Senior entrepreneurs are Australia’s fastest-growing segment of entrepreneurs, despite facing significant barriers including ageism and a lack of financial support, according to new research from the Swinburne University of Technology and Queensland University of Technology.
The research, funded by National Seniors Australia, studied more than 400 seniors through interviews, focus groups and online surveys. Key findings include:
- 34% of all young firms in Australia are now led by seniorpreneurs
- The average age of seniorpreneurs is 57
- Seniorpreneurs work about five fewer hours than younger entrepreneurs each week and have almost double the industry experience.
The research also found seniorpreneurs invest, on average, A$1.2 million more in their business than younger entrepreneurs, and their firms earn more than twice the profits.
More than a third of seniorpreneurs can be classified as “serial entrepreneurs” who start multiple ventures. The entrepreneurship rate of 8% for the 55-64 age group in Australia is 3 percentage points higher than the average for innovation-driven economies.
Our research also found seniorpreneurs are more capable of starting a business than their younger peers.
Attracted by work life-balance, they have more developed networks, better business experience, superior technical and managerial skills, and a stronger financial position than younger entrepreneurs.
But there are significant barriers in Australia for seniorpreneurs.
Many face a lack of financial support and insufficient information on how to run a business.
The research indicates that ageism barriers include declining health, financial disincentive, age discrimination, the opportunity cost of time, and lack of awareness about entrepreneurship.
There is also insufficient government support for current and aspiring seniorpreneurs, despite the high likelihood that helping people aged 50 and over to participate in business startups could increase workforce participation in Australia and reveal a new generation of entrepreneurs.
A global trend
Seniorpreneurship is becoming a global phenomenon. In the United States, nearly a quarter of new ventures in 2013 were started by those aged 55 to 64, according to the Ewing Marion Kauffman Foundation entrepreneurship think tank. Remarkably, Americans in that age bracket are starting businesses at a higher rate than those in their twenties or thirties.
The United Kingdom is also active in seniorpreneurship. Several policy initiatives are lifting its entrepreneurship activity and helping older people create their job. The UK’s PRIME initiative, for example, helped unemployed people over 50 find work through self-employment.
Australia, by comparison, lacks entrepreneurship policies and initiatives in the 50-plus market. Our governments tend to focus on younger entrepreneurs or on retraining older workers so they can apply for another job.
There has been little recognition of the potential of older Australians to participate in startups and turn them into larger businesses that employ people. Or of the need for older Australians to create their next job, not only apply it.
As the population ages and more workers are displaced by technology, a stronger culture of entrepreneurship is needed. It must not exclude older workers as they have knowledge, networks and access to resources that younger entrepreneurs often do not.
Over the years, senior entrepreneurs have been referred to as seniorpreneurs, grey entrepreneurs, latepreneurs, third-age entrepreneurs, and second-career or mature-aged entrepreneurs. But few local studies have studied them in detail or informed government policy.
Our research goal was to understand why mature workers choose self-employment as a late-career option and become “opportunity entrepreneurs” – as distinct from “necessity entrepreneurs”, older workers who are pushed or pulled into self-employment because they need a job or have to supplement their retirement income.
There is much more to it than an ageing population driving more Australians into older age brackets, and entrepreneurship rates in this group rising by default. Our research shows considerable interest among mature workers to pursue business opportunities.
About 80% of survey respondents significantly valued the non-financial benefits of self-employment, such as lifestyle and health preferences. For many, starting a business is a key to active ageing and extending their working life.
Intuitively, this makes sense. As people lead longer, healthier lives, more will feel more capable of launching a startup later in life than in previous generations.
A changing workforce will also drive higher rates of seniorpreneurship as more people move between full-time work and self-employment. Starting a business will become a viable option – perhaps the only option - for a growing number of mature workers who are made redundant and cannot find comparable employment elsewhere.
Moreover, technology is making it easier and cheaper to start businesses and the ageing population represents an opportunity for seniorpreneurs who understand the needs of this market and can turn their problems into opportunities.
Much can be done to help seniorpreneurs. Our research found governments can increase awareness of the feasibility of seniorpreneurship, and enhance motivations, skills and opportunities for it.
Governments could also establish legislative support mechanisms for seniorpreneurship, and provide specialist advice and information.
Targeting training and education for nascent and current seniorpreneurs, mentorship activities and networking facilities are other opportunities. Schemes that help seniors access capital to start ventures, link young and old entrepreneurs, and incentivise seniorpreneurs, are other among other recommendations.
Governments must act. Assuming entrepreneurship is mostly a “young person’s game” is a form of ageism Australia cannot afford.