By Rieva Lesonsky
As I recently told you, the birthrate is climbing once again—3.9 million babies were born last year. As Millennials start entering their prime years for getting married and having babies (the oldest Millennials turn 33 this year), this trend is sure to continue. Once again, this baby-boom-in-the-making will create lots of opportunities for entrepreneurs.
In fact, according to Bloomberg Businessweek there’s already a shortage of daycare options for young parents. This isn’t as easy a startup as it used to be. The magazine reports daycare is now a “broken market” due to the rising cost of daycare and stagnant wages. Businessweek says a lot of states ended daycare subsidies back during the Great Recession and haven’t reinstated them.
As a result more Americans are staying at home with their kids (in 2012, 29 percent of moms stayed home with their kids, up from 23 percent in 1999—and there are now 2 million stay-at-home dads). In other households, relatives other than parents are watching the kids—this totaled 27 percent of all childcare in 2011 (the latest year for which stats are available).
Despite the dire state of the daycare industry, there could be a bright spot for entrepreneurs. It’s about providing daycare at affordable prices (price sensitivity is the primary reason parents are opting to stay home with their kids).
Marcy Whitebook, the director and founder of the Center for the Study of Child Care Employment at UC Berkeley, told Businessweek, “We now have sort of 21st century expectations, and we still have, in some ways, a 20th century system.”
This should be a clarion call to entrepreneurs to enter an industry with a growing demand and come up with innovative—and affordable—solutions.