Brief description of the opportunity

The demographic changes towards longevity and the yielding pressure on social and healthcare systems has pushed towards finding alternatives in jobs markets to integrate older people longer in active work life. Entrepreneurship opportunities for older people pose a great opportunity in career advancement for older people, especially after the economic crisis during which many people with long term experience and skills lost their jobs and have been forced to find alternative employment opportunities. People in the age group of 50+ are thus in general in a good position to start an entrepreneurial career and may also have some starting capital available for their business, reducing the need for start-up loans or early stage investment. Some studies have concluded that thanks to long term previous experience, knowledge and networks the companies started by older founders have a higher survival rate than average start-up companies. The entrepreneurship opportunities for older people are especially important in light of decreasing employment opportunities in the age group before retirement and pose an alternative to absence in workplaces.  When compared to middle-aged people who are often at the peak of their career and have young children dependent on them, older people have more relative freedom to be able to devote to fulfilling their entrepreneurship dreams. According to the OECD report on inclusive entrepreneurship policies there were 6.5m self-employed people in the EU in 2012, counting for 21% of labour market activity in this age group. At the same time, the rate of self-employment among older people was 25.2% in 2002 and has thus dropped considerably meanwhile.

Keeping that in mind, there is a clear business case for encouraging older people to start their businesses and supporting them in this process. There is further opportunity for governments with an aim to un-lock job creation by supporting older entrepreneurs with their start-ups. Potential activities include support through the provision of supportive training/guidance – financing, legal, prototyping, and incubator services. The provision of these services, as well the provision of space sharing facilities, could act as a creator of workplaces for the older adult. 

Older people should be encouraged and supported to set up viable businesses. There is no limit to types of businesses that could be started by older people, however, typically these can include professional services based on their previous work experience, businesses built on hobbies and pastimes as well as socially innovative business models aimed at meeting the needs of other older people. It can also include self-employment and micro enterprises. The objectives of encouraging olderpreneurship include:

• Keep older people active and engaged in society
• Provide older people with opportunity to earn income later in life
• Increase jobs and growth by supporting new business developments
• Increase the opportunity for older people to work on product and service solutions tailored to the needs of older people

Barriers and market failures

The main market failure that keeps older people from actively engaging in entrepreneurship is that there is usually a considerable waiting period before investment to one’s own business initiative yields returns. Therefore, people are more motivated to engage in these kinds of activities if they see themselves reaping the future benefits of their time and monetary investment. The older the people become, the lower this incentive becomes. Kautonen and Minniti (2014) claim that the determinant of entrepreneurial activities is not so much how old people are but how old they feel themselves to be, thus establishing a connection between entrepreneurial activities with ageing well. 

Furthermore, when compared to a regular job, the self-employment creates less security – often there is no sick leave, it is more stressful and time-consuming than traditional employment. Here again, the general wellbeing and health constraints come to play.

Training and knowledge restraints are also major determinants which keep older people from entering entrepreneurial fields. On the one hand, general entrepreneurial knowledge is lacking among people that have been previously employed permanently and, on the other hand, there may be gaps in digital advancement required for success in business among older people.

As a result, in a survey from 2012 the older citizens did see becoming an entrepreneur desirable (30%) but were much less likely to see it as feasible path within next five years (16%). Despite not seeing it as a likely or feasible option, not many older people reported barriers to this chosen path. 10% thought that lack of capital would prevent them from starting a business, 5% saw a barrier in lack of skills and 4% saw a lack in business ideas. Therefore, the reasons for lack of incentives in starting the business can be sought after elsewhere.

OECD report on older entrepreneurship concludes that there are generic barriers to entrepreneurship that affect also older entrepreneurs – human capital, social capital and access to finances, while age-specific barriers for this group of entrepreneurs are declining health, financial disincentives, and age discrimination.

Market prospects – size, growth trends and scalability

There is a growing tendency of olderpreneurism in many countries. One of these is the UK where the possibility of using the tax-free lump sums from pension funds has triggered a rapid increase of people between 50-64 starting their own businesses – the figure has increased from around 300,000 to 800,000 between 2010 and 2014, counting for about 7% of people in this age group. Thus with regards to enabling older people to start their own business, the UK seems to be a leading example in Europe.

