy.
Generation Y entrepreneurs have a message for Congress and consumers: Invest your time and money in young startups and we'll help get this lackluster economy going again.
"You have 77 million Gen Y-ers out there," said 27-year-old Scott Gerber, the founder of The Young Entrepreneur Council. "The reality is if you don't want a lost generation, you need to start thinking about the future."
Friday's employment report from the Labor Department showed that 13.9 percent of 18- to 29-year-olds were unemployed in July. That's almost double the percentage of those over 30 who were unemployed.
Gerber and others like him think the traditional route to employment has failed their generation. "It's a scary moment we're in, but entrepreneurship can get us out," he said.
Forty percent of those in Generation Y, roughly defined as Americans born from the mid-1970s to mid-1990s, envision starting their own business, and about 20 percent already have, according to a report published last month by The Affluence Collaborative, a research partnership.
"This is a generation of serial entrepreneurs," said Donna Fenn, a journalist who wrote "Upstarts!," one of the first books identifying the Gen Y entrepreneur trend. "A lot of them start businesses in their 20s and many of them don't think that their first business will be their last. They're addicted to creating things, to the startup phase. By the time they reach their 40s, they will have started three, four or five companies."
She said the so-called Millennial generation is inclined toward entrepreneurship partly because they saw their parents lose corporate jobs in the downsizing movement of the era. They also witnessed a wave of ugly corporate scandals followed by the meltdown of the financial industry. The result is that they tend to have a lot less faith in large institutions like companies or government, she said.
"They understand that if they want security and they want to be assured of having a job, now more than ever, it makes sense to create your own job," Fenn said.
Not only have they created jobs for themselves, but for others as well.
Gerber's council is an invitation-only organization for top entrepreneurs founded in late 2010 and has more than 275 members who have created tens of thousands of jobs, he said. Members include daily-deal website Living Social, international media and marketing company Advantage Media Group and companies that have been acquired by Google and Conde Nast, Gerber said.
The Young Entrepreneur Council is proposing a Youth Entrepreneurship Act that would address the barriers that he says young entrepreneurs face. One element would be a program to forgive student loans and debt for young entrepreneurs, which he says would address a major hindrance to recent graduates who want to set up their own shop.
"Now more than ever, with young unemployment being so high, we have to be educating people that youth entrepreneurship is a viable career path and not some renegade choice," Gerber said.
Aaron Smith, co-founder of another young advocacy organization Young Invincibles, is also working with Gerber on the Youth Entrepreneurship Act. He acknowledges that now is a tough time to get anything passed in Congress, but contends that a bill helping young entrepreneurs would give the government a good return on investment.
"Increasingly, Congress is looking at ways to create jobs at a relatively low cost," the 29-year-old said. "One of the interesting things about young people is that their barrier to starting a business is small, in terms of the monetary amount. We're talking only a few thousand dollars."
Matthew Segal, founder of a nonprofit that promotes entrepreneurs under 30, has a slightly different focus. He thinks getting consumers to support young business startups should complement any potential legislation.
"I just lost a good amount of faith in our ability to build a major constituency behind legislation, given how bad our politics have become in this country," said Segal, 25. "When you're dealing with a generation that's very instant-results oriented ... that culture is at odds with our legislative body."
His organization, Our Time, recently launched a "Buy Young" campaign. The idea is to encourage Americans to support more than 125 member businesses, including discount luxury retailer Gilt Groupe, clothing company Karmaloop and dry-erase paint company IdeaPaint, by offering exclusive discounts on their products and services.
The companies are responsible for creating more than 7,000 jobs since they were founded, Segal said. Since the campaign launched, the website has received more than 30,000 visitors.
Regardless of the campaign's potential success, or any legislation that may get passed, the number of Gen Y entrepreneurs will continue to rise as traditional job opportunities decline, Fenn said.
"It's not like they're going to singlehandedly pull us out of the recession, but they are going to help create economic stability in the future," she said. "I think what we're going to see is this generation, in the next 10 years, at the helm of the biggest, brightest and most successful companies we've ever seen."
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