Is the love affair over?

The love affair between millennials and startups seems to have cooled. The number of founders under 30 has dropped to the lowest level in a quarter-century. The magazine The Atlantic looked into how this happened, and we’ll be talking about it in the live talkshow Stadsleven: ‘Start up, Fall down’ on Nov. 26th in Pakhuis de Zwijger.

That was a ruthless headline in the magazine The Atlantic late last year: ‘Startups aren’t cool anymore’. And even if they are cool, millennials are financially not in a position to take the risk that startups involve, observes author Stephen Harrison. He quotes the founder of the Economic Innovation Group (EIG): ‘Millennials are on track to be the least entrepreneurial generation in recent history.’ A survey by EIG in 2016 showed that more millennials believed they could have a successful career by staying at one company and attempting to climb the ladder, than by founding a new one.

An analysis by the Wall Street Journal of Federal Reserve data in 2015 revealed that the share of people under 30 who own a business, has fallen to the lowest point in a quarter of a century. In spite of all the angel investors and VC and private equity, most people start with their savings or with loans from family and friends. But during the economic crisis, these sources dried up and student debt increased. In the US, the “startup rate”— new firms as a portion of all firms —fell by nearly half between 1978 and 2011.

The newspaper quotes a 25-year-old who worked on two startups in college while getting his master’s in engineering. His worry: the broad use of the Web “raises the level of skills that are required to establish a business” because it vastly expands the number of potential competitors. He now works for a consumer-electronics company.

There is also more competition from other countries. In 2017, Asian investors put nearly the same amount into tech start-ups as their U.S. counterparts. Of the top five global VC deals in 2017, three were Chinese companies.

But maybe there is a silver lining. Economist Michael Sadler of the University of Texas at Austin is concerned about the rising concentration of start-up investment in a small number of super-performing regions such as Austin, New York, and Silicon Valley. As with politics, it appears the geography of U.S. venture capital and economic growth has become increasingly polarized.

Will it work the other way? Will a decline in the number of startups also diminish the polarization? Not so sure.