One of the important determinants of this tendency is the entrepreneurial zeitgeist of the era – the spread of digital empowerment and platform economy have formed a strong start-up mentality and there is no reason why older people should be left out from this trend. While in many countries the digital skills are not considered the strongest suit of the older people, the digital empowerment and new entrepreneurial opportunities in this field have opened up also opportunities for older people. The digitally empowered elderly would potentially go on to further explore the opportunities provided by the digital world, and engage in further training or economic activities available online.

The spread of this start-up culture has generated developments start-up support structures which often go beyond government actions. One of the examples of this is the emergence of crowdfunding practices which facilitates gathering the starting funds for the companies. Venture capital funding and angel investment availability are other important factors which encourage entrepreneurship amongst the 50+ population. 

Another underused option from the wide skill-base of older people and when it is put in practice in entrepreneurship is the potential of reverse mentoring programmes - the young trainers-volunteers can improve their skills and gain invaluable experience as mentors on one hand, and as beneficiaries of the life and professional experience of the elderly people on the other. This could create extra income for the elders and help the young employees be more productive, this way companies won't lose time and money by repairing the problems the unexperienced create due to the lack of it. Thus giving more flexibility and confidence in a job.

There are opportunities for older people to engage in entrepreneurial activities in a variety of areas both commercial and social and sometimes in relation to growing the silver economy, eg:

• Creating incubator environments or co-operatives where people can come together to incubate and test ideas
• Developing customised tourism opportunities for the older traveller
• Developing new career pathways for young people as career carers with options to professionalise caring outside of nursing
• Contributing to the development in assisted living and sensor technology
• Developing new financial products and services for an older market
• Developing new types of food to meet the needs of a more conscious and informed ageing population
• Contributing to the development of new types of housing - more multigenerational living and support in community rather than nursing home

Mostly, start-ups launched by older people tend to offer tailored services or craft items based on hobbies and interests of the older people. OECD report on the topic claims that older self-employed people are more likely than others to operate in agriculture, forestry and fishing, wholesale and retail trade and repair of motor vehicles; transportation and storage; real estate; and human health and social work.

Challenges - identified need for action

Since the economic crisis starting in 2008, unemployment rose sharply in all of the EU member states, affecting the youngest and the oldest age groups of labour force the most. The older age group faces serious challenges in finding new jobs after becoming unemployed – the employers are reluctant in hiring them, often their formal skills have been outdated to meet the specific needs of the employment market.  Platform 50plus-europe.eu outlines that the unemployment rates in the age group of 50-74 started to increase sharply after 2008 and were still high in many countries even in 2014, not showing signs of decrease.

Increasing the number of older entrepreneurs offers opportunities to solve multiple issues facing the people in the 50+ age group and creating wider societal impact, there are multiple challenges which act as impediments towards achieving the high level of “olderpreneurship”.

Older entrepreneurs might experience social exclusion and age-based discrimination which can become determining factors in discouraging the entrepreneurial joy and advancement, thus affecting directly the development of the businesses of older people. Kibler et al. (2015) investigate the issue of social exclusion among older entrepreneurs in London area and suggest that more attention towards discrimination sources should be given by both entrepreneurs themselves as well as support initiatives.

The availability of government entrepreneurship support programs is a strong determinant of the propensity of older entrepreneurship. Pilkova et al. (2015) claim in their study that well-designed government programmes also serve to encourage the social inclusiveness of older people in addition to supporting older entrepreneurship. At the same time, authors also conclude that the intellectual property rights as a variable do not explain the low innovativeness of older entrepreneurship and other factors should be examined to find potential determinants of this tendency.

To conclude, the main challenges of older entrepreneurship that the governments are facing are multifaceted – firstly, the cultural and societal characteristics determine the general attitude towards older entrepreneurs in general and can become determinants in whether a person starts a business at all or not. The incentive of creating something with a long-term return is furthermore influenced by the ageing process in general – whether the person feels old or not. This is further influenced by the general entrepreneurial culture in the country. Once the business has been created, the country’s innovation system and available support mechanisms shape its potential growth. The final question lies in the value added and level of innovativeness of companies created by older people.

Added value of EU action

Added value of EU-level action for member states can mostly derive from knowledge spill-over from sharing the best practices and encouraging networking. There is also a potential to encourage EU-level mentoring and coaching networks that would help in sharing experiences.

The EC and Members of European Parliament are already supporting older entrepreneurs. On June the 8th, 2016, The internet platform 50plus-europe.eu joined forces with the European Innovation Partnership on Active Healthy Aging (EIP on AHA). There are several other initiatives too that are European wide as well as various national, and regional initiatives. The EC can play a role by reinforcing the development of a key contact point. Moreover, the agenda of the older entrepreneur can be promoted more widely and with more vigor in some sectors and the EC can play a part here. 

