Young lead way in new firms

Press, 10 July 1985, Page 34

Young lead way in new firms

Tom Cannon, professor of business studies at the University of Stirling, Scotland, author of several books on entrepreneurship, and small-business columnist of the “Guardian," London, was the visiting Erskine Fellow at the University of Canterbury recently. This is the second of three articles in a series by Professor Cannon.

By

TOM CANNON

In early 1984, the United States National Federation of Independent Business published a survey of its 400,000 members. Its findings surprised many observers of small-business development while confirming a growing sense of change in the character of smaller enterprises. They found that just under a third of all new business formations were by people under the age of 30. The same study suggested that in the categories defined as “high technology” almost 40 per cent were founded by the same age group. It would be wrong to read too much into these precise statistics. However, it would seem that like policemen, entrepreneurs are getting younger; at least in the United States. This aggregate data is supported by some of the more dramatic young entrepreneur success stories. Stephen Jobs, the founder of Apple Computer was only 25 when the firm was founded. He was 29 when the company went public netting him ?US4SO million. In Britain, Richard Branson was in his early twenties when Virgin Records was set up. In Australia and New Zealand similar success sto-

ries of different scales can be seen in a diverse array of areas. The impact in North America is enhanced by its changing population structure. There has been an increasing shift in the population to those between the ages of 30 and 45. This is the largest sector of the population. This group is both more venturesome and more willing to experiment and respond to innovations by others. It creates both a market and a willingness to supply it. However, the phenomenon goes much deeper into the history and culture of a community. There is abundant evidence that periods of major economic change and industrial restructuring witness increased youthful enterprise. Whitney, Telford,

Ford, Edison, Morris, Singer, Kellogg and many others, whose enterprise have shaped industries and communities founded their first company before their thirtieth birthday. The first Industrial Revolution was characterised by many of the phenomena we see today. There were the positive features: dramatic increases in output; the creation of new industries; and the exploitation of new resources. There were negative aspects as traditional ways of working, types of employment, and jobs were lost. The comfortable notion of “necessary adjustment” does little to describe the difficulties posed. At the same time the process could not be stopped dr reversed. Communities could choose to stand outside it or respond and adapt by creating an environment in which entrepreneurs could capitalise on new knowledge and ideas. The latter become the economically developed nations of the Western World. This pattern of change is continuous. In many parts of the developed world views of enterprise and risk have changed. In Britain attitudes to entrepreneurship became increasingly negative, especially in the