Baby Boomer and Generation Y* entrepreneurs share optimism about the economy and confidence in their ability to succeed in business, according to the OPEN Ages survey from OPEN from American ExpressÂ®, a new survey examining the attitudes of Baby Boomer and Generation Y business owners. But the survey also uncovered surprising findings, including the belief by both generations that America is worse off now than when they were kids.
Large numbers of Generation Y and Baby Boomer business owners are optimistic about the U.S. economy over the next year (64% and 62%, respectively), and most are certain that the decision they made to go into business was the right one, with Baby Boomers being the most assured (90% vs. 76%). Passion, rather than money, fuels the success and entrepreneurial drive of both generations, Generation Y and their parents’ generation, the Boomers.
“Small businesses are responsible for 60 to 80 percent of the net new U.S. jobs created annually over the past decade,” said Susan Sobbott, president, OPEN from American Express. “It is good news for the economy when both the established generation and the generation representing the future of small business are optimistic about economic growth and their own success.”
The two generations diverge, however, on a host of issues from career influences, risk-taking and serial entrepreneurship.
More Generation Y owners say Ã¢Âhaving fun is a priority in my business’ (75% Generation Y, 66% Baby Boomers), and Generation Y also has more trouble letting go. According to the OPEN Ages survey, Generation Y business owners are more likely to find it Ã¢Âvery difficult’ to leave their work to go on vacation (39% vs. 26%). They are also more likely to put in the long hours Ã¢Â 10 or more hours a day (66% Generation Y vs. 58% Baby Boomers), and less likely to describe their business culture as Ã¢Âcasual or relaxed’ (66% Generation Y vs. 77% Baby Boomers). Surprisingly, Boomers also report having more natural energy than their younger peers (60% vs. 50% Generation Y).
Passion is the Primary Motivator; Money is Down the List
Passion is the leading driver for both Generation Y and Baby Boomers in starting their businesses (55% Generation Y, 40% Baby Boomer), followed by the perception that they are “natural” or “born” entrepreneurs (35% Generation Y, 37% Baby Boomers). Money was not an important factor for either generation (18% Generation Y, 14% Baby Boomers), and is less of a source of satisfaction than family and friends, their own independence, and personal accomplishments.
In the area of risk, nearly three quarters of Generation Y entrepreneurs (72%) say they like to take risks compared to just over half of Baby Boomers (53%). Fifty-nine percent of Generation Y believes they take more risks than the average person compared to 50% of Baby Boomers. Generation Y is almost twice as likely as Baby Boomer small business owners (59% vs. 33%) to be or plan to be Ã¢Âserial’ entrepreneurs, owning or planning to own more than one business. Among this generation, men take the lead for serial entrepreneurship with two-thirds owning or planning to own more than one business (67% vs. 46% of women).
Working Harder to be Their Own Boss
Valuing their independence, Baby Boomers and Generation Y business owners are both prepared to work more in order to be their own boss. On average both groups spend 10 hours per day working on business, and typically conduct some type of business activity 6 out of 7 days.
Generation Y entrepreneurs are more likely to have started their business right out of school (27% vs. 9% for Baby Boomers). They are also more likely to look to their parents’ experiences as life-shaping influences, with 55% citing their fathers’ work experiences as a factor in starting their own business. (vs. 44% Baby Boomers). According to the survey, many Baby Boomers (26%) started their business because they were financially unable to retire.
Societal Concerns Shape Small Business Decisions
While the majority of business owners in both age groups believe America is worse off now than when they were kids, this sentiment is more prevalent with Generation Y (68% Generation Y, 56% Baby Boomers).
Both generations are worried about the quality of American education and health care. Only 39% of Generation Y and 32% of Baby Boomers believe American children are getting the education and training they need to succeed. Twenty-six percent of Generation Y and 32% of Baby Boomers believe the US has the best healthcare system in the world. Both generations expressed the importance of offering employees’ healthcare coverage with Generation Y outpacing Baby Boomers with this commitment (70% Gen Y, 62% Baby Boomers).
The generations differ on America’s leadership in technology innovation with only 38% of Generation Y believing that the US is the most technologically advanced country in the world compared to 57% of Baby Boomers, who believe the country does retain its lead in the forefront of technology innovation.
