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Accenture-G20 Young Entrepreneurs’ Alliance (YEA) study reveals that 10 million new jobs can be created by fostering technology-enabled ecosystems (entrepreneurs, large companies and other bridgemakers) and business-friendly government policies.
The study is based on an online survey of 1,080 young entrepreneurs in all G20 countries as well as inputs from workshops, online forums and expert interviews. It shows that entrepreneurs consider themselves a key driver of the global economy. Almost 62 percent of the surveyed entrepreneurs expect to post revenue growth of more than 5 percent, and 85 percent say they are critical to creating jobs for young people in their country.
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Talent and Education
The study confirms that young entrepreneurs have been the frontrunners in innovation and digital technology adoption to achieve strong growth and job creation. Ninety-one percent of the surveyed entrepreneurs who say innovation is important to them plan to create jobs in 2014. For example, social, mobility, analytics and cloud (SMAC) technologies enable entrepreneurs to build new business models, participate in the sharing economy and create solutions that answer critical needs, such as remote health monitoring, at an affordable cost.
This report, developed for the G20 YEA Summit 2014, focuses on:
Three factors—open innovation, globalization, and access to skills and talent—that play a critical role in helping entrepreneurs achieve the scale required to create jobs and grow.
How large companies and other enablers called bridgemakers can support start-ups in their growth journey.
Policy actions that can create a more nurturing environment for entrepreneurs and help them achieve their business goals.
The study found that there are some scalability challenges that can hamper entrepreneurs’ potential to successfully act as economic growth engines and job creators. These include:
Access to funds. While sufficient funding is available to generate early stage growth, the capital needed for further growth is very limited in most cases.
Continual innovation. While innovation is part of the DNA of the founders of entrepreneurial businesses, as the company grows, sustaining an innovation mindset becomes more difficult.
Internationalization. Although expanding to new geographies is an important driver of scalability, very few start-ups have the tools to effectively go beyond their home countries.
Securing the right skills. Having the right talent on board is one of the most critical drivers of start-up growth, but the required skills can change depending on a company’s stage of development.
Our research found three important factors that can help entrepreneurs achieve the desired scalability:
Entrepreneurs thrive on open innovation facilitated by digital technologies. Bridgemakers—especially large companies—play a critical role in today’s open innovation ecosystem as they can help translate entrepreneurs’ ideas into marketable products.
Seventy-six percent of the surveyed entrepreneurs see open innovation as an enabler and 34 percent think it is a major enabler.
Ninety-one percent of entrepreneurs who consider open innovation as a major enabler expect the highest revenue growth and 89 percent believe it is more likely to create new jobs.
Eighty-six percent of the surveyed entrepreneurs say they collaborate with customers to cocreate offerings.
Seventy percent of the surveyed entrepreneurs describe themselves as “social” entrepreneurs—actively contributing to the local community or developing solutions to social problems along with their pursuit of economic profitability.
The new generation of entrepreneurs is “born global.” They believe that global expansion is important to job growth and that digital technologies facilitate such expansion. Multinational companies are key bridgemakers to accelerate entrepreneurs’ international expansion.
Sixty percent of the surveyed entrepreneurs want to expand internationally.
Seventy percent of the surveyed entrepreneurs who launched their firms in the past 12 months are already contemplating international expansion.
Seventy-three percent of the surveyed entrepreneurs who plan to expand internationally feel that digital technologies are important to their expansion plans.
Key barriers to international expansion identified include logistics costs, finding local partners, access to finance and lack of local market knowledge to identify new opportunities.
Entrepreneurs succeed or fail on talent—digital skills shortage hits entrepreneurs hard. Entrepreneurs are key job creators in the G20 countries, however skills shortage, lack of labor market flexibility and access to finance are barriers to more youth jobs.
Forty-four million young people are unemployed in G20 countries.
New firms generated half of new jobs in the past 10 years.
Seventy-four percent of the surveyed entrepreneurs expect to create jobs in 2014.
Seventy-eight percent of the surveyed entrepreneurs face challenges in recruiting the right skills for development.
If barriers were removed, 10 million new youth jobs can be created in G20 countries; decreasing youth unemployment rate from 13 percent to 10 percent.
Read the report for details of these findings.
Entrepreneurs say governments can play a major role in helping eliminate barriers to starting and scaling businesses. Only one-fourth of the surveyed entrepreneurs said that actions taken by their government to support entrepreneurial innovation are relevant and efficient.
To improve the performance in the three areas of open innovation, globalization, and access to skills and talent, governments can take the following actions:
Boost entrepreneurial open innovation by:
Foster global expansion of entrepreneurial companies by:
Help create more jobs by:
Supporting vocational training and apprenticeship.
Generating more science, technology, engineering and mathematics (STEM) graduates.
Increasing general labor market flexibility.
Fostering an entrepreneurial culture among the youth.
Encouraging development of more agile types of working environment and forms of employment.
Facilitating development of new categories of companies focused on social outcomes as much as on economic and financial ones.
Accenture and our partnership with the B20 and G20 Young Entrepreneurs’ Alliance
The promise of digital entrepreneurs
July 17, 2014
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