In Our View: Main Street Dreams

If the recovery from the Great Recession is to be sustainable, it will require the development of a broad-based economic foundation.

That is one of the takeaways from a recent and illuminating column in The Washington Post by two business professors. Matthew Kammer-Kerwick and Robert A. Patterson noted differences in the goals and desires of young adults — so-called millennials — when compared with previous generations as it comes to forging their economic security. “Millennials view career success differently than their parents do,” they write. “Rather than striving for the CEO spot, 66 percent of millennials would like to start their own business.”

Of course, who wouldn’t? Many people have long-suppressed dreams of opening, say, their own cupcake shop and — given the ethos of modern times — landing a reality TV show. Surveys have demonstrated that desire is especially strong for millennials, but the goals of young would-be entrepreneurs are different from how they typically are portrayed. While political and economic efforts have focused on desires to create high-tech startups, this approach is unnecessarily myopic. “When it comes to celebrating entrepreneurship, our society, led by Washington, D.C., and Wall Street, has become fixated on the technology industry, funneling money and support primarily into tech startups. . . . In contrast, most aspiring entrepreneurs dream about starting Main Street companies — restaurants, barbershops, boutiques, and other everyday retail and services,” Kammer-Kerwick and Patterson write.

But dreams don’t often match reality. The authors note that just 3.6 percent of households headed by young adults own a stake in a private company — compared with 10.6 percent in 1989. Despite much discussion about entrepreneurship and a perception that high-tech startups are driving economic growth, studies have shown that the United States is creating few new companies. “The future of our economy,” Kammer-Kerwick and Patterson write, “depends on finding a way to shrink that chasm between having an idea and having a business.”

That will require more focus on Main Street companies and their development. While many motivated entrepreneurs might dream of creating the next must-have iPhone app, sustainability requires more depth. “That’s why government and other institutions need to step up,” the authors write. “For one, we need to demystify the startup process for aspiring entrepreneurs. … We also need to enhance connections between millennials and more experienced entrepreneurs as partners and mentors.” Most new firms fail within five years, they note, and while millennials typically are confident and optimistic, older entrepreneurs are more likely to value persistence and “focus on the concrete benefits of employment: Job security, reliable health insurance, and retirement savings.”

At the heart of the issue is the U.S. economy’s continued movement away from businesses that produce tangible products in favor of the ethereal nature of high tech. And at the heart of that issue is, as Robert J. Samuelson wrote last year for The Washington Post, “What allegedly deters and hampers startups is not any one regulation but the cost and time of complying with a blizzard of them.”

In other words, there are many factors impacting entrepreneurship — and therefore the economic recovery. In dealing with those roadblocks, it will be crucial to pay just as much attention to Main Street as to Silicon Valley.