As Associate Professor of Entrepreneurship at Aalto University, my research focuses on the role of entrepreneurship in addressing the grand challenges emerging in aging populations across the world. During the past decade, my research group has concentrated on developing our theoretical and practical understanding of the antecedents, challenges and outcomes of late-career entrepreneurship.
With improved birth control, higher levels of education, and the greater numbers of women pursuing careers, birth rates have declined sharply in all developed and most developing countries. Simultaneously, advances in medical care have led to greater average life expectancy. These two trends have combined to significantly increase the average age of the global population, making this one of the grand challenges to be addressed in coming decades. The aging global population is an issue that will affect individuals, organizations, and societies around the world.
Self-employed individuals tend to retire later
Finding sufficient public funds to maintain the current level of pension and healthcare provision is of huge concern at the societal level. Some policymakers have suggested raising the statutory retirement age, which many countries have done. Nevertheless, organizations have been forced by economic circumstances to offer older staff voluntary redundancy packages and incentivize early retirement. Some of those staff would want to continue working, but struggle to find new jobs. There is thus a lack of alignment between society’s needs, the wishes of individuals, and corporate practices.
Recent policy and academic discourses have increasingly pointed to later-in-life entrepreneurship as one promising path to extend older workers’ careers. Policy makers are interested in promoting late-career entrepreneurship as it fosters the deployment of older workers’ human capital. It also offers savings in pension and welfare entitlements, as self-employed individuals tend to retire later than their employed counterparts.
Starting a business can increase work-life balance
With this in mind, my research has demonstrated that starting a business can increase flexibility in managing work-life balance. It presents an opportunity to circumvent instances of age discrimination within organizations, and it may be the only viable alternative to resume economic activity for those who have been laid off at a mature age. I have also shown how running a business can particularly help women at an older age, empowering them to break free from the ‘gendered’ entrepreneurship discourse dominated by the stereotypical image of the young, male entrepreneur.
Still, in order for the promotion of late-career switches to entrepreneurship to be socially sustainable, making this transition needs to be an attractive choice for the individual. Here, my group’s research has developed the theoretical and practical understanding of the different key strategies that late-career entrepreneurs can apply. These are needed in order to circumvent age-related constraints experienced in their closer social and business environment, and so to gain the needed legitimacy for their new business.
Our work also shows that making the switch from organizational employment to entrepreneurship at an advanced age can make the individual better off. We have provided evidence that late-career transitions to entrepreneurship improve ‘older’ people’s quality of life, measured as the extent to which an individual’s needs for autonomy, control, self-realization and pleasure are satisfied. We have also demonstrated how late-career entrepreneurs pursue work-life patterns that optimize their quality of life, and that this supports their intention to postpone retirement to maintain the desired work-life patterns.
In a nutshell, I advocate a more holistic understanding of the benefits that come from working. We need to address its concrete implications on quality of life, with the understanding that people do not start a business just to earn money. I also emphasize the need to move away from the aging models that emphasize dependence, to models of active aging (e.g. through entrepreneurship) that better address the personal needs of an aging society.
Associate Professor of Entrepreneurship at Aalto University School of Business and an Academy of Finland Researcher
Photo: Mikko Raskinen
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