The numbers of older entrepreneurs are growing on both sides of the Atlantic. This trend is in alignment with the lifestyle advocated by Sage Vita – to ensure a sound body and sound mind as we age so that we will maintain functional capacities throughout life course (i.e. to practice “active ageing”). With this foundation of soundness we will be able to engage with life and with society. Entrepreneurship is one dimension of that engagement. In recognition of this trend, I will start to provide information resources for the older entrepreneurs and will publish selected inspiring stories about their business and lifestyle. Read the first story here.
In the UK the level of self-employment in the 50-plus age-group is about 1 in 5, considerably higher than the levels across all ages. Reasons for the surge in “olderpreneurs” (a term coined by the media) include early retirement or enforced redundancy, the need to replenish saving, the demise of final salary pensions, and a fashionable desire to reinvent oneself in another guise preferably with a view to supplement the inadequate pension. Then there are people for whom money is not a major consideration. They just don’t want to retire; they want to continue to be engaged with society and the economy through business.
Older people can be entrepreneurs too
This trend is similar in the US where entrepreneurship is highly prized. In the popular American imagination, entrepreneurs are young and bold as exemplified by Bill Gates and Mark Zuckerberg, while old folks are set in their ways with no entrepreneurial ambition or energy and with little interest in the latest technologies and organizational ideas. But the reality is quite different. Increasingly older Americans are starting new business after their retirement. A recent AARP survey found that nearly one-quarter of the self-employed, which comprise a large share of small businesses, are 60 years or older. Another AARP survey found that 10 percent of wage earners planned to start a business after they retired.
Generally, however, many of the startups founded by older entrepreneurs are not the kind of job-generating gazelles that populate small business hotspots such as Silicon Valley, Boston’s Route 128, and the Austin tech hub. The older entrepreneur could be an aging accountant, a laid-off middle manager turned consultant, or an outsourced specialist. They are sole proprietors with a handful of employees at most. The ranks of these establishments swelled along with the high unemployment rates of the Great Recession.
Nevertheless, whether out of necessity or desire, older entrepreneurs have a number of competitive advantages. They are knowledgeable in their field and they have deep informal networks. Information technologies make it easier to work out of the home. Some older workers have been cherishing a dream, wanting to start their own business, and the time has come. Thus many different strands are feeding into the trend of older entrepreneurs.
Rise of older entrepreneurs is good news for all generations
The dark side of aging baby boomers is dominating America and European economic and political discussion. Yet beneath the surface is growing evidence that the ranks of older entrepreneurs will swell. The trend will not only make the Social Security and Medicare bills easier to pay, it will also boost the economy’s underlying entrepreneurial dynamism. That is good news for all generations, young and old alike.
The uptick in older entrepreneurs prompted AARP to get involved so its members “can pursue entrepreneurship as a means to generate income, boost financial security and assist others in meeting needs,” said Jean C. Setzfand, AARP’s vice president for financial security. But like many pursuing a “second act” enterprise, these older entrepreneurs don’t have all the business tools they need, so they are tapping into a new joint effort by AARP and the Small Business Administration to help people 50 and older learn about business plans, advertising and marketing, and social media. The two groups offer an “encore entrepreneur” mentoring services with numerous events around the country to link fledgling business owners with mentors and other resources. In the United Kingdom, AgeUk performs a similar role to AARP. I believe this is a growing and sustainable trend that will have a lasting impact on our lifestyle and society.