Thanks to my colleague Jeff Apton, I recently discovered the report The Coming Entrepreneurship Boom from the Ewing Marion Kauffman Foundation. This study states that in the United States an entrepreneurial boom is looming; a boom created by baby boomers.
Apparently, Americans aged 55 to 64 are more likely to become entrepreneurs than those aged 20 to 34. For many people this statistic is counter-intuitive. Younger people are more likely to take risks, right?
Wrong! According to this particular study, “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.”
How much higher? One third.
But that’s not all. The study also notes that “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.”
What are the causes of this baby boomer boom? The study suggests a decline of lifetime employment is a major cause. While many boomers grew up expecting to work for the same company through to retirement, as we all know, this is no longer the case. The implication is lose your job, start a business.
Our longer, healthier lifespan is another contributing factor. Because we live longer, and are fitter and more active, boomers are more likely to continue working longer and are doing so in their own businesses. The study also suggests the current recession is contributing to the increase in entrepreneurial activity in the baby boom generation. When people lose their jobs and can’t find new ones, they start a business instead.
However comprehensive this study is, I believe they are missing a major reason why entrepreneurial activity is skewing older. When someone has worked 15, 20, 30 years in a career they like, but don’t love, at some point they start thinking about doing more with their life. When the mortgage is paid off and the kids have moved out, it’s time to start thinking about doing something they love.
While I haven’t conducted a scientific survey of boomers, from people I’ve met and spoken with, the main reason for starting a business in your 40s, 50s and 60s is passion. They decide it’s time to spend their days working in something that really moves them.
When you’re younger, you’re looking for experience or to pay the bills. You’re trying to figure out who you are, what you want to be when you grow up. You’re starting a family. Taking a risk and starting a business can seem like too much when everything else in your life seems risky.
But at some point, many of us start to think life is too short to waste doing something less than amazing. I know for me, there was that moment when I thought, “If I don’t do it now, I’ll never do it.”
Perhaps it’s the fear of getting to the end of your life and having regrets about actions you didn’t take. Or it’s just a desire to have a career that is more meaningful. Yes, getting laid off may be the boot in the behind some of us need to get started. But I’ve spoken to just as many baby boomer entrepreneurs who left high-paying, secure jobs of their own volition.
Passion, not recession is why boomers are joining the ranks of the entrepreneurs.
Andrea J. Stenberg
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