Our goal is to help Europe grow a new generation of entrepreneurs, specifically from the 50+ demographic group. Why? Because boosting entrepreneurship can play a major role in kick-starting economies, transforming communities, helping people take control of their lives and create opportunities for themselves.
Although the evidence on the performance of firms set up by older entrepreneurs is ambiguous, some studies in the UK show that they have higher survival rates than those ran by younger people (Cressy, 2006) 2 . Indeed, companies founded by older people “tend to have a 70% chance of surviving the crucial first 5 years compared with 28% for companies started by younger people”.3 Other studies conducted in Finland show otherwise, but despite the diverging views, it remains self-evident that older entrepreneurs possess more experience, business and social networks than younger entrepreneurs and are actually more capable of starting and running a business than younger people. 4
The potential is enormous and remains largely unexploited in Europe, whereas in the USA, people aged 55-64 have actually had the highest rate of entrepreneurial activity in the last 10 years. 5 Indeed, some of the most successful companies have been established by entrepreneurs who were 50+ themselves, including McDonald’s and Coca Cola.
THE OPPORTUNITY – WHY 50+ ARE GOOD ENTREPRENEURS AS WELL
Promoting entrepreneurship for the 50+ is vitally important. Its impact in changing individual lives can be substantial: for this age group, entrepreneurship provides independence and self-fulfillment. For some, entrepreneurship may be a part-time activity providing a second income, while others see it as a full career change or as a pension supplement. In any case, it is a chance for millions to do something new and different that offers exciting opportunities, an income and increased flexibility.
Entrepreneurship is also beneficial for Europe’s 6-7economies. 50+ employment can also serve as a driver of growth and potentially job creation.8 The mentoring skills of older entrepreneurs can be particularly useful in training young staff – and in some cases9 senior entrepreneurs will also become job creators themselves. In the UK, this is already underway, with 50+ starting businesses at record levels, and in greater numbers than 18 to 29-year-olds; in 2012, almost a quarter of new businesses were started by entrepreneurs 55 and older.
Finally, 50+ entrepreneurship is beneficial for society at large. The role of seniors as social entrepreneurs and coaches, as well as role models and mentors, means that in addition to contributing directly to growth, they can also help Europe harness skills, knowledge and experience to help younger generations.
THE CHALLENGE - WHY WE NEED TO ACT
Europe faces many significant challenges – all of which hit seniors in one way or another. The continent has experienced rising unemployment since the beginning of the economic crisis in 2008 hitting the 50+ group particularly hard. This has been exacerbated by demographic trends and labor market transformation. This means that new paths to creating economic opportunities for the 50+ must be, particularly as we also aim to tackle youth unemployment, an often conflicting aim. Entrepreneurship can and must be part of the policy scope.
The 50+ group are facing a major employment challenge in Europe.
Some countries’ unemployment rates have risen exponentially since the onset of the economic crisis. In Ireland, the 50+ unemployment rates more than tripled in the post crisis 2008 – 2012 period (from 3.6% to 11.1%); in Portugal it almost doubled (6.6% to 12.8%), in Greece it more than quadrupled (from 3.8% to 15.8%), and in Spain almost one in five people over 50 are currently unemployed.
The consequences of unemployment are particularly problematic for older workers as they face the greatest challenges in finding new jobs. This is partly due to age based discrimination, but also due to other barriers – perceived reduced mobility and flexibility in the workplace, higher labour costs, etc. Indeed, the 50+ group suffers more from long-term unemployment than youth as young people are much more impacted by unemployment recurrence whereas older workers are more impacted by longer periods of unemployment.
In France for example, the ’return to job’ indicator reduces after the age of 50 years and in the UK more than half of the over 50 unemployed have been jobless for more than a year. In Wales, where a third of people aged 50-64 are not working and only 9% of the 65+ are in employment the situation is similar.
The 50+ demographic is five times less likely to secure traditional employment than a person in the 16-24 age group.
There are a number of fundamental and long-term trends which increase both the need and opportunities for the 50+ demographic group to engage in entrepreneurship:
- Europe’s population is ageing at an exponential rate. Over the last decade, the 50+ group has grown by nearly 15%, while other age groups have remained comparatively stable . It is estimated that by 2020 a third of the working-age population in Europe will be over 50.
- The trend in Europe is towards increasing retirement ages, and labour market reform, although the pace of change varies from market to market. The former increases the de facto demand for employment, whilst the latter reduces the job security of the 50+.
- In certain situations the focus on youth unemployment is compounding the increasing problem of 50+ unemployment. Early retirement schemes for ‘seniors’, which are motivated by an attempt to create jobs for young people, also serve to push older workers to prematurely exit the traditional labour market.