A New Dawn?

I hope Justin has picked up some good Summer reading for his holiday, for if he had turned to the financial press as normal he would have found the usual swinging pendulum of news. All that oscillating between ‘a recovering economy’ backed by improving data to ‘oh dear it’s worse than we thought’ substantiated by an extension of the Bank of England’s quantitative easing, can make for dizzying reading. Forced to turn to the blogosphere (yes, that’s a word!), and the opinion pages for inspiration, I was interested to stumble upon Michael Malone’s editorial in the Wall Street Journal.

Looking well past the current economic misery, Malone talks of an American future driven by an ever innovative and individualistic Generation Y. The generation who have changed the way we learn, communicate and consume will not only lead to new products and inventions but to “new ways of living and new types of organisations”.

At the apex of this new future is an increase in entrepreneurship, driven largely by the younger generation’s rejection of traditional notions of job security, and redefining ‘career success’. Being on the cusp of Gen X and Gen Y, my peers and I can certainly relate to this new outlook. Of course Malone has some especially notable stats to back this up;

“The most compelling statistic of all? Half of all new college graduates now believe that self-employment is more secure than a full-time job. Today, 80% of the colleges and universities in the U.S. now offer courses on entrepreneurship; 60% of Gen Y business owners consider themselves to be serial entrepreneurs, according to Inc. magazine. Tellingly, 18 to 24-year-olds are starting companies at a faster rate than 35 to 44-year-olds. And 70% of today's high-schoolers intend to start their own companies,
according to a Gallup poll.”

America’s future, it would seem, is in the very capable hands of Gen Y. Being from the Asian Subcontinent, I couldn’t help but turn to India, whose future may also similarly rest on the fruits of entrepreneurship to drive bottom-up change. This is a country that now celebrates its ‘demographic dividend’ and has one of the youngest populations in the world with a median age of 23. This and the degree of entrepreneurship activity is the single most important armour that India has in its race to catch up with China. Sadly, my
statistic gathering isn’t quite as skilled as Malone’s and dates back to 2003; according to the Global Entrepreneurship Monitor report, 12.5% of the total Indian working population was involved in opportunity based ventures versus 5.5% for that of China.

Travel to India and you will be more than likely to come across a young entrepreneur and many who understand what is involved in launching a business venture. Personally I know cousins who have either started businesses or are being groomed (via international business schools) to do so and peers who have started their second or third venture.

It helps that India has notable icons in the Ambani brothers or Lakhsmi Mittal. Thankfully Britain is certainly not short of high profile entrepreneurs either. The likes of Richard Branson and Alan Sugar head up the old school while younger men like Simon Nixon (Co-founder of Moneysupermaket Group) may provide inspiration for Gen Y here in the UK.

The business schools too have caught up. Where once classes on entrepreneurship may have been on the periphery of an MBA programme, today they seem to take more centre stage. I recently attended an open evening at one of London’s business schools and was inspired to find that a notable share of attendees reported that starting a business venture was their reason for considering an MBA. For its part, the school
offers heavily subscribed courses on entrepreneurship and access to several entrepreneurs through chairs, boards and alumni.

The main speaker for the evening was a senior student and budding entrepreneur who had, with three of his fellow pupils, started a social enterprise company and was in the midst of approaching venture capitals for funding. Impressive!

Generation Y are embracing entrepreneurship and also the idea of doing something socially meaningful. And while progress through the current murky recession may be slow at times, now may be the best time to encourage young talent, embrace innovation, gather your hope and make way for a new and brighter future.

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And finally...  News emerged that a Kenyan man has offered 40 goats and 20 cows for Chelsea Clinton’s hand in marriage. By African standards, that is supposedly a very handsome and generous offer. Hillary Clinton has promised to “convey this very kind offer” to her daughter. I can see the frenzy ahead. Surely it’s only a matter of time before another eligible man matches the offer and throws in five camels and an emu!

Have a good week.

Aparna Ram
Junior Investment Manager
Seven Investment Management Limited

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This article represents a personal and light-hearted view from Director, Justin Urquhart Stewart of Seven Investment Management Limited, and is based on current financial news and events around the world. Its content should not be used for investment purposes and you should contact an independent financial adviser before making any investment or financial decision. Seven Investment Management Limited is authorised and regulated by the Financial Services Authority. Member of the London Stock Exchange. Head office: 23 Austin Friars, London EC2N 2QP. Telephone 020 7760 8777. Registered in England and Wales number 4092911. Registered office: 3 More London Riverside, London SE1 2AQ.