Existing or planned initiatives to build on

The main policies to look at from the point of view of the EU level actions are networks and practice sharing initiatives, including mentoring and coaching. One of the good examples from this field is an internet platform 50plus-europe.eu which brings together different organizations concerned with the employment opportunities of people in the age group of 50 and older. The aim of the initiative is to raise the awareness of policy makers regarding the potential and importance of entrepreneurship initiatives in the older age group in Europe. Another example is CreAger Hubs which encourage entrepreneurship by older people.

On national level, more direct entrepreneurship encouragement policies should be considered – financial incentives, training, mentoring and coaching support, but also general awareness raising and societal support towards olderpreneurship to decrease the influence of age discrimination and discouragement from health issues.

A good example on national level is the Prince's Initiative for Mature Enterprise, PRIME from the UK. It was a charity set up by the Prince of Wales to support the over-50s start businesses, and provided advice and access to loans. In 2014 it merged with Business in the Community initiative and is no longer running.  Some of the issues are now tackled by Age in the Workplace programme in the UK.

Educational initiatives for entrepreneurial training of older people is important. Workshops have been held in the UK (Bristol), Bielsko Biela (Poland) and in Brussels via European Association of Development Agencies. Drop in sessions for older people have been set up. In NW England a scheme is in place to offer older people direct help in setting up businesses and wishing to volunteer for small businesses to gain experience. The H2020-ICT-2014-1 project proposal STARTINNOCOOP, presented by 13 entrepreneurship local-hubs coordinators, created the website http://coopreneur.eu.

Recommended EU policy actions

Recommended EU policy actions would be built mostly on sharing best practices and building case examples based on successful approaches to older entrepreneurship. The level of engaging in entrepreneurial activities among older people differs substantially among EU member states and therefore a knowledge spill-over and learning practices are needed. This can be done by facilitating the European networking and the work meetings, assembling experts and entrepreneurial stakeholders (incubators/accelerators, chamber of commerce, industrial parks) and EU-STARTUP initiatives. One option for this knowledge sharing is building networks or encouraging the existing ones. Monitoring and coaching practices can also provide useful and could be encouraged as part of network activity or a separate initiative.  Another way to encourage policies of member states towards encouraging entrepreneurship is the monitoring and feedback system regarding their activities and benchmarking against other member states. This is already done as part of entrepreneurship monitoring activities (for example GEM) and further activities could be based on the existing ones.

The internet platform 50plus-europe.eu recently put forward a call for action to the European Union and there may be scope to support this agenda further. A call is made for policies and proposal that:

• Fully recognize the immense social-economic contribution that the 50+ group brings to Europe and the labour market challenges it faces
• Promote and support 50+ entrepreneurship as a viable career option with benefits for individuals, economies and society
• Allow the 50+ to make full use of traditional and innovative funding sources while avoiding age-related discrimination and improve access to information on all funding options
• Align tax with pension policies to ensure entrepreneurial activity does not undermine pension prospects for 50+ entrepreneurs
• Minimize or eliminate red tape throughout the entire process of business creation for entrepreneurs of all age groups
• Simplify and reduce the tax burden for setting up and running a business especially during its early phases
• Reduce discharge time after bankruptcy and facilitate funding for second/third time entrepreneurs of all age groups
• Encourage the development of formal and informal entrepreneurial educational programs tailored to address the 50+ group’s unique needs and strengths
• Support intergenerational learning and mentoring between young and older entrepreneurs
• Help create a 50+ entrepreneurship friendly culture with support from the private and public sectors, civil society and academia by promoting role models and sharing best practice
• Set up "one-stop-shops’ for 50+ entrepreneurs to bring together all business support services - mentoring, facilitation and advice as per the specific needs of the 50+ group
• Commission a comparative study of the situation for 50+ business in the EU, identify their main obstacles and provide policy recommendations on how best to overcome them
• Call on Member States to build knowledge, understanding and support for 50+ entrepreneurship at national level 

Key stakeholders

Key stakeholders for older entrepreneurship initiatives are older people interested in self-employment activities. Government organisations, network organisations, existing incubators and launch-pads and beneficiaries of the older entrepreneurial activities are also examples of key stakeholders.