If the splashy headlines are to be believed, artificial intelligence is already forcing new graduates into unemployment. That anxiety is not unfounded. Entry-level roles are disappearing, and economists have yet to agree on how deep or lasting AI’s impact on the labor market will be. But if we only assume the worst, we may be missing out on attractive opportunities for young workers. Baby boomer entrepreneurs are rapidly retiring without clear successors.
So if you’re struggling to find your place in the workforce of the future, or if college debt feels like a dicey gamble in the age of AI, consider building your credit and working your butt off with a business loan. The next chapter of your career may be the one you write.
No one should approach the AI situation lightly. We have heard the message of worker deaths before. Offshoring, immigration, and globalization are taking turns as everyday employment villains. Indeed, the impact of AI on the labor market may ultimately be even more dramatic. However, it is still in its infancy and is far from complete.
Meanwhile, the labor market is already adjusting. One visible change is an increase in entrepreneurship and the creation of small businesses as more Americans respond to uncertainty by taking on the challenge themselves. The instinct to build rather than wait may prove to be not just reactive, but exactly the right response to a changing economy.
And for those following their entrepreneurial instincts, changing demographics may provide the missing piece of the puzzle. Owners of existing businesses tend to be older. According to the Census Bureau’s annual business survey, more than half of U.S. employer businesses are already run by people age 55 and older. Project Equity points out that the 2.9 million businesses owned by baby boomers employ 32 million Americans and generate approximately $6.5 trillion annually.
It’s not clear what will happen to these vast numbers of companies. The Exit Planning Institute predicts that by 2033, approximately 4.5 million companies representing more than $14 trillion in assets will need to change jobs. But surprisingly, nearly 85% of businesses owned by boomers have no formal succession plan in place. Even if some of them closed without selling, the ripple effect on employment would be devastating. No AI required.
What if the bigger structural change wasn’t about algorithms stealing cubicles, but about older business owners turning off the lights for the last time? And what if that wasn’t a crisis, but a generational opportunity?
Rather than reflexively pursuing an expensive four-year degree, ambitious young Americans should consider owning and operating these businesses. Students and educators alike are increasingly aware that universities may be exaggerating the labor market value of degrees. It’s long been known that many jobs don’t require a four-year college degree. Economist Brian Caplan has argued that much of what universities provide is expensive signaling rather than practical skill-building.
Imagine if the threat of AI to entry-level jobs could help end the myth of expensive college. Instead of pursuing prestigious diplomas, more students may pursue practical two-year associate degrees combined with targeted micro-credentials that are directly applicable to running small businesses that need new owners right away.
As for policymakers, they need to resist large-scale responses, feel positive responses, and instead fix the real constraints that are holding back this transition. Today’s tax laws do the opposite of what the times required.
Just as some young workers need to be redirected from companies that neglect entry-level jobs, small business owners also need to invest in their training. These tend to be workers who will one day buy a business and fund a fulfilling retirement. Tax laws deny small businesses the ability to deduct training costs entirely as expenses, leaving that option primarily to large companies.
A practical step would be to immediately provide full funding for legitimate training, especially for small and medium-sized enterprises. So is reviewing regulations that may ease access to small business financing and unnecessarily hinder the spirit of young entrepreneurs.
Truly embracing entrepreneurship, creativity, and the skills that AI complements (rather than competes with) cannot be driven by governments alone. It requires a cultural shift. Leaning toward this change does not mean discounting the potential for AI disruption. This helps young people gain the skills and confidence to find their place, including taking advantage of opportunities left by retired entrepreneurs.
If you’re one of those young workers, consider small business loans, hands-on training, and the chance to be your own boss before taking out another $100,000 in student loans. America needs owners and creative leaders as urgently as it needs programmers. Small businesses need to thrive to stay in business. If this opportunity is missed, critics will predictably blame modern technology. If we embrace it, we may experience a renaissance of entrepreneurship.
Levana Shahfuddin is a Research Fellow in the Labor Policy Project at George Mason University’s Mercatus Center.
