It seems you are never too old to be your individual boss. All over the world, the number of individuals aged 50 and over starting their very own businesses is growing.
In the United States, the highest rate of starting a business occurs among people aged 55-64. Japan reports that individuals over the age of 60 now account for more than a third of latest entrepreneurs. In the UK, ‘third age’ entrepreneurs are responsible for over a quarter of latest start-ups.
Similar trends have been observed in Australia, and there is also evidence that businesses began by so-called “older entrepreneurs” may have a higher survival rate than those began by younger people. Why is this happening?
New Zealand lacks comparable detailed data, but similar patterns are visible. To discover more about what’s happening here, we conducted 20 in-depth interviews with individuals who began their businesses after the age of fifty.
Conducted as a part of the Maximizing Workforce Participation for Older New Zealanders program at Massey University programour interviews show that individuals’s motivations do not fit into the categories proposed in the existing literature.
The conventional wisdom is that individuals are either “pushed” into entrepreneurship through layoffs, age discrimination or forced retirement, or “pulled” into entrepreneurship by the prospect of business opportunities, potential profitability, greater freedom and flexibility.
This is too simplistic and does not reflect the diversity of individuals’s experiences. The motifs are often mixed, complex and overlapping. But there have been some consistent themes.
Lots of motivation
We have identified five general “entrepreneurial orientations” to explain the means of starting a business for the first time later in life.
Those interested in the opportunity: for this largest group of interviewees, opportunities presented themselves in alternative ways, but often reflected their backgrounds and skilled histories.
Some created their very own opportunities, others received a probability and took advantage of it. It may be almost accidental – being offered a business loan or meeting someone with complementary skills.
Difference makers: those in the second largest group were characterised by a vision of the impact and contribution they desired to make.
Starting a company was not a goal in itself, the motivation was relatively the desire to assist others, save the planet or contribute to the public good. For example, a very experienced nurse wanted to prepare self-help workshops for women; The engineer got interested in the development of green energy technology.
Direction changers: people in this group decided that they wanted changes in their work. They had all been in skilled roles before, but a combination of self-awareness, insight and life stage aspects led them to ask themselves, “Do I want to do this for the foreseeable future?”
The latest company gave me the opportunity to make use of my skills and experience in latest areas. Theater nurse retrained as a counselor; a man who experienced business failure and layoffs revived his interest in painting and became a successful artist at the age of 70.
Needs must: this group found itself in an unsatisfactory skilled situation and starting a business gave the impression to be the most suitable choice to generate income. Factors similar to layoffs, office politics and health setbacks contributed to the decision.
Even if they’d never thought about becoming entrepreneurs before, starting a business, while difficult, was comforting and offered latest perspectives.
Investors: members of this small group had business experience. The primary factor determining the establishment of latest enterprises were financial issues, based on acquired skills and knowledge.
Unlike other interviewees, they conducted detailed risk evaluation and skilled advice before pursuing business opportunities.
Encouraging entrepreneurship among older people
Our interlocutors do not show recognized “entrepreneurial” motivations for innovation, development and profit maximization. Many of them weren’t motivated solely by economic considerations, but were often motivated more by personal well-being and altruism.
We consider that the trend towards senior entrepreneurship brings each social and economic advantages. Meaningful and relevant work is useful to non-public well-being. It provides individuals with a sense of self-esteem, achievement and social inclusion.
The community advantages when older people have the opportunity to contribute their skills and experience as entrepreneurs and mentors, helping to interrupt down age discrimination.
Increasing the economic opportunities of older people will even contribute to economic growth and entrepreneurship, in addition to higher investments in human capital and institutional knowledge among employees of all ages.
It can even help offset the costs of an aging population by increasing tax revenues and reducing older people’s need for support services.
As a society, we’d like to encourage and support this trend of more older people starting businesses as we live longer and healthier lives.