Myth of the Millennial Entrepreneur.

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“Millennials are on track to be the least entrepreneurial generation in recent history,” John Lettieri, the co­-founder of the Economic Innovation Group,testified last week before the U.S. Senate. The share of people under 30 who own a business has fallen by 65 percent since the 1980s and is now at a quarter-century low, according to a Wall Street Journal analysis of Federal Reserve data.

These statistics go against the typical media portrayal of an American start-up: a phone app built in an open-plan office with dedicated lanes for 22-year-old executives on hover boards. Businesses like American Express have declared that “Millennials Could Be the Most Entrepreneurial Generation Ever” and Britt Hysen, the editor-in-chief of MiLLENNiAL magazine, claims that “60 percent of Millennials consider themselves entrepreneurs, and 90 percent recognize entrepreneurship as a mentality.”

Young people very well may lead the country in entrepreneurship, as a mentality. But when it comes to the more falsifiable measure of entrepreneurship as anactivity, older generations are doing most of the work. The average age for a successful startup-founder is about 40 years old, according to the Kauffman Foundation, a think tank focused on education and entrepreneurship. (In their words, one’s 40s are the “peak age for business formation.”)  The reality is that the typical American entrepreneur isn’t that hover-boarding kid in a hoodie; it’s his mom or dad. In fact, the only age group with rising entrepreneurial activity in the last two decades is people between 55 and 65. So, why hasn’t Millennial entrepreneurship kept pace with either media expectations or past generations?

The answer begins with more debt and less risk-taking. The number of student borrowers rose 89 percent between 2004 and 2014, as Lettieri said in his testimony. During that time, the average debt held by student borrowers grew by 77 percent. Even when student debt is bearable, it can still shape a life, nudging young people toward jobs that guarantee a steady salary. Entrepreneurship, however, is a perilous undertaking that doesn’t offer such stability. There is also some evidence that young people’s appetite for risk-taking has declined at the same time that their student debt has grown. More than 40 percent of 25-to-34-year old Americans said a fear of failure kept them from starting a company in 2014; it 2001, just 24 percent said so.

The rarity of Millennial entrepreneurs doesn’t just deflate a common media myth—it could have lasting consequences for the competitiveness of the American economy. Although venture-capital investment has grown in the last decade, the majority of “startups” are really what most people consider “small businesses.” A new bodega, coffee shop, or small construction firm doesn’t seem like a radical act of innovation. But the government considers such companies to be startups, and they’re getting rarer as a handful of large firms dominate each sector of the U.S. economy. Three drug stores—CVS, Walgreen’s, and Rite Aid—own 99 percent of the national market. Two companies—Amazon and Barnes & Noble—sell half of the country’s books. If it is not quite a new Gilded Age for America’s monopolies, it is certainly a new dawn for its oligopolies.

That’s a problem, because an economy dominated by older firms tends to be less efficient. Companies that are 10 or more years old now account for nearly half of all firms and employ more than 80 percent of workers; both of those figures are up more than 10 percentage points since 1990. The growth of these industrial giants has squeezed out smaller competitors. Even in tech, the sector synonymous with innovation, the frontier is closing. Facebook owns four of the five most downloaded apps—Whatsapp, Messenger, Facebook, and Instagram. It tried to buy the other, Snapchat. All of the 20 most downloaded apps, including Uber, Spotify, and Pinterest, were founded since 2012, according to Nomura research.

There is, however, cause for optimism. First, Gates and Zuckerberg notwithstanding, most successful founders begin their careers as devoted employees. Their start-up ideas germinate in office daydreams before blossoming into something worth pursuing outside the comforts of the company. Second, the slow recovery has stalled some would-be entrepreneurs, but 2015 was one of the strongest years this century for job and wage growth. Third, the next generation may be better prepared to start a company (or, at least, better educated in an academic setting about the challenges of such an endeavor). The number of entrepreneurship classes on college campuses has increased by a factor of 20 since 1985, so it’s possible that there are thousands of future startup founders who are currently employees sifting through ideas for their own firm. The Millennial generation may be like a dormant volcano of entrepreneurship that will erupt in about a decade.

The media portrayal of young people casting off the shackles of employment to start their own companies is, for now, an illusion. But unlike other popular illusions in the press, rising Millennial entrepreneurship is a vision of the future that is worth rooting for.