Baby Boomers as Entrepreneurs

I’m a bit late in posting this blog, like the entire winter—but trips to Glasgow, Scotland; an 8-week Irish Studies course; lots of SBDC and Tech Incubator research kept me busier than expected. But I have been pulling articles, watching for interesting trends, waiting for the next top story.

I ran across a Kauffman Foundation report on entrepreneurial activity that seems to turn entrepreneurial myths upside down. The belief is (and this is certainly not a myth) that as we recover from this recession, the best determinant of our growth rate is in our level of entrepreneurial activity. The myth is that as we become an aging country, with the baby boom generation moving into retirement, we will become a sluggish society, not an entrepreneurial one. Or will we?

Kauffman Foundation research shows that the country might be heading toward an entrepreneurial boom, and not in spite of the aging population but because of it. Over the past decade, the highest rate of entrepreneurial activity belongs to the 55-64 age group; the 20-34 age group has the lowest. Here are the findings:

· In every single year from 1996-2007, 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 age 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.
· Additionally, Kauffman research has revealed that the average age of the founders of technology companies in the U.S. is a surprisingly high 39—with twice as many over age 50 as under age 25.

Of course, there could be an increase in entrepreneurial activity among those under 30 during these times of deep employment cuts by large firms, but as the study notes, “a steady increase in life expectancy also means that Americans are not only living longer but also living healthier longer, suggesting that those entrepreneurial 60-year-olds could be 2020’s entrepreneurial 70-year-olds.” (Source: Dane Stangler, “The Coming Entrepreneurship Boom,” Ewing Marion Kauffman Foundation, June 2009 www.kauffmanfoundation.org )

But that’s not all I’ve run across about the Baby Boomer population. In a July-August 2009 article in Harvard Business Review, the authors note that two large surveys of college graduates reveal remarkable similarities in workplace preferences between Baby Boomers and Generation Y – the oldest and the youngest groups in our emerging workplace. Both Boomers and Gen Y’s want to contribute to society through their labor; seek flexible working arrangements; value social connections at work and loyalty to a company; put stock in mentoring and generation-jumping, prize other rewards of employment over monetary compensation; and are drawn to opportunities that allow time out to explore passions, hobbies and good works. For the Gen Y’s, the order of compensation is, high quality colleagues; flexible work schedules; prospects for advancement; recognition from one’s company or boss; a steady rate of advancement and promotion; access to new experiences and challenges. The order of compensation for Boomers is, high quality colleagues; an intellectually stimulating workplace; autonomy regarding work tasks; flexible work arrangements; access to new experiences and challenges; giving back to the world through work; and recognition from one’s company or boss. (Source: Hewlett, Sylvia Ann, Laura Sherbin, Karen Sumberg, “How Gen Y & Boomers Will Reshape Your Agenda,” in Harvard Business Review July-August 2009, p. 71-76 www.hbr.org.)

Hmmmm…interesting.

By the way...did you know that Richard Cantillon (1680–1734), an Irishman with a Spanish name, is considered the first great economic theorist? Cantillon developed a two-sector general equilibrium system from which he obtained a theory of price (determined by costs of production) and a theory of output (determined by factor inputs and technology). This…the result of my Irish Studies courses out of NUI Galway. http://en.wikipedia.org/wiki/Richard_Cantillon