Hawaii is certainly better known as a prime vacation destination rather than a hotbed of entrepreneurial activity, but that does little to stop older adults from engaging in bold business ventures in the islands. From operating coffee farms to opening bake shops to selling handcrafted travel accessories, Hawaii’s population of adults over the age of 50 are across several dimensions the most active and innovative generation driving societal advancement. Far from a unique phenomenon, an MIT working paper finds that the average age of the founders of the most successful start-up companies at founding is 45 years old—not 23 year-old fresh-out-of-college graduates.
Meet the “encore entrepreneurs,” older adults who have graduated from several phases of life—including higher education, several phases of work experience, and parenting—and further pursue their passions through entrepreneurial activity later in life. Tech capitals like Silicon Valley and Kendall Square in the United States, Singapore, and more recently, Station F in Paris, all emphasize attracting youth talent, associating them with dynamism to a degree that can be exclusionary and ageist—hence, the Silicon Valley reputation for a demanding and punishing work culture.
Older Adults Have a Leading Role to Play in the Future of Work
The reality is, however, that modern interpretations of “productivity” neither reflect the reality of the driving forces behind innovation nor necessarily conduce towards a healthier society for all. If post-World War II work culture was characterized by the construction of robust social security systems and a conceptual transition from “labor” to “work,” then work culture today—especially in the US—is informed by the erosion of the post-war consensus about social security, and the rise of a conflicting gig work-abundant yet high-technology-driven economy. The debate surrounding artificial intelligence speaks to fears about the loss of autonomy and humanity threatened by the rise of technology that may transcend assistive roles and culminate in human replacement. Perhaps this is why the phenomenon of older adults employed in undesirable or “physically taxing” jobs (due to inadequate pensions or labor market disruptions like COVID) is so distressing. If the loss of individual autonomy is taken for granted as a natural consequence of aging, it seems for many as if the only path left to financial security is to relegate oneself to menial jobs far from the dignifying and innovation-driven sectors at the forefront of the economy.
The prevalence of and growth in the number of older adult entrepreneurs, then, provides an important counterweight to the negative manifestations of modern work culture and productivity standards. Encore entrepreneurs possess a potentially rich wealth of experience, human and financial capital, and social connections that are all well-suited for growing successful businesses. In fact, a 50 year-old start-up founder is 1.8 times as likely to see a successful exit as a 30 year-old founder, with a successful exit defined as either growth of the business until acquisition or initial public offering, or top-level employment after five years.
Several famous older entrepreneurs include Amanda Feilding (UK), who founded the biotech start-up Beckley Psytech in 2018 at the age of 76; Harland Sanders (US), who founded Kentucky Fried Chicken in 1952 at the age of 62, and Radha Daga (India), who founded Triguni Eze Eats in 2011 at the age of 69.
Strikingly, more women tend to be encore entrepreneurs than men in the US (10 percent versus 7.5 percent, respectively, according to a 2010 report). In Japan, specific efforts have been pioneered by the government in recognition of the contributions of first-time older adult entrepreneurs to society and to encourage a larger proportion of female-led businesses, which are still a small minority (women make up 11.4 percent of female executives in Japan as of 2022, compared with 45.2 percent in France and 31.3 percent in the US). Under the Kishida government, the Japan Finance Corporation, a government-owned public corporation, established a program to support older adult entrepreneurs over the age of 55 and women with loans and other financing capital for their start-up ventures.
As the ripple effects of COVID continue to transform the nature of work, older adults have seen lower barriers to undertaking entrepreneurial ventures—taking the future into their own hands—even as these opportunities pose new risks. The rise in adults who work from home in the United States (11.8 percent between 2019 and 2022) coincided with a 1.2 percent increase in total factor productivity across all industries, and yet without a corresponding in hourly compensation. For older adults, who make up the majority of small business owners in the United States, the number of those age 55 to 74 working from home rose accordingly (7.7 percent in 2019 to 15.6 percent in 2022), with the increase more dramatic among those with tertiary education (24.4 percent with a bachelor’s degree among those age 55-74 working from home in 2022 versus 6.8 percent among those less than a high school degree). There are considerable negative effects of remote work for the older adult population, including possible increased risks of loneliness and isolation. However, the phenomenon of telework has also empowered older adults to explore new ventures, lessened the impact of in-person workplace discrimination and ageism, and increased the proportion of older adults with disabilities and impairments employed in the labor force.
Ageism in the Workplace: Employed by Choice or Necessity
Despite this, older adults still face enormous discrimination in the workforce, whether implicitly as they age while employed, or explicitly as they compete for jobs with younger candidates. Although illegal under the Age Discrimination in Employment Act of 1967 and the Age Discrimination Act of 1975 in the United States, which protects workers and applicants over 40, American employers continue to perpetuate ageist hiring decisions or negative workplace environments for older adults. In conjunction with observations that 17 million, or 1 in 3 Americans age 65 and older face economic insecurity (with incomes below 200 percent of the Federal Poverty Level) and high rates of unemployment post-COVID (of which older adults were the primary victims), barriers to employment erode the opportunity for older adults to live financially secure via post-retirement age employment.
