Originally posted on 9 Jan 2014
“Ageing workforces and the increasing dependency ratios found in developed economies attract an increasing amount of policy interest and research towards older workers, including the promotion of entrepreneurship (that is business start-ups and self-employment as a late-career alternative”, says the opening section in last year’s background paper for the OECD Centre for Entrepreneurship, SMEs and Local Development.
There are two main reasons for this
One is the expectation that as populations age, the number of older business founders will increase. Older individuals are both ‘pulled’ and ‘pushed’ to self-employment. The ‘pull’ argumentation suggests that mature individuals with the experience, know-how and financial means for entrepreneurship choose self-employment as a late-career option, for example because it is a flexible alternative to organisational employment that offers an attractive work-life balance, or because it generates additional income in or for retirement that allows the individual to maintain their preferred lifestyle.
- The other reason for the increasing topicality of senior entrepreneurship is that the promotion of entrepreneurship in older age segments is a prospective policy option to prolong the working lives of older people, reduce older-age unemployment, increase the social inclusion of older individuals and, to a lesser extent, enhance the innovative capacity of the economy by employing the human and social capital of mature individuals through new innovative start-ups.
The number of “olderpreneurs” is growing. In 2009, more than 1.5 million people in their 50s were registered as being self-employed. Now, that figure stands at about 1.77 million — an increase of more than a quarter of a million.
About one-fifth of those aged above 50 are self-employed, a higher proportion than in any other age group.
Indeed, most entrepreneurs are in their 50s, not their 20s. They are more successful too: More than 70 per cent of businesses started by people in their 50s survive for at least five years, while only 28 per cent of those started by younger people last that long.
Enterprises started by seniors tend to be smaller and in the service sector, catering or producing craft items. A quarter of “olderpreneurs” established their businesses after redundancy and 12 per cent started after retirement.
Professor of Entrepreneurship at the University of Glasgow Ron Botham carried out research into the motives for older people to set up businesses. “Having worked for someone else, many older people think they can run a business better than their boss and, nowadays, people in their 50s and 60s are … not badly off, so many have the start-up capital to do it,” he said.
In the UK, people above the age of 50 in the United Kingdom get help from the Prince’s Initiative for Mature Enterprise to start their own business. The Prince’s Initiative for Mature Enterprise is the only national organisation dedicated to providing everyone over 50, who is unemployed or under threat of redundancy, with the support to achieve financial, social and personal fulfilment through sustainable self-employment. It was established by HRH The Prince of Wales in response to letters he was receiving from people desperate to work but unable to find anyone to employ them – because of their age. Since 1999, they have helped more than 25,000 people over 50s who are unemployed or facing redundancy, to explore self-employment. They offer support through free training courses, mentoring support, networking events and online resources.
There are lots of case studies on several websites including this one, here.
The Prince’s Initiative somewhat mirrors the help given to youngsters at the other end of the scale – The Princes Trust. That organisation gives practical and financial support to disadvantaged young people, developing key workplace skills such as confidence and motivation. We work with 13 to 30-year-olds who have struggled at school, have been in care, are long-term unemployed or have even been in trouble with the law. For a time, I was a Prince’s Trust Adviser – it’s very interesting work. The Prince’s Trust has helped more than 750,000 young people since 1976, and support 100 more each working day.
In the US, as you’d imagine, they have similar initiatives. With the advent of 20-30 additional years of life, today’s seniors are determined to add meaningful life to those years, to remain self-reliant, and to give back to their communities and their world. Research released by Civic Ventures and funded by MetLife Foundation shows that approximately 25 million people – one in four Americans ages 44 to 70 – are interested in starting businesses or non-profit ventures in the next five to 10 years. This does not mean that millions of seniors want to launch the next billion dollar IPOs. Of course some of them might, but many more opportunities exist in the small and even micro business arena. Other statistics are interesting:
- Approximately 25 million people – one in four Americans ages 44-70 – are interested in starting businesses or non-profit ventures in the next five to 10 years.
- More than 12 million of these aspiring entrepreneurs (48 percent) want to be encore entrepreneurs, making a positive social impact as well as a living.
- Most potential encore entrepreneurs (72 percent) expect to create local, small organizations employing up to 10 people.
There’s a free publication that I am making available on the Prince’s Trust (No. 695). Please email me if you’d like a copy.
I’d be interested to here from my readers on this: do you work with seniors planning to start a business or social enterprise? Are there particular issues involved – such as tight restrictions on bank lending etc? Drop me a message to mpollins@bizezia.com
He has written over 700 business publications (see Glossaries at https://onesmartplace.com/resources/glossaries/) and is editor of Better Business Focus (see https://onesmartplace.com/resources/better-business-focus-magazine). His Blog, on a wide range of subjects can be found at: https://onesmartplace.com/blog/
- Mysteries Galore - June 6, 2022
- Information about Telephone and Internet Banking - November 15, 2021
- Information about Falls: Why they happen and how to avoid them - November 15, 2021