Thursday, July 29, 2010

Aging Societies and the Coming Entrepreneurial Boom

The Kaufman Foundation published, some time ago, a great report by Dane Stangler, The Coming Entrepreneurship Boom (June 2009).


Contrary to popularly held assumptions, it turns out that over the past decade or so, the highest rate of entrepreneurial activity belongs to the 55-64 age group. The 20-34 age bracket, meanwhile, which we usually identify with swashbuckling and risk-taking youth (think Facebook and Google), has the lowest rate. Perhaps most surprising, this disparity occurred during the eleven years surrounding the dot-com boom—when the young entrepreneurial upstart became a cultural icon.

In every single year from 1996 to 2007, Americans between the ages of 55 and 64 had a higher rate of entrepreneurial activity than those aged 20-34.

For the entire period, the 55-64 group averaged a rate of entrepreneurial activity roughly one-third larger than their youngest counterparts.

These trends seem likely to persist: in the Kauffman Firm Survey, a longitudinal survey of nearly 5,000 companies that began in 2004, two-thirds of firm founders are between the ages of 35 and 54.3

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 25.4”.

The punch line:

« Given the shifting age distribution of the country, the continued decline of lifetime employment and the experience and tacit knowledge such employees carry with them, and the effects of the 2008-2009 recession on established sectors of the economy, we may be about to enter a highly entrepreneurial period. »

Read the paper here.

My conclusion: Farewell to the ageing society pessimism.

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