We are living longer than ever in today’s world and many are not sure what to do with the extra 20 – 30 years for which they did not plan. The situation is historically unique, creating a world where seniors are designing new lives for themselves in their later years. The economic impact of people working longer and starting entrepreneurial ventures is making a significant economic impact.
The media continues to depict entrepreneurs as tech-savvy innovators in their early 20s, but the Kauffman Index of Startup Activity shows the highest rate of entrepreneurial activity in the US is in the 55 to 64 age group. This trend has been going on for 15 years and seems to be gaining momentum. As approximately 10,000 people turn 65 each day and one in five Americans will be 65 or older by 2030, we should continue to see older adults starting new ventures late in life. A 2014 Merrill Lynch study, Work in Retirement: Myths and Motivations, demonstrates seniors are choosing not to go the traditional retirement route and instead start new businesses.
The aging population is the world’s fastest-growing sustainable natural resource. Experience is a currency, and knowing how to bridge the gap between sectors and generations is the new competitive advantage.
Senior entrepreneurship advantages
Entrepreneurs who are older and wiser bring unique value to start-ups. Their strong work ethic and vast experience is important for success. In addition, instead of approaching new problems with old solutions, their past experience provides insight into discovering new ways to make unlikely connections between ideas and insights.
Senior entrepreneurship significantly impacts the economy in other ways too. Remaining engaged later in life provides important health benefits for many. Better health leads to fewer demands on social service and entitlement programs. And, as they pursue new work opportunities, they continue to contribute to social security and Medicare through taxes. At the same time, those creating new businesses create jobs for themselves and others which boosts both the local and national economy.
As a result, older entrepreneurs are changing the stereotype of senior citizens from a negative to a positive. This trend is not just in the U.S. Individuals aged 50+ in the UK, Ireland, and Australia launch a significant number of start-ups as well. Senior enterprise is considered essential in the EU to achieve its 2020 economic strategic growth goals. Japan, which has the largest and fastest growing aging population in the world, created an initiative called, “Agenomics,” to harness the knowledge and resources of the older population. The Japanese government supports the development of university innovation centers, (public/private) business incubators, and co-working spaces for startups and finance agencies designed to support older entrepreneurs.
Good reasons to postpone retirement
While some seniors decided to enter the entrepreneurial space to explore a new opportunity, others perhaps wanted to continue with their traditional employment but lost their jobs. Many of these baby boomers lost money on investments since the Great Recession, and say they are not in the financial shape they thought would be the case at this point in their lives. According to a PEW research report, among those baby boomers aged 50 to 61 approaching the end of their employment, six in ten say they may have to postpone retirement. The additional life expectancy coupled with declining income creates a difficult situation where many are not financially able to retire. The Northwestern Mutual’s 2018 Planning & Progress Study shows most Americans are concerned about having significant savings for retirement. In fact, 21% of Americans have nothing at all saved for the future, and another 10% have less than $5,000 in the bank.
Elizabeth Isele, CEO of Global Institute for Experienced Entreprenership said it best;
“We, as a society, need to stop all our negative age bias. The age wave is not a ‘silver tsunami’—it is a silver lining, yielding golden dividends.”
Seniors are not liabilities . In contrast, they are assets whose experiences and skills can lead to economic growth worldwide. The paradigm for aging and retirement is changing; older adults are redefining life and work across generations, cultures and geographic boundaries.