The grey economy: Entrepreneurs aged fifty or over critical to growth
At a time when an ageing society is being viewed as a problem, new research shows that there is a wealth of experience driving the UK economy today.
By 2025, half the adult population in the United Kingdom will be aged fifty or over, that's around 27million -- all putting an strain on the country's resources. However, new research points to the fact that 'third age entrepreneurs' may be part of the solution, since they are responsible for over a quarter of the companies set up in the UK in recent years.
The report, published by the National Endowment for Science, Technology and the Arts (NESTA), reveals that 27 percent of successful start-up companies in the UK between 2001 and 2005 were created by entrepreneurs aged between fifty and sixty-five. Over this period, more than 350,000 companies were set up, with 'Third Agers' responsible for creating 93,500 companies and employing almost 400,000 people.
A common myth is that most start-up businesses are initiated by young entrepreneurs as might be best illustrated by success stories such as Google, Facebook and Innocent. However this new report from NESTA shows that experience is as valuable as the enthusiasm of youth - the companies which showed strongest growth were founded by a team of both young and older entrepreneurs.
The report demonstrates that the UK has 122,300 'third age founders' responsible for successful start-ups. 47,000 of these are 'solo entrepreneurs' - over-fifties who have set up a company on their own. Where a company was founded by a combination of young and over-fifties entrepreneurs, the study showed that older founders were more actively involved in the business with 60 percent responsible for wanting to form a team and 53 percent having the original business idea.
Commenting on the report, NESTA's Chief Executive, Jonathan Kestenbaum says 'At a time when an ageing society is being viewed as a problem, our study shows that there is a wealth of experience driving the UK economy today. Many third age entrepreneurs are setting up exciting new companies which are employing thousands of people'.
The report found that 'Third Age Entrepreneurs' are highly motivated by the desire to give something back to society and only half said they intended to retire after reaching sixty-five years old. Further evidence was found to show that third age entrepreneurs are just as happy to take risks as their younger peers. Many reported being less worried about their homes being repossessed as they have alternative forms of income from pensions, second jobs, other directorships and from property or investments.
Little difference was found in the sectors that younger entrepreneurs and those over-fifty chose to start businesses in, challenging the belief that sectors such as high tech and creative industries are preferred by the young.
Entrepreneur, Professor Anton Ziolkowski, was in his late fifties when he, his colleague Dr. Bruce Hobbs and their PhD student David Wright, developed a new technology which radically cuts the cost of oil exploration. They launched their company, MTEM, from the University of Edinburgh in November 2004. It was the largest-ever spinout from a Scottish university with 7.5 million GBP from investors. The business generated revenues of 1.5 million GBP from oil companies in the first quarter of 2007. In June 2007 the founders and investors sold the company to Petroleum Geo-Services based in Oslo for 275 million US Dollars. Professor Ziolkowski has gone on to work for PGS as it's chief scientist.
Professor Ziolkowski says, 'When we were starting the company it was at great personal financial risk, but we had enormous confidence in our idea. We made a substantial profit from the sale of MTEM, as did the University of Edinburgh and our original investors, who were rewarded with nine times their invested money. Older entrepreneurs have an important role to play and our experience should be seen as an asset.'
Photography by Hamad Masoumi