The Effect of Aging on the Innovative Behavior of Entrepreneurs

The populations of economically developed countries are rapidly aging. This represents a sign of demographic success but at the same time it poses several problems for these societies, among which would be an eventual loss of entrepreneurial spirit. Concomitant with the latter idea, the body of empirical literature has shown that the probability of starting a business seems to increase with age up to a threshold point (between 35 and 44 years of age) and to decrease thereafter. However, this does not automatically imply that the innovative attitude of those who opt for an entrepreneurial career in an older population is lower than that characterizing a younger population. One may, indeed, surmise that more efforts will be exerted to introduce innovations as a strategy to compensate the negative effects produced by the shrinking in labor force size and in human capital productivity. Establishing whether population aging has an impact on the innovation attitude of entrepreneurs is crucial to offering a better understanding of the ways through which aging my affect economic growth. In the present paper, we implement a cross-country analysis aimed at answering the following research questions: are older individuals characterized by a lower probability of becoming entrepreneurs? If this turns out to be true, then are the entrepreneurs operating in older societies less or more prone to innovate?