#234. The Coming Entrepreneurship BoomPosted on
The Coming Entrepreneurship Boom
Excerpts from The American, The Journal of the American Enterprise Institute, by Dane Stangler, Senior Analyst at the Ewing Marion Kauffman Foundation
It’s no secret the population of the United States is aging rapidly. The country may be on the cusp of an entrepreneurship boom-not in spite of this aging population but because of it.
The United States will eventually recover from the current deep recession and then the overriding concern will become the resumption of growth.
The primary determinant of which path we take is our level of entrepreneurial activity. In terms of job creation, innovation, and productivity, entrepreneurs drive growth. A major worry is that the basic demographics of the United States will inexorably tilt the country toward a stagnant growth path. An aging country, with the baby boom generation moving into retirement, does not strike many as an entrepreneurial society-and yet it should.
Several facts have emerged from Kauffman Foundation research that indicate the United States might be on the cusp of an entrepreneurship boom-not in spite of an aging population but because of it. And, to the extent that entrepreneurship is a key driver of economic growth, this could bode well for America’s growth potential.
Consider the broad population trends in the United States. We are currently experiencing a bulge in the 45-64 age group which, naturally, will mean a bulge in the over-65 age groups in coming years. Life expectancy, moreover, keeps extending farther and farther: by 2050, American life expectancy will be 83 years, compared to 78 today.
Why does this matter for entrepreneurship? Contrary to popularly held assumptions, it turns out that over the past decade or so, the highest rate of entrepreneurial activity (a measurement of new business creation) 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.
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. 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.
Entrepreneurs are going to come from all areas of our society. What are you doing to nurture them in your town?