I am very proud to be a trustee of Prime Cymru (The Prince’s Initiative for Mature Enterprise in Wales) which was founded by HRH Prince Charles in 2002 to provide practical support to people aged 50 and over who want to become and remain economically active.
It not only supports people back into employment but also helps older people to establish new businesses, providing resources, mentoring and support to those interested in creating a new venture.
And this support is vital with interest in self-employment by older people increasing.
In fact, research published by Barclays earlier this week showed that the number of businesses run by people aged over 55 has increased by more than 63 per cent over the past decade as compared to a 23 per cent growth for those run by 25-34 year olds. And those aged over 65 recorded a 140 per cent increase in entrepreneurship and self-employment.
Given this, I was particularly interested to read a special report from the Global Entrepreneurship Monitor (GEM) which examined older people’s involvement in entrepreneurship around the World.
This includes not only starting and running their own business but also as entrepreneurial employees, social entrepreneurs and informal investors.
From analysing data from 1,540,397 adults involved in entrepreneurial activity in 104 countries from 2009 to 2016, the study compared senior (50-64 years old) and older (65-80 years old) individuals with young (18-29 years old) and mid-aged (30-49 years) adults.
The results were fascinating to say the least. For example, despite years of personal and work experience, older individuals have the lowest confidence in their own ability to start and run a business although they have a higher willingness and appreciation of risk.
It was also unexpected that knowing an entrepreneur and being inspired by such an individual is less frequent amongst older people with young and mid-aged individuals are almost twice as likely to have personal contact with those starting a new business.
Given this, it is not surprising that levels of entrepreneurial intention start to decline sharply at fifty years of age with seniors half as likely to consider starting a business compared to those mid-aged adults. It is also worth noting that those older individuals with the highest income brackets are twice as likely to express entrepreneurial intentions compared to those in the lowest income category although there is no influence of income within the younger age brackets.
For those who move from an intention to actually starting a business, age also has a strong influence and whilst start-up rates for young and mid-aged individuals are similar, there is a sharp decline in early-stage entrepreneurial activity after the age of fifty which follows the same pattern as for entrepreneurial intention.
Similar to young and middle age adults, older people are pulled into entrepreneurial activity by opportunity although seniors have a higher rate of necessity entrepreneurship i.e. forced to start up their business.
Of particular interest is the finding that older adults are slightly more likely to be social entrepreneurs than those in the other three age groups, which is an important finding for policymakers (and groups such as Prime Cymru) that may wish to focus support in this area to help those people who want to start a new venture with a social or community perspective.
In terms of discontinuing the business, older and more senior entrepreneurs are more resilient in continuing their firms than younger people.
Not surprisingly, retirement is the most frequent reason for stopping amongst older people with a third of them quoting this as why they exit their business. Indeed, problems with profitability and accessing finance is less of a problem and suggests that perhaps the focus of support agencies should not be on traditional business support but on ensuring that succession planning creates a future for those businesses that may end with the exit of the older entrepreneur.
If we examine gender then entrepreneurial intentions are lowest among senior women
compared to the other three age groups, with fewer than seven women expressing the intention to start a business for every ten men in this age group.
More relevantly, they also show the highest rates of necessity motivation in starting a new business which again suggests that a greater understanding is needed of services which encourage and support female older entrepreneurs into business.
Finally, by becoming business angels who invest in other entrepreneurs, older people are a vital source of funding for new firms. And whilst they have the same frequency of informal investment as other age groups, they do invest more money than young adults.
What is most interesting is that a close personal relationship between investor and recipient is an important criterion for senior and older investors with more than half of informal investors in these age groups supporting close family members. It suggests that there may need to be a closer look at how the “Bank of Grandad and Grandma” could be a vital source of funding for new businesses, especially those established by younger people.
Therefore, there is clearly potential to improve entrepreneurial intentions and activity amongst older people if the right polices and practice are put into place. Certainly, they are an under-represented resource for greater economic activity and more needs to be done to ensure that such individuals can make a worthwhile contribution to a more entrepreneurial society whatever their age.