Contrary to popular belief, entrepreneurship among Boomers is strong when compared to younger age groups, including millennials, according to a new analysis from The Kaufman Foundation of national research into entrepreneurship. The Kauffman Startup Index reveals that nationally the rate of new entrepreneurs ages 55-64 has increased from 0.34 percent in 1996 to 0.37 percent in 2014. (This rate means that 370 out of every 100,000 adults in this age group became entrepreneurs in a given month.)
The same measure showed the age 20-34 demographic group, at 0.22 percent, was considerably below the rate for other age groups. (This rate means that 221 out of every 100,000 adults in this age group became entrepreneurs in a given month.) The data also indicates that the rate of new entrepreneurs for the age 20-34 group is down from the high point for this age group of 0.28 percent in 1996.
For Connecticut, which has increasingly focused economic development attention and resources on entrepreneurial start-up businesses, the demographic findings may inform the state’s approach.
Connecticut Innovations, for example, “helps innovative Connecticut companies, or those that want to move here, no matter what stage of the business life cycle you’re in.” CI describes itself as “entrepreneur-friendly, trustworthy and collaborative,” without mention of the demographics of the individuals driving the start-up businesses.
Connecticut’s self-identified “innovation ecosystem,” CT Next, equips “startups and entrepreneurs with resources, guidance and networks to accelerate growth and success.” CT Next recently launched the Entrepreneur Learner’s Permit Program, which cuts fees that start-ups in specific industries are required to pay to the state.
Other organizations around the state, such as Hartford Area Young Professionals and Entrepreneurs (HYPE), focus on young people starting fledgling businesses. The Connecticut Center for Arts and Technology (ConnCAT) in New Haven has developed an Entrepreneurial Academy, a hands-on program that coaches interested and capable youth on business fundamentals and entrepreneurship skills. ON the other end of the demographic continuum, AARP has launched an initiative called Encore Entrepreneurs, focusing on supporting and encouraging businesses launched by individuals age 50 and older.
There are competing views as to whether “success or hardship” is driving the growth of entrepreneurship for older Americans, according to the Kaufman analysis. “On one hand, working and starting business late in life might be a result of increased debt levels especially for younger female Boomers. On the other hand, some researchers have found that growth of Boomer entrepreneurship may be an indication of financial strengths rather than weaknesses.”
The oldest cohort of Baby Boomers turned 65 in 2011, and the last cohort of Boomers will turn 65 in 2029, the analysis indicates, stressing that the peak age for entrepreneurs is “closer to 40 than 20.”
The Kaufman review indicates that today’s millennials are “starting businesses at lower rates than other cohorts did when they were the same age.” Possible reasons suggested include growing student debt, timing of entry to workforce with the Great Recession, change in risk-taking attitudes, housing costs, among others. A poll by Young Invincibles, cited by the Kaufman presentation, found that Millennials identified student debt and lack of retirement savings as barriers to entrepreneurship.