Older Americans took more entrepreneurial risks in 2008 while their younger counterparts took fewer.
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New research shows that entrepreneurial behavior among older Americans (44-99) rose significantly in 2008. Younger adults in the 18-44 age range -- traditionally the hotbed of US entrepreneurial activity -- reduced their entrepreneurial activity in 2008, according to the Global Entrepreneurship Monitor’s 2008 National Entrepreneurial Assessment for the U.S., produced by Babson College and Baruch College.
Babson College Entrepreneurship Professor and GEM author Julio O. de Castro, said she believes the increase in entrepreneurial activity by older Americans presents some interesting questions to consider in the next GEM report: "Is this a temporary or permanent trend? Or just a reaction to the economic recession?"
Entrepreneurial activity across the globe also took a dip, the number of people starting businesses with the potential to boost the economy and create new jobs declined 10 percent in the wealthiest nations during the recent global slowdown, according to GEM’s research.
“Throughout the world, would-be entrepreneurs reported greater difficulty in obtaining financial backing for their start-up activities, especially from informal investors-- families, friends, and strangers,” said Professor Bill Bygrave of Babson College, one of the founders of GEM. “This pool of money declined from $400 billion to $350 billion, a 12.5 percent drop.” This comparison is for 33 countries that participated in both the 2008 and the 2009 GEM surveys.
But there may be light at the other end of the tunnel of innovation.
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In 2009, even as the number of people starting businesses in wealthy countries declined, a quarter of new entrepreneurs felt the prospects for their businesses are rosier than a year earlier, according to GEM’s research. New entrepreneurs tended to be more optimistic than established business owners.
“Clearly, the slowdown has led to changes in the environment for entrepreneurs with investors holding back financing and consumers buying less,” said Kristie Seawright, Ph.D., Executive Director of GEM. “What is needed is for entrepreneurs to feel comfortable venturing out again, because they are the real engine for creating new jobs.
Unfortunately, there is not a silver bullet for entrepreneurs. Each country needs to develop the right formula to encourage business startups.”