Page 69 - IJPS-9-2

International Journal of
Population Studies Relationship between population aging and innovativeness

secure property rights, a fair and balanced judicial system, 1.1.2. Aging, entrepreneurship, and innovation
contract enforcement, and effective constitutional limits on Parker (2009) emphasizes that the U-reverse-shaped
the government’s ability to transfer wealth through taxation relationship between age and the probability of becoming
and regulation encourage productive entrepreneurship an entrepreneur is one of the most robust findings in the
and foster economic development (Acemoglu & Johnson, empirical literature about entrepreneurship. Specifically,
2005). Furubotn & Richter (2005) have also extensively numerous studies have shown that the probability of
explored how institutions, including laws, property rights, starting a business tends to increase with age up to a
social norms, and governance systems, can either facilitate threshold point (between 35 and 44 years of age) and then
or hinder economic development. decreases thereafter (among others, Kautonen et al., 2014;
Figure 1 provides a schematic representation of the Levesque & Minniti, 2006; 2011). More recently, Zhang
innovation process. The core of the process (depicted in the & Acs (2018) suggested that the shape of this relationship
yellow area) revolves around the firm and its entrepreneurial varies depending on the type of entrepreneur. They found
drive to innovate, which influences investment in R&D that the probability of being a full-time entrepreneur
and other innovation-related activities. Thus, the firm is tends to decrease with age, while the opposite trend
ultimately responsible for introducing innovation into was observed for part-time entrepreneurs. In addition,
the economy. The blue area in Figure 1 encompasses they confirmed the U-reverse-shaped relationship for
institutional and structural factors such as legal, economic, incorporated entrepreneurs but not for unincorporated
financial, and educational elements, which establish the ones. Interestingly, they also found that the propensity
rules and range of opportunities for innovation. At the of novice entrepreneurs compared to non-novice
same level, scientific knowledge cumulated in a society entrepreneurs follows a U-shaped age pattern, with a dip
is a fundamental component in the innovation process, around the age of 60.
as remarked by Schumpeter and later on proven by both To avoid confusion, we need to specify that the age
exogenous and endogenous growth models. distribution of entrepreneurs is not generally skewed
The transfer factors (represented in the green toward young ages. On the contrary, as highlighted in a
area) include all the elements that facilitate the flow of report jointly released by the OECD and the European
information and skills from the scientific environment to Commission in 2019, individuals over 50 make up more
the firm level. This concept is borrowed from the second than 48% of self-employed people. Hence, it is nascent
edition of the OSLO Manual, jointly proposed by OECD entrepreneurship but not entrepreneurship as a whole to
& EUROSTAT (1997), for collecting data on innovation. be menaced by population aging. Our paper also attempted
For instance, this dimension includes university to investigate if this will affect the innovative capabilities of
dissemination activities, collaborations between research societies.
institutions and firms, workforce mobility from the Recently, Liang et al. (2018) proposed a model
research sector to the private sector, and cultural values highlighting the importance of the skills acquired through
like trust that can promote information sharing and on-the-job training, the perception of the business
collaboration. opportunity, and the risk tolerance involved in deciding
to start a business. In an older society, older individuals
typically occupy leadership positions in firms, which
reduce the opportunities for young workers to acquire
business skills early in their careers. This implies that
younger individuals, even if highly skilled, have a lower
expectation of becoming entrepreneurs. Azoulay et al.
(2020) also showed that the fastest-growing firms are
founded by middle-aged entrepreneurs rather than
younger individuals.
Using data from the Global Entrepreneurship Monitor
on nascent entrepreneurship, Ruiu & Breschi (2019)
found that while individuals over the age of 50 are less
likely to become entrepreneurs, if they decide to do so,
they are more likely than their younger counterparts to
Figure 1. A representation of the factors that lead to innovation
Note: The authors’ reworking of a scheme originally proposed in OECD introduce radical and innovative products or services.
and Eurostat (1997). However, older nascent entrepreneurs are not very likely

Volume 9 Issue 2 (2023) 63 https://doi.org/10.36922/ijps.0429