Reinvigorating growth and job creation is a major challenge facing G20 (Group of Twenty) governments, which is why they should pay closer attention to how they support entrepreneurial innovation.
Entrepreneurs are valuable because they bring new ideas to life that can create entirely new markets or revitalize existing ones—and, in the process, spur economic growth and create jobs. Recent research conducted by Accenture among 1,000 young entrepreneurs across G20 countries confirms the important role entrepreneurs play in a country’s economy.
A majority of entrepreneurs we surveyed are optimistic about their ability to drive growth and create jobs in the coming years, and 78 percent of them feel technology-driven innovation is a strategic priority for their businesses. One-third of the entrepreneurs surveyed, and 45 percent of those with headquarters in an emerging market, expect the next wave of innovation to come primarily from emerging markets.
To develop their businesses, innovative entrepreneurs are eager to collaborate with large companies. They also feel that technology clusters, inspired by Silicon Valley, can provide a vital ecosystem for entrepreneurial success: One-third of the respondents work in a local technology cluster and 57 percent would like to work in one. And they would like to see governments do more to support entrepreneurial innovation, citing 12 policy actions they believe can help shape an environment that encourages entrepreneurs to pursue their ambition.
Large companies, governments and entrepreneurs all have a role in making entrepreneurial innovation work. Working together, these three groups can devise the right combination of approaches and policies that can unleash entrepreneurial innovation while respecting the diversity of G20 economies.
In 2012–13, Accenture, in close cooperation with the Young Entrepreneur Alliance’s global management and country associations in G20 countries, conducted comprehensive research on how G20 countries can support entrepreneurship to help drive economic growth, productivity, innovation and employment. The research was designed to highlight entrepreneurs’ views on the importance of innovation in their businesses, what they consider drivers and inhibitors of entrepreneurial activity, and what they expect from government policies.
Our research included an exclusive online survey of 1,000 young entrepreneurs, eight workshops with entrepreneurs in selected countries and interviews with a variety of experts on entrepreneurial innovation. The resulting research report was prepared for the G20 Young Entrepreneurs’ Alliance (G20 YEA) 2013 Summit in Moscow.
Five key findings emerged from our research:
Today, every entrepreneur is a digital entrepreneur. Technology-driven innovation is a strategic priority for 78 percent of the survey respondents, who are extensively leveraging a range of new information and communication technologies to lower the cost of access, create new products and services, reach customers at scale and speed, and develop new business models.
These innovations make entrepreneurs confident about their role as catalysts. At a time when global economic growth is slowing and volatile, 41 percent of the respondents are confident that their business will grow more than 8 percent per year and 81 percent believe they will create new jobs in the next two years.
China is considered by entrepreneurs as the second-most innovative country after the United States. Greater growth opportunities, abundant supply of technologically skilled workers and fewer constraints are making China and other emerging markets an increasingly strong source of innovation.
Entrepreneurs increasingly believe collaboration is vital to success. One-third of our respondents already collaborate with large companies on innovation and another 46 percent are planning to do so in the next two years.
Entrepreneurs favor technology clusters in the Silicon Valley model. Adapted to different business and cultural environments, these clusters can provide a vital ecosystem for entrepreneurship development.
Governments can and should play a major role in encouraging entrepreneurship. But two-thirds of the entrepreneurs surveyed believe government support for entrepreneur-driven innovation is not sufficient. They expect a wide range of actions from the government to promote innovation such as tax incentives, development of technology education and training, and increased government purchasing of products and services from small businesses. They also suggested several measures that G20 governments could implement to promote technology innovation:
Support the development of digital infrastructure to ensure entrepreneurs and their ecosystems (clients, suppliers, etc.) get access to digital transformation of industries, especially through social, collaborative technologies.
Facilitate international mobility of data, while ensuring adequate protection of personal data—a key success factor for entrepreneurs who develop international businesses.
Promote cloud development based on harmonized standards, so entrepreneurs can “put the cloud to work” and create additional value.
Develop common open data standards that enable entrepreneurs to create, test and develop new business models to provide citizen services.
Make it easier to attract serial entrepreneurs who set up and conduct businesses in different countries.
Encourage development of crowdfunding at the international level as an alternative route for startup financing.