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Many company closures await when elderly small business owners retire
Date:11/1/2011

The population of the EU is becoming older, and an ever smaller number of people have to provide for the ageing population. In Sweden, an already critical employment situation is exacerbated by the fact that 25% of managers of small and medium-sized businesses plan to retire in the next five years, and this is estimated to lead to a company closure in one in ten cases. Research from the University of Gothenburg now shows what can be done to keep elderly people in the labour market.

Under the EU-funded research project Best Agers, researchers at the University of Gothenburg have conducted demographic studies of the Vstra Gtaland Region and Norrbotten. "Larger cities also cope well in the longer term. But large parts of the countryside, including in Vstra Gtaland Region, are affected by low birth rates and outward migration. It will be difficult to maintain community services in those areas," says Roland Kadefors, a docent (associate professor) at the Department of Work Science of the University of Gothenburg.

The researchers have conducted demographic analyses and made projections of outward migration and future age structures.

Small and medium-sized companies companies with fewer than 250 employees account for a large share of employment in Sweden's small municipalities. Sweden has one of the oldest sets of managers in that category of businesses in Europe, for historical and political reasons. 25% of these business owners will retire in the next five years, and 40% within ten years. This is equivalent to 55,000,000 companies, 175,000 companies if sole traders are included. These companies account for more than 700,000 jobs. The risk of closure is estimated at around ten per cent, equivalent to 70,000 jobs.

"Generational changes are critical times for small businesses. Either a family member or am employee takes over or the company is sold to an outsider, and that can either go well or go badly. The alternative is to c
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Contact: Roland Kadefors
roland.kadefors@av.gu.se
46-031-786-3224
University of Gothenburg
Source:Eurekalert  

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Many company closures await when elderly small business owners retire
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