Entrepreneurship: The New Mid-Life Crisis?

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 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 rate. Perhaps most surprising, this disparity occurred during the eleven years surrounding the dot-com boom—when the young entrepreneurial upstart became a cultural icon.

• In every single year from 1996 to 2007, Americans between the ages of 55 and64 had a higher rate of entrepreneurial activity than those aged 20-34.
• For the entire period, the 55-64 group averaged a rate of entrepreneurial activity roughly one-third larger than their youngest counterparts.
• These trends seem likely to persist: in the Kauffman Firm Survey, a longitudinal survey of nearly 5,000 companies that began in 2004, two-thirds of firm founders are between the ages of 35 and 54.3
• 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 25.4
• See, for instance, the birth rate trend from 1980 to 2005: from 1980-1987, the total birth rate for the U.S. fluctuated between 15.6 and 15.9 live births per 1,000 people. From 1988 to 1991, the birth rate increased to over 16, peaking in 1990 at nearly 17 per 1,000. See also National Center for Health

1. Statistics, http://205.207.175.93/VitalStats/ReportFolders/reportFolders.aspx. That slight uptick in the birth rate may not sound like much, but consider that an extra one or (mathematically, at least) one and one half births per 1,000 in population, for a population of, say, 100 million people, translates into an additional 100,000 people per year.
2. Population Division, U.S. Census Bureau, Table 10, Projected Life Expectancy,http://www.census.gov/population/www/projections/summarytables.html. See also Jim Oeppen & James W. Vaupel, “Broken Limits to Life Expectancy,” 296 Science 1029 (10 May 2002).
3. Janice Ballou, et al, “The Kauffman Firm Survey: Results from the Baseline and First Follow-Up Surveys,” Kauffman Foundation, March 2008, http://www.kauffman.org/uploadedFiles/kfs_08.pdf.
4. Vivek Wadhwa, Richard Freeman, & Ben Rissing, “Education and Tech Entrepreneurship,” Kauffman Foundation Research Report, May 2008, http://www.kauffman.org/uploadedFiles/Education_Tech_Ent_061108.pdf.

Tags: Business, Entrepreneurship, Mid-life Crisis