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Lookup NU author(s): Dr Simon Parry, Dr Oliver Mallett
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License (CC BY-NC 4.0).
This paper examines the motivation behind a later-life move into entrepreneurship by individuals who have pursued a successful career in employed work into their 50s. Prior research has found that the effect of age on the probability of engaging in some form of entrepreneurship follows an inverse U shape. Probability increases with age up to the 35 to 45 year old range after which it decreases. Existing theory has explains this age effect in terms of the opportunity cost of time: as an individual gets older, they become less willing to invest energy in activities such as founding a new business, which involve both risk and deferred financial returns. Since time is a relatively more scarce resource the older you become, then older individuals attach a higher discount rate to the stream of future rewards from entrepreneurship than do younger people. By looking at a particular category of what we call ‘privileged entrepreneurs’, we challenge theory that is built upon the presumption of a motivation that is future oriented. If the entrepreneur’s motivation is one of self-actuation, fulfilment with work, happiness and a sense of doing something worthwhile, the reward is more immediate and does not necessarily involve deferred gratification. If there is a sense that ‘time is running out’ in the older nascent entrepreneur, the present-oriented reward of fulfilment will be more attractive than a future-oriented financial one. The paper is built upon in-depth semi-structured interviews with three individuals who pursued successful careers into their fifties before deciding to move from full-time employment to start their own businesses. Through an exploration of the individuals’ background and experience, their motivation for starting their own business, their choice of business and their experiences as entrepreneurs, we build a rich picture of the motivational drivers of ‘privileged entrepreneurs’. The study reveals that personal circumstances which can come as a result of a successful career can open opportunities for the individual to consider work that they find more fulfilling, rather than purely financially rewarding. As a consequence, the motivation which drives work choices can shift from financially focused deficiency needs to growth needs such as personal fulfilment and self-actualisation. Individuals who have been unable to satisfy these growth needs through employed work use their financially privileged position, networks and experience gained from their employed work to turn to self-employment as an alternative. Our findings provide new insights into the motivations of an important group of senior entrepreneurs: those who are in the privileged position of choosing personally fulfilling entrepreneurial activity. The insights from this study have implications for the development of more finely tuned policies and support mechanisms that recognise the heterogeneous range of motivations, needs and goals of older entrepreneurs. It adds to our understanding of entrepreneurial motivation in terms of the broader and more subjective motivations that lie beyond purely financial reward. The study also has implications for employers in terms of better understanding of why they are losing valuable older employees because of a lack of personal fulfilment
Author(s): Parry S, Mallett O
Publication type: Conference Proceedings (inc. Abstract)
Publication status: Published
Conference Name: Institute for Small Business and Entrepreneurship Conference
Year of Conference: 2016
Online publication date: 26/10/2016
Acceptance date: 26/07/2016
Date deposited: 05/12/2016
