On May 29^th, 2010, the Reno Gazette Journal republished an article originally printed by USA Today titled, “More Older Americans Start Own Business”.  Citing several different studies, including one produced by the Ewing Marion Kauffman Foundation and another by the Global Entrepreneurship Monitor organization, individuals 55 years or older are increasingly becoming the majority of first-time small business owners and entrepreneurs throughout the United States.  Employment data provided by the U.S. Bureau of Labor and Statistics (BLS), reproduced in the table below, illustrates the point that older Americans are increasingly becoming the majority of Americans who are self-employed.

 Number of Self-Employed Americans by Age

Nationwide

December 2008 to December 2009

Age Group	December 2008	December 2009	Dec 08 to Dec 09 Actual Change	Dec 08 to Dec 09 Percent Change
Aged 6 to 19	49,000	30,000	-19,000	-38.8%
20 to 24	256,000	298,000	42,000	16.4%
25 to 34	1,386,000	1,400,000	14,000	1.0%
35 to 44	2,070,000	2,000,000	-70,000	-3.4%
45 to 54	2,460,000	2,400,000	-60,000	-2.4%
55 to 64	1,900,000	2,000,000	100,000	5.3%
Aged 65 or Older	726,000	939,000	213,000	29.3%
TOTAL	8,847,000	9,067,000	220,000	2.5%

Source:  US Bureau of Labor Statistics; “More Americans Start Own Business” by Laura Petrecca USA Today May 29; 2010, Reproduced by the Reno Gazette Journal May 29, 2010.

Between December 2008 and December 2009, when the total number of all Americans who reported to be “self-employed” increased by approximately 220,000 or just 2.5%, the total number of Americans aged 65 years old or older grew dramatically growing by 213,000 individuals or an astonishing 29.3%.  Americans aged 65 years or older accounted for the single largest actual increase and percentage increase in the number of Americans reported as “self-employed in the one-year period between December 2008 and December 2009.

Comparatively, the more “traditional” group of self-employed entrepreneurs (typically individuals aged 20 to 24) accounted for only the third largest actual increase (42,000 new individuals reported to be self-employed) and the second largest percentage increase (16.4% increase) – both measures of growth still well behind the growth in Americans aged 65 years or older and reported to be “self-employed”.

From the perspective of developing effective economic development policies and programs, the changing demographic face of self-employed, small business owning, entrepreneurs in the United States requires some modification to how the federal government, state, and local governments develop and implement their small business and entrepreneurial economic development strategies.  This changing demographic face also requires a rethinking of the types of workforce training and development programs the federal, state, and local governments develop and implement as well.

Two important economic development policy and program development concerns, correctly identified in the May 29, 2010 article reproduced in the Reno Gazette Journal, include:  1) the fact that older entrepreneurs simply have less “time” to make up for the lost money if their self-employed efforts or small business start-up fails when compared to their 40 year old or younger entrepreneurial counterparts, and 2) the older entrepreneur’s “facility with technology” still tends to be less than their 40 year old or younger entrepreneurial counterpart and represents a significant barrier that older entrepreneurs still have to overcome.

Although there are several national programs available through the Small Business Administration (see www.sba.gov/50plusentrepreneur) designed to help older entrepreneurs start-up their own businesses, state and local economic development policies and programs should be better tailored to fit specific area and regional needs.  Generally, state and local economic development policies and programs could be developed in order to mitigate the higher levels of risk that older entrepreneurs face.  For example, special angel investor funds or state/local government funds could be developed and set aside specifically for financing businesses started by entrepreneurs aged 55 years or older.  Loans at discounted interest rates could be made from these funds to older entrepreneurs and more favorable default agreements could also be structured in order to protect entrepreneurs aged 55 years or older from losing their savings needed for later retirement years.

In order to overcome the “facility with technology” difficulties that older entrepreneurs more often struggle with than their younger entrepreneurial counterparts, technology training and education courses could be developed specifically for entrepreneurs aged 55 years or older.  These courses, depending upon local and/or regional needs, could be designed in a way that provides greater emphasis on understanding the basics of spreadsheets, databases, accounting software, word-processing, email, and even online social networking and marketing tools in an environment where the older entrepreneur feels more comfortable surrounded by individuals of similar age and experience.

In fact, because online social networking and marketing tools have become an increasingly important way start-ups and small businesses market their business while also finding important information about how to manage and grow their entrepreneurial efforts, state and local economic development policies and programs should really focus on how to teach these different online social networking and marketing tools to older entrepreneurs.  According to the May 29, 2010 USA Today article reprinted in the Reno Gazette Journal, “A plethora of information exists that small-business owners can glean from their peers — often by logging onto social-networking sites.”

New state and local economic development policies and programs, including small business and entrepreneurial development strategies and workforce training and development strategies, need to be focused as much on older entrepreneurs as they are on more traditional, young entrepreneurs.  Given that the overall demographic trend of the United States is increasingly trending towards an “aging” of the population, more and more of our first-time self-employed, small business owners and entrepreneurs are becoming increasingly older.  The ability of these older entrepreneurs to succeed will rely upon not only their significant business and personal experience and knowledge, but also the ability of state and local governments to develop appropriate state and local economic development policies and programs designed to meet the specific needs of an aging entrepreneurial sector.

This entry was posted on Thursday, June 10th, 2010 at 7:43 pm and is filed under Economic Development. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a comment, or trackback from your own site.