Contrary to what most of you might guess, the highest rate of entrepreneurial activity over the last few years is not Gen-Y young upstarts, but Baby Boomers in the 55-64 year age group. In fact, according to a study by the Ewing Marion Kauffman Foundation, these Boomers are actually driving a new entrepreneurship boom.
Some people are calling entrepreneurship the ‘new mid-life crisis’ for the 76 million-strong demographic once thought to be over the hill. Partially due to the economy, but also due to longer, healthier lives and changes in job tenure, 62% of working Boomers are now expected to stay in the labor force, with real power and influence, for at least nine more years, to 2020.
Here is a summary of indicative facts from the earlier study referenced, an update published last year, and others. These indicate that the correct icon for an entrepreneur may now have gray hair, rather than the warm glow of youth:
- The number of Baby Boomers starting a business from 1996 to 2011 rose nearly 7 percent, while the start-up rate by those aged 20 to 44 fell about 5 percent.
- In every single year from 1996 to 2010, Boomers between the ages of 55 and 64 had a higher rate of entrepreneurial activity than Gen-Y, aged 20–34.
- These trends seem likely to persist. In the Kauffman Foundation Survey of nearly 5,000 companies that began in 2004, nearly two-thirds of the founders are now between the ages of 35 and 54.
- Additionally, Kauffman research has revealed that the average age of the founders of technology companies in the United States is a surprisingly high 39 - with twice as many over age 50 as under age 25.
- While people under 30 have historically jumped from job to job, another striking development has been a deep drop in the incidence of ‘lifetime’ jobs among men over age 50.
- With longer life expectancies and greater health in later life, older generations are moving to start new firms -- and mentor young entrepreneurs. One new incentive is the falling transaction costs and barriers to entry for entrepreneurs of every age.
- Half of the Internet users aged 50-64 use social media now, an 88 percent growth from the previous year. Social networking penetration by Boomers has now caught up with the other age groups, reaching about 80% across the board.
- The immigrant rate of entrepreneurial activity declined slightly in 2009, but remained substantially higher than the native-born rate. Business-startup rates in America increased the most in the Midwest and South.
In addition, the Boomer demographic is also creating a slew of new market opportunities, including improved healthcare facilities, construction of senior-friendly facilities, and technical support for seniors, by seniors. What all of this means is that boomers will have more impact and power in the marketplace for a lot longer than most people expected.
Since entrepreneurship is a key driver of economic growth, this should bode well for America, and for world economic growth as well. In terms of job creation, innovation, and productivity, entrepreneurs drive growth. Many Boomers have the purchasing power and become enthusiastic early adopters who help lead the way. They are becoming the new early adopters.
Of course no one has any idea what the next big thing will be, but more often than not innovation comes from entrepreneurs. If you are one of the Baby Boomers who wants to redefine retirement, now is your chance for real impact. Find an opportunity you understand, follow your passion, and join the entrepreneurial majority.