The number of older adults who are self employed outweighs that of young adults suggesting that people of 50 years and older still have a significant role to play in economies around the world – according to a new report from the Global Entrepreneurship Monitor (GEM).
The GEM Special Report on Senior Entrepreneurship released last Friday draws on data collected between 2009 and 2016 on entrepreneurial activity in 104 countries. The sample comprises 1 540 397 adults aged 18 to 80 years old across five regions of the world – sub-Saharan Africa (SSA), Middle East and North Africa (MENA), South East Asia (SEA), Latin America and the Caribbean (LAC), and the European culture countries (ECC).
Entrepreneurial success and prosperity has no age limits. While the traditional perception of entrepreneurship is that it is a young person’s endeavour, the data is showing us that, in many aspects, older people are a significant entrepreneurial force. But this segment is largely an overlooked and undervalued resource.
According to the report, 18% of adults between the ages of 50 and 64 and 13% between the ages of 65 and 80 are self employed compared to just 11% of adults between the ages of 18 and 29. Eighteen percent of “middle-aged” entrepreneurs (aged 30 to 49) are self employed. Yet entrepreneurship programmes and support are, by and large, geared towards younger segments. The report suggests that specialized support for older entrepreneurs could help unlock benefits for economic stability – especially in economies where senior entrepreneurship is underrepresented.
Regionally, senior entrepreneurship (i.e. those aged between 50 and 64) in terms of both entrepreneurial intention (defined as the percentage of the adult population who intend to start a business within the next three years) and early-stage entrepreneurial activity (defined as those who have started and are running a business that is less than 42 months old) is highest in Sub-Saharan Africa (35%/19%), Latin America and the Caribbean (27%/14%), and MENA (23%/7%) and lowest in the ECC (6%/4%). Just 14% of seniors in South East Asia report entrepreneurial intentions and 9% are actually engaged in an early staged venture. These numbers are consistent with GEM findings that entrepreneurship levels are typically higher in factor-driven economies where the types of businesses started often require lower skills and less money to get off the ground.
Senior entrepreneurs bring with them a host of benefits – economic, social and environmental – that the report labels “golden dividends”. These include relieving pressure of an aging population on the state and job creation.
Every older adult who is self employed is less likely to place a financial burden on society and to contribute to the economy of that country through the payment of taxes and by remaining economically active. Additionally, senior entrepreneurs are marginally more likely than their younger counterparts to employ more than five people so they are not only creating jobs for themselves but for others as well.
Additional economic benefits come from the fact that senior and older people who act as informal investors also tend to invest considerably more money compared to younger adults. Almost two thirds (63%) of older business angels invest more than the median of all investments. And elderly entrepreneurs across all phases of entrepreneurial activity report substantially higher levels of satisfaction with both their life and their job, compared to elderly routine employees. This translates into better health and fewer demands being placed on social service/entitlement programmes.
These findings have particular significance for economies struggling with the perceived burden of an aging population.
With approximately 16% of the world’s population 55 or older, the issues of entrepreneurial activity at these more advanced ages directly affect more than a 1.2 billion people. The world is beginning to understand how senior entrepreneurs with their wealth of work and life experience, deep networks, and eagerness to remain productive are a huge untapped resource.
It is time that we stopped thinking about this demographic as a liability and instead recognise them as assets and work across sectors to help break down barriers to unleashing their potential. It is imperative for governments to create innovative, inter-agency frameworks to marshal resources, catalyze strategic thinking, prioritize new policy and create actionable research to advance this movement.
Mike Herrington is the Executive Director of GEM and Thomas Schøtt is a Professor of Entrepreneurship at the University of Southern Denmark.