The older, the wiser and also the less innovative? An empirical analysis of the relationship between population aging and innovativeness

Entrepreneurship is generally considered the engine of growth, given its role in introducing innovations into the economic system. Developed countries have already become a victim of rapid aging of their populations, while the similar trend has just started in developing countries. The previous literature has suggested that aging and nascent entrepreneurship are negatively related. This study investigated the relationship between aging and innovation using dynamic panel techniques. We found that the level of innovation activities represented by the number of patent applications is negatively related to aging. This association remains even after other demographic and institutional confounders are taken into account. We also found that education and flexibility of business regulations are positively related to innovation.