The older generations are the new entrepreneurs, creating employment and driving national productivity, according to research by the Centre for Economics and Business Research (CEBR).
Entrepreneurs aged over 50 employed more people than start-ups run by younger individuals for the first time in 2016, the research found.
The trend is likely to continue: the number of over-50s in work is rapidly increasing and those aged over 50 are expected to dominate the self-employed workforce in the UK by 2024. On current trends, this gap will widen over time.
“With low productivity continuing to affect many areas of the economy, the message from our research is clear: rather than being a drain on the economy, the over 50s are becoming increasingly important drivers of the UK’s economic growth,” said Robert Gordon, CEO of Hitachi Capital UK, which commissioned the research.
“This age group is setting up and running their own businesses at a faster rate than any other age group, directly employing nearly 10 million people, 2 million more than the under 50s. This gap is only set to widen,” he added. “If we are to rebalance our economy, it is essential that we find more ways to support their economic ambitions.”
The data suggests that an increasing number of 50-64 year olds choose not to retire and instead stay active in the labour market, with the rate of employment rising between 2012 and 2016 from around 65% to 71%.
CEBR projections show that the number of employed 50-64 year-olds will exceed 9 million before the end of 2018. By 2021 there will be 10 million 50-64 year olds in work.
Simon Heyworth, now 66, established his reputation in sound mastering at Virgin, then a relatively new music label. He worked as co-producer of Mike Oldfield’s Tubular Bells and has worked with music legends including Brian Eno, King Crimson, Imogen Heap, Marillion, Nick Drake and Kate & Anna McGarrigle.
In the summer of 2002 – aged 51 – Heyworth set up his own audio mastering studio in Devon: Super Audio Mastering. “I have never thought of retiring: I can’t afford it, and so when London got too expensive and we moved to Devon, I set up a new business here without giving a second thought to my age,” he said.
“The benefit of starting one’s own business later in life is that you bring a wealth of experience and knowledge with you that takes years to build up,” he added.
There are a number of reasons why older people turn to self-employment. Older workers can be edged out of employment and find it hard to find new work. Alternatively, older people in employment might feel they have accrued enough expertise to realise a long-held ambition of starting their own business.
But Kay Daniel Neufeld, senior economist at CEBR and author of the report, said the growing reliance on older generations to drive prosperity could cause concerns among policymakers looking to incentivise younger prospective business leaders to grow their own ventures.
“Self-employment among the over-50s has risen much more quickly than it has for younger cohorts, driven by demographic factors such as the rising average age of UK workers, as well as structural changes in the labour market,” she added.