Over 50s emerge as entrepreneurs
New trends in entrepreneurial activity have been identified in a key report unveiled this month (July 2).
The Global Entrepreneurship Monitor (GEM) UK 2013 Report has found more people than ever before are starting a business beyond the age of 50 – a reversal of historically low entrepreneurial activity in this age bracket.
It also reveals that the UK outperformed European comparison countries such as France and Germany on almost all entrepreneurship indicators in 2013 and, while a dip in activity was recorded following a 2012 peak, levels still remained just above the longer-term trend.
Led by Professor Mark Hart of Aston Business School and Professor Jonathan Levie of the University of Strathclyde Business School, the UK Global Entrepreneurship Monitor Report measures and compares activity, attitudes and aspirations throughout England, Wales, Scotland and Northern Ireland, as well as France, Germany and the US. It also reports on wellbeing measures, business registration and funding sources.
The surge in the number of older entrepreneurs reflects a new trend in the UK's changing economy. From 2002 to 2008, entrepreneurial activity among the over 50s has had a long-run average of just four per cent – much lower than those in the 18-29 and 30-49 age brackets.
However, from 2008, the rate for over 50s has shown a marked increase – reaching its highest ever level of 6.5 per cent in 2013 and going against figures for the younger age brackets, which show a peak in 2012, followed by a decline 12 months later.
This increase among the over 50s applies to both men and women, although male rates were 'significantly higher' - and the research pinpoints that both sexes were launching their own businesses predominantly out of opportunity rather than necessity.
Professor Hart said, "The shake-up from the recession has provided the impetus for people over 50 to say that it's time to do something that they've always wanted to do and to take an opportunistic approach to creating their own business.
"These are not people who are past retirement, but individuals with years of productive activity in front of them, and their move into the ranks of entrepreneurs opens an interesting new aspect within the UK's business culture, both socially and economically.
"However, while the majority of businesses started by the over 50s are driven by opportunity, there is an element of necessity behind this increase in new start-ups.
"That can point to an element of age discrimination, as people in this age group struggle to get into the job market and are forced into launching their own businesses to get back to work."
Professor Levie said, "In 2013, a fifth of working age individuals in the UK were either running their own business, were actively trying to start one, or intended to do so within the next three years.
"That figure is down from the record high of a quarter in 2012, but remains above levels reported during the pre-recession period.
"One explanation is that, as we enter a period of recovery, traditionally the number of new businesses start-ups reduces, as people start to feel greater job security and have a wider choice as to whether they enter self-employment or employment."
The Prince's Initiative for Mature Enterprise (PRIME), is a national charity, which supports business creation for the over 50s. Alastair Clegg, Chief Executive of PRIME, said, "Everyone is talking about the rise of self-employment and new businesses being started and this report confirms that it’s the over 50s who are driving this positive trend forward.
"The over 50s have the skills, experience and dedication that naturally lend themselves to enterprise and businesses started by older people help benefit the economy, provide jobs and work for other people and more importantly, help keep older people in the workforce."
As well as reporting the growth of older entrepreneurs, the report's findings that overall levels of enterprise are slightly below the very high rates recorded in 2012, but still above the longer term trend, point to another change in the economy.
The full copy of the GEM UK 2013 Monitoring Report.