Study finds new wave of entrepreneurs over 50

GEM Report

2 July 2014

New trends in entrepreneurial activity have been identified in a key report unveiled today (2nd July).   

The Global Entrepreneurship Monitor (GEM) UK 2013 Report has found more people than ever before are starting a business beyond the age of 50 – a reversal of historically low entrepreneurial activity in this age bracket. 

It also reveals that the UK outperformed European comparison countries such as France and Germany on almost all entrepreneurship indicators in 2013 and, while a dip in activity was recorded following a 2012 peak, levels still remained just above the longer-term trend. 

Led by Professor Mark Hart of Aston Business School and Professor Jonathan Levie of the University of Strathclyde, The UK Global Entrepreneurship Monitor Report measures and compares activity, attitudes and aspirations throughout England, Wales, Scotland and Northern Ireland, as well as France, Germany and the US. It also reports on wellbeing measures, business registration and funding sources. 

The surge in the number of older entrepreneurs reflects a new trend in the UK’s changing economy. From 2002 to 2008, entrepreneurial activity among the over 50s has had a long-run average of just four per cent – much lower than those in the 18-29 and 30-49 age brackets. 

However, from 2008, the rate for over 50s has shown a marked increase – reaching its highest ever level of 6.5 per cent in 2013 and going against figures for the younger age brackets, which show a peak in 2012, followed by a decline 12 months later. 

This increase among the over 50s applies to both men and women, although male rates were ‘significantly higher’ - and the research pinpoints that both sexes were launching their own businesses predominantly out of opportunity rather than necessity. 

Professor Hart said: “The shake-up from the recession has provided the impetus for people over 50 to say that it’s time to do something that they've always wanted to do and to take an opportunistic approach to creating their own business. 

“These are not people who are past retirement, but individuals with years of productive activity in front of them, and their move into the ranks of entrepreneurs opens an interesting new aspect within the UK’s business culture, both socially and economically. 

“However, while the majority of businesses started by the over 50s are driven by opportunity, there is an element of necessity behind this increase in new start-ups. 

“That can point to an element of age discrimination, as people in this age group struggle to get into the job market and are forced into launching their own businesses to get back to work.” 

The Prince’s Initiative for Mature Enterprise (PRIME), is a national charity, which supports business creation for the over 50s. Alastair Clegg, Chief Executive of PRIME, said: “Everyone is talking about the rise of self-employment and new businesses being started and this report confirms that it’s the over 50s who are driving this positive trend forward. 

“The over 50s have the skills, experience and dedication that naturally lend themselves to enterprise and businesses started by older people help benefit the economy, provide jobs and work for other people and more importantly, help keep older people in the workforce.” 

As well as reporting the growth of older entrepreneurs, the report’s findings that overall levels of enterprise are slightly below the very high rates recorded in 2012, but still above the longer term trend, point to another change in the economy.

Professor Levie said: “In 2013, a fifth of working age individuals in the UK were either running their own business, were actively trying to start one, or intended to do so within the next three years.

“That figure is down from the record high of a quarter in 2012, but remains above levels reported during the pre-recession period. 

“One explanation is that, as we enter a period of recovery, traditionally the number of new businesses start-ups reduces, as people start to feel greater job security and have a wider choice as to whether they enter self-employment or employment.” 

A full copy of the GEM UK 2013 Monitoring Report can be found at www.aston.ac.uk/gem and www.gemconsortium.org 

-Ends-

For further media information, please contact Jonathan Garbett, Aston University Communications on 0121 204 4552 or j.garbett@aston.ac.uk    

Notes To Editors 

About the GEM UK 2013 Monitoring Report 

This report – compiled by Professor Mark Hart, Professor Jonathan Levie and supported by Karen Bonner - compares Global Entrepreneurship Monitor (GEM) measures of entrepreneurial attitudes, activity and aspiration in the UK with France, Germany and the United States (US).  It also summarizes entrepreneurial attitudes, activity and aspiration across the four nations of the UK and reports on business registration activity by business owner-managers, wellbeing measures of both entrepreneurs and non-entrepreneurs, and on changes in business start-up funding expectations through the business cycle in the UK. 

GEM’s primary focus is on the study of three areas:

• To measure differences in the level of entrepreneurial activity between countries

• To uncover factors leading to appropriate levels of entrepreneurship

• To suggest policies that may enhance the national level of entrepreneurial activity. 

From the survey, individual entrepreneurs at three key stages are examined:

• Nascent entrepreneurs (NAE): The stage at which individuals begin to commit resources, such as time or money, to starting a business.  To qualify as a nascent entrepreneur, the business must not have been paying wages for more than three months.

• New business owner-managers (NBO): Those whose business has been paying income, such as salaries or drawings, for more than three, but not more than forty-two, months.

• Established business owner-managers (EBO): Those whose business has been paying income, such as salaries or drawings, for more than forty-two months. 

In addition, the general intention to start a business is measured by asking individuals if they expect to start a business within the next three years (FUT). Finally, individuals are asked if they have sold, shut down, discontinued or quit a business, in the past year (BC). It is important to understand that the main subject of study in GEM is entrepreneurs rather than the businesses that they run.  GEM measures the entrepreneurial activity of people from intention to exit. The first two stages of active business development, the nascent entrepreneur stage and the new business owner-manager stage, are combined into one index of Total early-stage Entrepreneurial Activity, or TEA. 

About the Authors 

Professor Mark Hart 

Mark Hart is Professor of Small Business and Entrepreneurship at Aston Business School and has dedicated over 35 years to researching and teaching in the area of SMEs and entrepreneurship.

A highly respected international scholar, Professor Hart, has held the Chair in Small Business and Entrepreneurship at Aston University since 2008.   He is also currently the Programme Director and Academic Lead on the Goldman Sachs 10,000 Small Businesses programme in the Midlands and is Deputy Director of the national Enterprise Research Centre, which has as its mission to understand the drivers of small business growth. 

Professor Hart received the Queen’s Award for Enterprise Promotion in April this year (2014) for his ground-breaking work in enterprise research, policy and practice. 

Professor Jonathan Levie 

Jonathan Levie is a Professor in the Hunter Centre for Entrepreneurship at the University of Strathclyde, where he is Director of Knowledge Exchange. He has held research and teaching posts at the London Business School, Babson College (US), INSEAD (France), and University College, Cork (Ireland). 

Professor Levie was associate coordinator of Global Entrepreneurship Monitor (GEM) in its founding year and has served as an elected member of the board of the Global Entrepreneurship Research Association (GERA). He currently is a member of GERA’s Research and Innovation Committee and project manages a major grant from the EC DG Employment, Social Affairs & Inclusion for the Global Entrepreneurship Research Association. 

 

He also co-directs GEM in the UK with Professor Mark Hart of Aston Business School and is a co-investigator at the UK’s Enterprise Research Centre, where he is engaged in research on ambition and venture growth. Professor Levie’s other current research interests include the role of intrapreneurship in innovation outputs, business model change, and the role of entrepreneurial capital in university spinout performance. 

About The Prince’s Initiative for Mature Enterprise (PRIME) 

The Prince’s Initiative for Mature Enterprise, established by HRH The Prince of Wales, is a national organisation dedicated to providing everyone over 50, who is unemployed or under threat of redundancy, with the support to achieve financial, social and personal fulfilment through sustainable self-employment. 

Since 1999 PRIME has helped more than 27,000 over 50s who are unemployed or facing redundancy, to explore self-employment.  The charity offers support through free training courses, mentoring support, networking events and online resources.