Successful businesses are not created overnight. Most entrepreneurs have to take risks and work hard for years before they can reap the rewards of their actions. This explains why the majority of companies are founded by people under the age of 50 while older people prefer other activities which produce faster and safer returns. Consequently, entrepreneurs over the age of 50 are often overlooked as a marginal group compared to their younger counterparts.
Teemu Kautonen argues that entrepreneurs over the age of 50 deserve more attention than what most scholars and policy makers give them. They have decades of work experience, an extensive network of connections and a stable financial background which suggests that their companies have a good chance to survive. Their number is not low either. He studied the founders of 839 Finnish companies and, according to his findings, 16 percent of the analyzed companies were founded by people between the age of 50 and 64.
Kautonen divided these entrepreneurs into novice and serial entrepreneurs according to their previous experiences. Novice entrepreneurs started their business without any previous entrepreneurial experience and they represented the slight majority. They were more likely to found a one-person company than any other group and they were less likely to hire more than one employee than entrepreneurs under the age of 50. The members of this group named carrying out their own ideas as their main motivation and, unsurprisingly, their companies were the least likely to grow turnover wise.
Serial entrepreneurs had previous entrepreneurial experience but they still showed similar characteristics. They too were more likely to found one-person companies and less likely to hire more than one employee than their younger counterparts. Their main motivation was different though: it was earning more money. But serial entrepreneurs come in various forms, and it would be interesting to further investigate if serial entrepreneurs with a successful background in entrepreneurship are any different from the average serial entrepreneur in their cohort.
The overall share of women did not change with age; it was between 30 and 40 percent in every age group. Experience, however, made a big difference over the age of 50: women made up 42 percent of the novice entrepreneurs and only 19 percent of the serial entrepreneurs. This shows how social and cultural changes and the removal of family obligations improve the opportunities of older female entrepreneurs in Finland.
Lastly, it cannot be denied that entrepreneurial spirit fades over time: 60 percent of the over 50 entrepreneurs were younger than 54 years and only 10 percent were over 60. Nevertheless, the number of older entrepreneurs will grow in the future due to the ageing population of Western countries. Kautonen is right – they do deserve more attention.
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Contributed by Bence Juhasz.