It isn’t the $787 billion American Recovery and Reinvestment Act of 2009 or the $700 billion bank bailout that are turning stimulating the economy. The real economic stimulus package is the recession itself, and in this upside-down economy, an atypical group of people are turning things around for themselves and their families.
In the years since Michael Dell used $1000 to transform his college dorm room into an assembly line, many more students are following his lead. Faced with a bleak job market, enterprising students see advantages in starting their own companies; costs are coming down and pressures on nimble, low-cost upstarts aren’t as heavy. Growth is often a result of the Internet, where snazzy websites don’t betray a home-based operation. Entrepreneurs can be more profitable with less need for capital or office space. Taking a risk isn’t necessarily the leap of faith it used to be. According to The Challenger, Gray and Christmas’ job market index, 8.9 % of job seekers started their own businesses in the second quarter of 2009, way up from the record low of 2.7% in the last quarter of 2008.
Young entrepreneurs may be in the spotlight, yet baby boomers are becoming business owners faster than any other group. New businesses started between 2007 to 2008 by 55- to 64-year olds grew 16 percent, faster than any other group, according to Ewing Marion Kauffman Foundation, a nonprofit group that studies U.S. business start-ups. The organization predicts a sustained boom, not in spite of the aging workforce but because of it. This group has built-in advantages, including accumulated business knowledge and funds as well as a network of people to turn into customers, suppliers and financial advisors. Many find that starting a business around lifelong interests or passions is rewarding as well as profitable.
With this trend, the next decade will see the growth of small businesses continue and the social and economic impacts of small business increase.