You’re never too old to become your own boss, it seems. All over the world there has been an increase in people aged 50 and over setting up their own businesses.
In the United States, the highest rate of business start-up activity is among those aged 55-64. Japan is reporting people aged 60-plus now comprise over one third of new entrepreneurs. In the UK, “third age” entrepreneurs are responsible for over a quarter of new start-ups.
Similar trends have been observed in Australia, and there is also evidence businesses started by so-called “senior entrepreneurs” may have a higher survival rate than those started by younger people. Why is this happening?
New Zealand lacks comparable detailed data, but similar patterns are evident. To find out more about what’s happening here we drew on 20 in-depth interviews with people who had started new businesses after the age of 50.
Conducted as part of Massey University’s “Maximising Workforce Participation for Older New Zealanders” programme, our interviews suggest people’s motivations don’t fall neatly into the categories proposed in the existing literature.
The conventional view has been people are either “pushed” into entrepreneurship through redundancy, age discrimination or forced retirement, or “pulled” by the prospect of business opportunities, potential profitability, greater freedom and flexibility.
This is too simplistic and doesn’t reflect the diversity of people’s experience. Motives are often mixed, complex and overlapping. But there were some consistent themes.
We identified five broad “entrepreneurial orientations” to describe the process of starting a business for the first time later in life.
Opportunity takers: for this largest group of interviewees, opportunities arose in different ways but often reflected their backgrounds and work histories.
Some created their own opportunities, while others were offered an opportunity they embraced. This could 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 wanted to make.
Starting a business was not an end in itself, rather they were motivated by a desire to help others, save the planet or contribute to the public good. For example, a highly experienced nurse aimed to offer self-help workshops for women; an engineer became interested in developing green energy technology.
Direction changers: people in this group recognised they wanted change in their work. All had been in professional roles but a combination of self-awareness, insight and life-stage factors had them asking, “do I want to be doing this for the foreseeable future?”.
A new business offered the opportunity to use their skills and experience in fresh fields. A theatre nurse retrained as a counsellor; a man who had experienced business failure and redundancy resurrected his interest in painting and is a successful artist at the age of 70.
Needs must: this group had faced unsatisfactory work situations and creating a business seemed the best option to generate income. Factors such as redundancy, office politics and health setbacks triggered the decisions.
Even if they’d never before contemplated being entrepreneurs, starting a business, while challenging, was a silver lining and offered new prospects.
Investors: members of this small group had backgrounds in business. Their primary driver for establishing new enterprises was financial, building on their acquired skills and knowledge.
Unlike the others interviewed, they undertook extensive risk analysis and professional advice before pursuing their business opportunity.
Encouraging older entrepreneurship
Our interviewees do not exhibit the recognised “entrepreneurial” motivations of innovation, growth and maximising profits. Many were not purely economically driven, but often motivated more by personal well-being and altruism.
We feel there are both social and economic benefits in the trend towards senior entrepreneurship. Meaningful and appropriate work is beneficial to personal well-being. For individuals, it provides a sense of self-worth, accomplishment and social inclusion.
And there are benefits to society when older people have the opportunity to contribute their skills and experience as entrepreneurs and mentors, helping to break down ageism.
Increasing economic opportunities for older people will also contribute to economic and business growth, and better investment in human capital and institutional knowledge in mixed-age workforces.
It can also help offset the costs of an ageing population through increasing tax revenue and reducing older people’s need for support services.
As a society, we need to encourage and support this trend towards more older people starting businesses as we increasingly live longer and healthier lives.
Geoff Pearman, managing director of Partners in Change and Associate Researcher at Massey University’s Health and Ageing Research Team, co-authored this article.