Entrepreneurs do not have to be young
Last week, 24-year-old Leah Totton won the chance to set up a new business with Sir Alan Sugar on the Apprentice. Earlier this year, Yahoo paid 17-year-old London schoolboy Nick D’Aloisio (pictured) £18m for his news app Summly. Most famously of all, Mark Zuckerberg created Facebook aged just 19 whilst still at university. But in our admiration of these impressive career beginnings, are we ignoring the potential of older generations?
There is a body of evidence that shows that you don’t have to be young to be a successful entrepreneur. Surveys find that entrepreneurs with high-growth companies are more likely to have been over 25 when they started their company compared to those with low-growth companies. For tech companies in the entrepreneurial United States, the average age of company founders when they started their business is 39, with twice as many aged over 50 than under 25.
There is an important reason for this. A lot of research shows that prior work experience can help budding entrepreneurs spot gaps in the market. Between 50 per cent and 90 per cent of start-up ideas come from people with prior work experience. In many cases, those with a few more years of experience may be better equipped with the knowledge and skills to spot profitable opportunities and exploit them – in the process creating valuable businesses that contribute to boosting economic growth and job creation. But at the same time, these highly skilled people are also likely to have attractive employment options open to them – and are less likely to prefer self-employment to employment compared to their younger counterparts.
Often, new high-growth start-ups are equated with fresh young entrepreneurs. The Government, understandably keen to develop a greater culture of entrepreneurship, has supported a number of measures and schemes to encourage young people to consider starting up in business as an option. These include Start-Up Loans, available to 18-30 year olds and encouraging schools to give pupils experience in running businesses and student-run enterprise societies.
But in focusing on getting young people aspiring to be entrepreneurs, there is a danger that we leave out other sections of the population who have the skills and experience to create the types of businesses that contribute to UK productivity. There is a need to better understand what holds these potential high value entrepreneurs back, and what can done to encourage more of them to harness their expertise to drive the growth of a thriving entrepreneurial sector. The future Mark Zuckerbergs don’t necessarily have to be in their teens.
Nida Broughton is senior economist at the Social Market Foundation.
Kitty Ussher is Chief Economic Adviser at Portland and a former Treasury minister
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