Trend: Baby Boomers Flood Entrepreneurial Ranks

An article in the Wisconsin Technology Network gives several insightful predictions on trends to watch in 2005. Among them: globalization and outsourcing will continue unabated, and small and medium enterprises will be hot.

The prediction that caught my eye, though, is this one entitled “Boomers bolt”:

“Look for Boomers to continue to flood the entrepreneurial ranks. If you want to keep them (and demographic trends suggest you will need to) then be prepared to offer them the right mix of flexibility, challenge and rewards. All-or-nothing approaches to employment particularly for those nearing retirement age simply won’t cut it. Many older workers want to continue to work, indeed many will have to, but continuing in high pressure, all consuming roles is not an option they care to pursue. They want to do something fresh and new that allows them to draw on their deep knowledge about their work, their field of expertise, their industry and their company and its culture. New roles need to be created that keep older workers involved meaningfully but which also offer significant flexibility and choice in when and how much they work. Mentoring, consulting, and project-based assignments appeal to older workers burned out by the grind of full-time work but not ready for retirement.”

I happen to agree strongly with the writer, Tony DiRomualdo. The rise of the older entrepreneur in the United States is something we have identified as one of the top nine trends influencing the small business market (see “Graying of Small Business” at our sister site, TrendTracker.)

But if so many observers see evidence of this, why do studies indicate that entrepreneurship is the domain of younger people? Why do the statistics not bear out what our observations are telling us?

For instance, the 2004 Global Entrepreneurship Monitor study — released just last week — suggests that entrepreneurship is for young adults:

The first observation is that it is young people between 25 and 34 years of age who are the most active entrepreneurial group of the population regardless of the wealth of the country from which they come. After the age of 35, all populations show a steady decline in entrepreneurial activity. While some minor differences can be observed between individual countries, the pattern has remained unchanged since GEM’s inception in 1999.

I have a theory about this. My theory is that Baby Boomers often engage in non-traditional forms of entrepreneurship that may not be captured adequately in studies. Older entrepreneurs may engage in part-time endeavors, such as consulting, writing, and other activities more in the nature of part-time employment than entrepreneurship. Also, it is not uncommon to find Baby Boomers investing in entrepreneurial ventures as angel investors, buying franchises, and buying businesses. These activities are entrepreneurial in their essence, but don’t fit the pattern of a typical startup. Some of the Baby Boomers involved in the activities may not even identify themselves as entrepreneurs.

Whether my theory is correct remains to be seen. I will continue gathering information about this trend.

Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.