"Inclusive Institutions and the Rise of Senior Entrepreneurs in the Longevity Economy"

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Jul 04, 2023

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"Inclusive Institutions and the Rise of Senior Entrepreneurs in the Longevity Economy"

Introduction:

Inclusive economic institutions play a crucial role in determining a nation's sustained economic growth. These institutions allow and encourage the participation of a diverse population in economic activities, leveraging their talents and skills. On the other hand, extractive institutions exclude the majority of the population from political and economic affairs, leading to stagnant growth. This article explores the significance of inclusive institutions and their connection to the rise of senior entrepreneurs in the emerging longevity economy.

Inclusive Institutions and Economic Participation:

Acemoglu and Robinson define inclusive economic institutions as those that enable individuals to make their own decisions regarding their work lives. Moreover, these institutions require the broad inclusion of the population in economic activities. To achieve inclusivity, economic institutions must protect secure private property rights, maintain an unbiased legal system, and provide public services that create a level playing field for economic exchange and contract. By allowing individuals to actively participate in economic affairs, inclusive institutions foster innovation, productivity, and sustainable economic growth.

Extractive Institutions and Stagnant Growth:

In contrast, extractive institutions remove the majority of the population from political and economic participation. While some individuals, such as landowners, may possess economic power and property rights, the masses are deprived of agency and opportunities for growth. Throughout history, societies that have relied on extractive institutions have struggled to achieve long-term, stable economic growth. Although certain nations, like the USSR, experienced temporary economic growth under extractive methods, they ultimately failed to sustain it. Inclusive institutions, which enable large segments of the population to engage in political and economic systems, are essential for long-term growth and development.

The Rise of Senior Entrepreneurs in the Longevity Economy:

In recent years, there has been a significant demographic shift towards an aging population. In the United States alone, individuals aged 50 and above constitute 35% of the total population, accounting for a staggering $8.3 trillion (approximately ¥870 trillion) of the country's GDP. This demographic, known as the longevity economy, presents immense opportunities for economic growth by catering to the needs and preferences of older adults. With the progression of aging, the longevity economy is predicted to expand rapidly, with the senior population in the US projected to reach 157.3 million by 2050, accompanied by a $28.2 trillion (approximately ¥2,960 trillion) economic scale.

The Intersection of Inclusive Institutions and Senior Entrepreneurship:

The rise of senior entrepreneurship in the longevity economy intersects with the concept of inclusive institutions. Inclusive economic institutions empower individuals to make their own decisions and participate meaningfully in economic activities. This empowerment extends to senior adults, who possess a wealth of experience, skills, and entrepreneurial aspirations. By creating an environment that encourages and supports senior entrepreneurship, inclusive institutions enable older adults to contribute to economic growth and societal development.

Actionable Advice:

  • 1. Foster an entrepreneurial ecosystem: Governments and organizations should create supportive frameworks that facilitate the growth of senior entrepreneurship. This includes access to capital, mentorship programs, and networking opportunities specifically tailored to older adults.
  • 2. Promote age-inclusive policies: Policies should be implemented to combat ageism in the workforce, encourage intergenerational collaboration, and provide equal opportunities for older entrepreneurs. This includes initiatives such as age-blind recruitment, age-diverse advisory boards, and targeted training programs.
  • 3. Foster lifelong learning and skill development: Investing in lifelong learning programs and skill development for older adults is crucial to empower them with the necessary tools and knowledge to succeed as entrepreneurs. This can include initiatives like workshops, online courses, and mentorship programs focused on entrepreneurship and business management.

Conclusion:

The wealth and poverty of nations are intricately linked to the presence of inclusive or extractive institutions. Inclusive economic institutions that promote the participation of a diverse population in economic activities are vital for sustained economic growth. As the longevity economy continues to emerge, there is a unique opportunity to harness the entrepreneurial potential of older adults. By nurturing inclusive institutions and supporting senior entrepreneurship, societies can unlock the economic potential of their aging populations, leading to prosperity and societal well-being.

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