Beyond the United States, even rapidly aging societies like Japan also face a huge task when it comes to changing perceptions and policy regarding older adults’ workforce participation, let alone their economic stewardship as potential encore entrepreneurs. The Japanese political economy’s trademark employer-based system of social insurance has seen recent expansion and reform to extend coverage to and encourage employment for older adults 65 and older. Like many other developed countries (20 of the 36 OECD countries), Japan raised its pension eligibility age from 60 to 65 (under the Employees’ Pension Insurance, or kosei nenkin) with the aim of facilitating the retention of older adults employed in the workforce. In a reversal from the Japanese private sector’s tendency to impose mandatory retirement (94.7 percent of surveyed firms in 2020), set typically at 60 years of age, the government’s current policy since 2021 mandates firms to make available employment opportunities that extend up to age 70.
The rationale behind Japanese mandatory retirement is to ensure that wages are fairly and sustainably apportioned to the productivity of an individual—wages remain relatively stable throughout employment to account for generally higher productivity-to-wage ratio during youth and generally lower productivity-to-wage ratio past the age of 60. Wage cuts and contract re-negotiations are common past age 60 to ensure the hiring of youth, and especially females, who tend to suffer most from low labor market fluidity in Japan. Still, among major economies, Japan’s older adult workforce participation rate is second only to South Korea at 25.2 percent, significantly ahead of the US, Canada, the UK, Germany, Italy, and France in descending order. These two factors, however, obscure two underlying realities: one, that older adults in Japan as in other societies, are often employed not out of choice but necessity due to economic stagnation, and two, that policy reforms that over-emphasize social welfare tend to overlook or de-emphasize the capabilities of older adults.
In some respects similar to Germany’s training and skill acquisition paradigm, Japan’s firm-driven system of social insurance imbues its older adults with both general and firm-specific knowledge considered most valuable by younger colleagues in the workplace. This unique advantage of and social investment in Japanese older adults should leave them well-positioned for encore entrepreneurship, but their potential is left largely unexplored due to unsuitable national economic conditions. A 2024 white paper on small and medium-sized enterprises in Japan explores opportunities for older adult business owners as entry points with vast potential for intergenerational and foreign collaboration. In the span of 30 years, the number of adults over 65 as a proportion of new entrepreneurs grew from 8 percent to 33 percent in 2012, emerging as consultants, artisans, and rural-communitarian problem-solvers.
Despite well-intended initiatives, survey research from Japan suggests a tendency to mismatch older adults with job opportunities or else provide them with no support, with implications for similarly-positioned societies that understand well the necessity of older adult retention and integration in the labor force. For example, in India, older adults tend to undertake harrowing, labor-intensive, or precarious jobs characteristic of informal employment. This amounts to 73 percent of Indian older adults age 60 and over who engage in “agricultural activities, casual labour, or unskilled occupations which require less education.” Relegating elders to leftover jobs, or as in Japan’s case, to focus policy efforts on ensuring a base level of social insurance at the expense of individual agency within the workplace, may perpetuate a kind of ageism that accords ostensible respect for older adults but denies them recognition of their unique merits and liberation from stereotyping in practice.
Encore Entrepreneurship as Empowerment: Stewards of Tomorrow
Still, one might yet question the fundamental premise of encore entrepreneurship. After all, the distinction between older adults employed in undesirable, ill-suited jobs and older adult entrepreneurs is contingent to a large degree upon physical and mental capability, access to resources, and prior education or work experience. The most socially isolated or lonely older adults tend to lack at least one of the criteria crucial for encore entrepreneurship, especially suitable access to a social network. Moreover, highlighting encore entrepreneurship may be perceived as reinforcing the centrality of work in pursuit of meaning in life, which is far from consensus, especially for older adults who find themselves employed in poor-quality jobs.
The purpose behind highlighting the rise of encore entrepreneurs, however, is not primarily to normalize the universal employment of older adults nor to suggest that they ought to consider pursuing new business ventures and start-ups in old age. By no means is encore entrepreneurship the solution to relief from isolation and loneliness. Rather, the real emergence of encore entrepreneurs demonstrates to societies across cultures and continents that harnessing the great virtues and capabilities of older adults are just as important as ensuring the sufficient receipt of social protections.
Older adults are not just people to be empowered—they empower people. Their vast social networks and repository of experience have been enriched over time, place, and effort, and there is as much a 50 year-old first-time entrepreneur can do for a 90 year-old person as a 20 year-old person can do for a 60 year-old person. Reversing their exclusion and isolation from society requires taking positive measures to support their freedom to pursue opportunities without barriers to discrimination. Each individual, from the US to Japan to India, has the right to decide how they would like to live life after contributing their livelihoods to the benefit of society—whether through seeking purpose in an entrepreneurial venture of their own, or in using their wealth of expertise and life experience to steward the world into the future.