Academic journal article New England Journal of Entrepreneurship

The Aging Population and Mature Entrepreneurs: Market Trends and Implications for Entrepreneurship

Academic journal article New England Journal of Entrepreneurship

The Aging Population and Mature Entrepreneurs: Market Trends and Implications for Entrepreneurship

Article excerpt

This article discusses the statistics and trends surrounding the rapidly aging U.S. population. Older workers will make up an increasing portion of the workforce and these individuals represent an important growing demographic target market. While much has been written about the aging population and the potential for entrepreneurs to target this growing market, little research has been conducted on older entrepreneurs. They are a unique group and this article provides empirical results and discussion about the differences and importance of older entrepreneurs to the economy and as contributors to American society. Practical implications and future research directions are discussed.

One of the most significant economic and sociodemographic trends in the United States is the aging of the American population. According to the U.S. Administration on Aging (AOA), one in eight (12.5%) Americans is now 65 years old or older. A century ago, just 4.1 percent of Americans were in that group. However, by 2030, it is expected that one in five Americans will be 65 or older (U.S. AOA 2007). As a result of medical advances, improved pharmaceuticals, and better education about healthy lifestyles, Americans are living longer, healthier lives .Thus, there have been, and will continue to be, significant changes to the demographic makeup of the United States.

In 2005, nearly 37 million Americans were 65 years old or older. By 2030, it is expected that the number of Americans who are 65 or older will nearly double to 71.5 million (Meyers 2007). By that time, this group of older Americans will represent more than 30 percent of all adults in the U.S. (Bosworth and Burtless 1997). These trends are not unique to the United States. The populations of major industrial countries are also aging rapidly. By 2030, those 65 and older will make up 40 percent of the adult populations in France and Great Britain, and an expected 50 percent of Germany and Japan (Bosworth and Burtless 1997).

When one looks at the sheer numbers of older Americans, the projections for the future, and the trends over the last several decades, it becomes clear that they represent a greater and greater percentage of the population. The "graying" of America, as well as other industrialized nations, presents both opportunities and challenges. For example, as the workforce gets older there are benefits of having more experience in the labor force, but the financial commitments of government programs such as Social Security and Medicare are also increasing (Bosworth and Burtless 1997; Pittock 2004).

The changing demographics have significant implications for entrepreneurship. For example, entrepreneurs are more likely to hire older workers and will have to become more cognizant of legal requirements, such as the Age Discrimination in Employment Act (ADEA) of 1967. The ADEA makes it illegal to discriminate against people who are older than 40 years of age. From a marketing perspective, the aging population represents a growing target market for entrepreneurs (e.g., Scarborough and Zimmerer 2005). As just one example of how this is creating new entrepreneurial opportunities, services such as for-profit hospice care have grown rapidly over the last 20 years (Newbold 2007). There is a significant shortage of geriatricians and the gap appears to be widening (Meyers 2007).Taking care of the elderly is already a multibillion dollar industry and the fact is that it will continue to grow.

Rather than look at the increasingly aging population as a target market for entrepreneurs to service, this article focuses attention on the unique qualities of older entrepreneurs, and discusses the growing need to promote entrepreneurship within the aging population. In coming decades, it is going to become more and more important for older Americans to remain financially productive. They will be living longer and they will represent a growing percentage of the population. …

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