With Veterans Day fast approaching, many Americans are reminded of the need
to honor and support our service men and women. It is an important
consideration, not only because we owe a debt to those who have risked their
lives on our behalf, but also because their need is so great. There are nearly
2.5 million new veterans who served in the post-9/11 era, a majority of whom are
transitioning or will soon transition from service to civilian careers.
Historically, many veterans taking off the uniform have chosen a bold path to
start and grow new businesses; for the past few decades, veterans have engaged
in self-employment and entrepreneurship at higher rates than the general U.S.
population.
Yet, as a new report from the Kauffman Foundation indicates, that is not currently true. For the first time since 1996, in 2009 the veteran entrepreneurship rate dropped below the non-veteran rate. In 1996, veterans represented 12.3 percent of all new entrepreneurs; by last year, this share had dropped to 6 percent.
Now, it is important to note that this does not indicate that fewer transitioning veterans are starting businesses or that interest within the veteran community in entrepreneurship is waning (indeed, that kind of data does not exist -- but more on that later). The total number of working-age veterans has decreased by similar magnitude -- from 11.2 percent to 6.4 percent -- so it is reasonable to suggest that the decline in entrepreneurial activity is due mainly to the Korean and Vietnam War veteran population aging out of the workforce.
There is some cause for concern, however. After having hundreds of conversations with entrepreneurs, veterans and those working to support them, we believe that veteran business owners are more likely to hire other vets, more likely to serve as mentors to veteran entrepreneurs, and possibly more likely to fund veteran-run startups. Moreover, these experienced veteran entrepreneurs play an important signaling role: Fewer veteran entrepreneurs means fewer role models and success cases to which the aspiring veteran entrepreneur can look for guidance and inspiration. The visibility and accessibility of successful entrepreneurs from their own community is tremendously important in expanding the transitioning veteran's perception of his or her career opportunities, and in increasing the likelihood that more new veterans will take on the challenge of founding a company.
Some may ask why we need or want more veteran entrepreneurs. One incontrovertible answer is that we need more and better jobs for veterans. The Bureau of Labor Statistics indicated that for October the unemployment rate for post-9/11 veterans was an alarmingly high 10 percent. That number is volatile, but it remains true that last year 12 percent of Gulf War-era II veterans were unemployed, much higher than the national average. As with other employment data, this figure does not include the under-employed.
This data also cannot address those transitioning veterans who have jobs but might best be described as underperforming. This nation's transitioning veterans bring to the civilian world a set of skills and experiences that can only be acquired through military service and that prime them for positions as civic, business and economic leaders. Too often, due to inadequate transition support structures, these veterans do not become the great assets they could be. Inadequacies in federal and state programs bear some of the blame, but a successful transition for a veteran requires a whole-of-society approach, and a commitment that goes beyond expressions of gratitude.
Of course, entrepreneurship is not the only means by which transitioning veterans can achieve their potential, but we believe that military service endows many veterans with intangible attributes that also make them poised for high-growth entrepreneurship: drive and self-sufficiency; comfort with dynamic and uncertain conditions; effective management of and trust in teams; and a combat-proven talent for continual assessment, adaptation and innovation. What we do not know, though, is how these attributes translate into entrepreneurial performance because there has been very little research done on this population. We do not know about their ventures' success, growth and failure rates, in what sectors they thrive, and, most importantly, how we can best help current and future veteran entrepreneurs be more successful. Through data and research efforts, we need to start to answer some of these questions in order to find more and better ways to support the veteran entrepreneur.
We do know, however, that with fewer veterans engaged in entrepreneurial ventures each year, we all must step up our efforts to encourage, teach, fund, mentor, connect and celebrate the next greatest generation of veteran entrepreneurs.
Yet, as a new report from the Kauffman Foundation indicates, that is not currently true. For the first time since 1996, in 2009 the veteran entrepreneurship rate dropped below the non-veteran rate. In 1996, veterans represented 12.3 percent of all new entrepreneurs; by last year, this share had dropped to 6 percent.
Now, it is important to note that this does not indicate that fewer transitioning veterans are starting businesses or that interest within the veteran community in entrepreneurship is waning (indeed, that kind of data does not exist -- but more on that later). The total number of working-age veterans has decreased by similar magnitude -- from 11.2 percent to 6.4 percent -- so it is reasonable to suggest that the decline in entrepreneurial activity is due mainly to the Korean and Vietnam War veteran population aging out of the workforce.
There is some cause for concern, however. After having hundreds of conversations with entrepreneurs, veterans and those working to support them, we believe that veteran business owners are more likely to hire other vets, more likely to serve as mentors to veteran entrepreneurs, and possibly more likely to fund veteran-run startups. Moreover, these experienced veteran entrepreneurs play an important signaling role: Fewer veteran entrepreneurs means fewer role models and success cases to which the aspiring veteran entrepreneur can look for guidance and inspiration. The visibility and accessibility of successful entrepreneurs from their own community is tremendously important in expanding the transitioning veteran's perception of his or her career opportunities, and in increasing the likelihood that more new veterans will take on the challenge of founding a company.
Some may ask why we need or want more veteran entrepreneurs. One incontrovertible answer is that we need more and better jobs for veterans. The Bureau of Labor Statistics indicated that for October the unemployment rate for post-9/11 veterans was an alarmingly high 10 percent. That number is volatile, but it remains true that last year 12 percent of Gulf War-era II veterans were unemployed, much higher than the national average. As with other employment data, this figure does not include the under-employed.
This data also cannot address those transitioning veterans who have jobs but might best be described as underperforming. This nation's transitioning veterans bring to the civilian world a set of skills and experiences that can only be acquired through military service and that prime them for positions as civic, business and economic leaders. Too often, due to inadequate transition support structures, these veterans do not become the great assets they could be. Inadequacies in federal and state programs bear some of the blame, but a successful transition for a veteran requires a whole-of-society approach, and a commitment that goes beyond expressions of gratitude.
Of course, entrepreneurship is not the only means by which transitioning veterans can achieve their potential, but we believe that military service endows many veterans with intangible attributes that also make them poised for high-growth entrepreneurship: drive and self-sufficiency; comfort with dynamic and uncertain conditions; effective management of and trust in teams; and a combat-proven talent for continual assessment, adaptation and innovation. What we do not know, though, is how these attributes translate into entrepreneurial performance because there has been very little research done on this population. We do not know about their ventures' success, growth and failure rates, in what sectors they thrive, and, most importantly, how we can best help current and future veteran entrepreneurs be more successful. Through data and research efforts, we need to start to answer some of these questions in order to find more and better ways to support the veteran entrepreneur.
We do know, however, that with fewer veterans engaged in entrepreneurial ventures each year, we all must step up our efforts to encourage, teach, fund, mentor, connect and celebrate the next greatest generation of veteran entrepreneurs.
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