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The number of women and elderly people preparing to start new businesses has been rising amid the aging of the population and consequent decrease in the number of small and midsize companies as their owners retire, a recent government report says.

The annual white paper by the Small and Medium Enterprise Agency says there were more women in 2002 preparing to start new businesses than in the asset-inflated bubble economy period up until the early 1990s, and that 19.9 percent of company founders were age 60 or over, up from 15.6 percent in 1997.

About two-thirds of people 65 or older starting a business in 2002 chose the service sector. In the real estate industry, 65.2 percent of entrepreneurs were 60 or older, many of them landlords.

Officials of the agency, a branch of the Ministry of Economy, Trade and Industry, said senior citizens often become landowners or open shops with their retirement allowances.

Female entrepreneurs also set up businesses mostly in the service sector in 2002, while the number of women starting operations in the construction and transport industries was fewer than men.

Among women, relatively younger age groups launched businesses, as 52.2 percent in 2002 were less than 40 years old.

The report says women are more likely than men to start a business, in terms of those who want to and those who actually go through with it.

The number of small firms declined steadily following the peak of the bubble economy in the late 1980s and stood at about 4.33 million in 2004. In recent years, about 120,000 close annually.

In 2002, 43.1 percent of those who gave up their businesses were aged 60 or over, compared with 33.6 percent in 1997, marking a trend in which those who established companies in the postwar era began to retire en masse.

Of 290,000 business owners who terminated operations each year from 2001 to 2004, 24.4 percent cited lack of a successor as a reason. The white paper estimates that up to 350,000 jobs were lost every year due to closures caused by the succession issue.

Despite the need for generational change, preparations by aging business owners do not seem sufficient. Among those aged 55 years or older, 53.6 percent said in 2005 they have not consulted with anyone about succession. A third of those in this category said they had “not given serious consideration” to the matter.

The report shows that managers facing retirement without successors tend to close their businesses instead of selling them. Among owners aged 55 or older, 22.7 percent said they will opt for closure. The percentage was 8.9 percent in the younger age group.

The paper urges that information be provided to managers about mergers and acquisitions and the sale of businesses.