How to spur entrepreneurship in an aging population
Entrepreneurship is widely acknowledged as the basis for innovation, technological advancement and economic progress – and, subsequently, a driving force for improved living standards. Yet there’s little discussion, let alone action, among governments in Canada to stem the adverse effects of demographic change on entrepreneurship, specifically the aging of our population.
Most Canadians are aware that our population is aging. However, it’s not generally understood that as our population ages, the share of the population best positioned to be successful entrepreneurs – individuals in their late 20s through to their early 40s – will shrink. People in this age group drive entrepreneurship because they are both willing to take risks to start their own business while also possessing real-world business experience, which increases the likelihood of success.
The share of Canadians between the ages of 30 and 39 has already declined 16.6 per cent since the 1980s, and is expected to decline by another 11.4 per cent by the 2040s.
There has also been a corresponding decline in the rate of small business startups, a key measure of entrepreneurship. The rate of small business startups declined by 8.5 per cent when comparing the six years (2001-07) before the Great Recession to the following six years (2008-14), the most recent data available.