Aging populations avoid
entrepreneurship
Newswise — Countries where aging
populations are increasing faster than younger people may also see a
decline in entrepreneurial business activity according to new
research from Babson College Professor Maria Minniti, Research
Director of The Global Entrepreneurship Monitor (GEM), which
annually measures entrepreneurial activity worldwide.
Minniti and colleague Moren
Levesque, University of Waterloo, Canada, found that individuals
select career paths according to the dynamic interplay of age, risk,
and wealth. Older workers in waged-labor have less incentive to
start a new business because their current income is likely to
increase over time with experience and seniority. Younger workers
are free to take risks….they can afford to wait for economic
security, expect to live longer, and have fewer responsibilities --
family, mortgages, etc. -- to hold them down.
Their research entitled, The
Effect of Aging on Entrepreneurial Behavior, was published in the
Journal of Business Venturing 2006.
“The study,” according to Minniti,
“has important policy implications because it suggests that, unless
things change, countries with aging populations—like most European
countries—may expect a decline in entrepreneurial activity and
possibly growth.”
Minniti says that the United
States has never experienced this problem because of its historical
embrace of new immigrants. “Immigrants tend to be younger and have
more children to help build new businesses,” says Minniti.
“Obviously, our research can impact and contribute to the recent
U.S. debate on immigration.”
Babson College in Wellesley,
Mass., is recognized internationally as a leader in entrepreneurial
management education. Babson grants BS degrees through its
innovative undergraduate program, and grants MBA and custom MS and
MBA degrees through the F.W. Olin Graduate School of Business at
Babson College. Babson Executive Education offers executive
development programs to experienced managers worldwide. For
information, visit
http://www.babson.edu.