There is broad agreement across the generations on key issues directly affecting small businesses, including the net benefits of free trade (72% Gen Y, 69% Baby Boomers) and the use of private investment accounts to save Social Security (72% Gen Y, 62% Baby Boomers). Surprisingly, the majority of both generations agree that raising minimum wage would not hurt small businesses (60% Generation Y vs. 58% Baby Boomers).
The generations differ, however, on the benefits of immigration. Fifty-two percent of Generation Y believes that immigration is beneficial to the economy compared to only 44% of Baby Boomers.
Experience Trumps Technology for Business Success
Despite Generation Y’s perceived greater ease with technologyÃ¢Â two-thirds (66%) of Generation Y entrepreneurs consider themselves tech savvy compared to less than half (47%) of Baby BoomersÃ¢Âboth age groups agree that experience trumps tech savvy in terms of business success. More than half (59%) of Generation Y think that older entrepreneurs have an edge based on their years of experience, and the vast majority of Baby Boomers agree (88%).
Nonetheless, Gen Y owners are more likely to agree that Ã¢Âtechnology is vital to my business’ (86% vs. 76% Baby Boomers) and that Ã¢Âtechnology is vital to my personal life’ (69% vs. 54%). Despite some discrepancies over the importance of technology in their lives, both age groups agree that Ã¢Âit is important to disconnect from technology during parts of their day’ (71% Gen Y, 74% Baby Boomers). More than half of small business owners in both generations believe that Ã¢Âtechnology intrudes on their personal life, but benefits their business’ (56% Gen Y, 58% Baby Boomers).
Concerned about Global Warming and Prepared to Spend More to be Green
Environmental issues weigh on business owners’ minds. The majority of both groups are concerned about global warming (59% Gen Y vs. 62% Boomers). Across the sexes Baby Boomer women are more concerned then men about this issue (73% vs. 56%). Baby Boomer owners are more likely to think that entrepreneurs are most likely to lead the way to solving global warming (34% vs. 20% Generation Y), while Generation Y owners look to non-profits to solve this issue (29% vs. 21% Baby Boomers). Roughly one in five in each group thinks that government will lead the way, while even less think that big corporations will find solutions.
About two-thirds of business owners in both generations are willing to pay more to businesses that are environmentally friendly (63% Generation Y, 64% Baby Boomers). Among Baby Boomers, three-quarters of women are willing to pay more to Ã¢Âgreen’ businesses compared to just 59% of men.
Different Media Influences
Each generation favored unique preferences for news and information sources that shape their decision making. Baby Boomers, not surprisingly, are most likely to get their news from traditional sources such as television (50% vs. 27% Generation Y) and newspapers (19% vs. 6% Generation Y). Generation Y owners are more likely to get their news from the Internet (31% vs. 9% Baby Boomers) and word of mouth (12% vs. 3%). Generation Y entrepreneurs are also more likely to start a blog to discuss their business (8% vs. 1%).
Additional findings from the OPEN Ages Survey are available upon request.
The OPEN Ages Survey, released for the first time this spring, is based on a nationally representative sample of 602 small business owners of companies with fewer than 100 employees. Half of these owners are from Generation Y (ranging in age from 18-29) and half are Baby Boomers (ranging in age from 42-64). The survey was conducted via telephone by International Communications Research from March 8-March 23, 2007. The poll has a margin of error of Â±4.0% when reporting in total (n=602) or Â±5.7% when reporting on each segment independently (n=301).
About OPEN from American Express
OPEN is the American Express team dedicated exclusively to the success of small business owners and their companies. The OPEN Team supports business owners with unparalleled service. With tailored products and services, the team delivers purchasing power, flexibility, control and rewards to help customers run their business. Specifically, business owner customers can leverage an enhanced set of products, tools, services and savings, including charge and credit cards, convenient access to working capital, robust online account management capabilities and savings on business services from an expanded lineup of partners. To obtain more information about OPEN, visit www.OPEN.com, or call 1-800-NOW-OPEN to apply for a Card or loan. Terms and conditions apply.
American Express Company (www.americanexpress.com) is a leading global payments, network and travel company founded in 1850.
* Generation Y represents those ranging in age from 18-29 and Baby Boomers represents those ranging in age from 42-64.