The under-30 crowd may be the early adopters of many of the new gadgets in our lives - and the young techies who quickly became billionaires producing those toys may grab all the headlines - but a new study reveals most U.S.-born technology and engineering company founders are actually middle-aged, well educated and hold degrees from a wide assortment of universities.
In fact, the Ewing Marion Kauffman Foundation and researchers at Duke and Harvard universities discovered twice as many U.S.-born tech entrepreneurs start ventures in their 50s as do those in their early 20s. Further, while highly ranked schools are overrepresented among start-ups in the survey, 92 percent of U.S.-born founders graduate from non-Ivy League universities, according to the study, Education and Tech Entrepreneurship. The study analyzed U.S. engineering and tech companies founded from 1995-2005, representing the most current decade of data.
How does this affect state and local policies to encourage tech entrepreneurship?
“Probably the most compelling fact in the study is that advanced education is critical to the success of tech startups," said Robert Litan, vice president of Research and Policy at the Kauffman Foundation.
U.S.-born engineering and tech company founders are overwhelmingly well educated. While there are significant differences in the types of degrees these entrepreneurs obtain and the time they take to start a company after they graduate, the study reveals a direct correlation between a founder’s education and company performance.
The study found start-ups established by founders with high school degrees as their terminal degree level achieved 61 percent less in average revenues and had 57 percent fewer employees than the averages for all start-ups in the sample. In contrast, founders with advanced Ivy League degrees had higher average sales and employment than the average – 17.5 percent and 31 percent higher, respectively.
Adding emphasis on retaining science, technology and engineering graduates in-state once they complete their degrees also seems to be a policy recommendation emerging from the report. Nearly half (45 percent) of the tech start-ups were established in the same state where U.S.-born tech founders received their education. Of the U.S.-born tech founders receiving degrees from California, 69 percent later created a start-up in the state. For Michigan, it was 58 percent; Texas, 53 percent; and Ohio, 52 percent. In contrast, Maryland retained only 15 percent; Indiana, 18 percent; and New York, 21 percent.
But the report suggests once grads are settled in, states will have to wait more than a decade for results: The average and median age of U.S.-born founders was 39 when they started their companies. Only about 1 percent of U.S.-born founders of tech companies were teenagers.
Education and Tech Entrepreneurship is available at: http://www.kauffman.org/pdf/Education_Tech_Ent_050108.pdf
