The E&Y survey found that the high-impact entrepreneurs, with an estimated growth of 20% per annum, usually start their companies when they are between 26 and 45 years old. They are more likely than entrepreneurs from lower-growth companies and the general population to have college or graduate degrees and they are likely to work in partnerships. Also, high-impact entrepreneurs are most likely to conduct a significant portion of their business internationally.
A new report released by Ernst & Young, Global Entrepreneurship Monitor and Endeavor, entitled 2011 High-impact entrepreneurship global report, provides insights into the characteristics of high-growth, high-impact entrepreneurs. The report is based on a survey of more than 800,000 people in 60 countries worldwide of who over 70,000 were entrepreneurs.
Although close to 10% of survey participants were entrepreneurs, very few of them have achieved high or even moderate rates of growth. Only 3 out of every 1000 respondents to the survey had founded a business that achieved high rates of growth. However, in the next five years, high-growth entrepreneurs expect to add between 3 to 15 times more jobs than low-growth businesses.
“As a group, entrepreneurs represent the best hope of creating sustained economic growth around the world. However, interestingly, the report shows that although there is a really important pool of entrepreneurs out there, only a minority have founded businesses that achieve an average 20% or more estimated growth,” Maria Pinelli, Global Vice-Chair Strategic Growth Markets for Ernst & Young said.
“To replicate this group of “super entrepreneurs” there needs to be the right social culture and educational system from the beginning of their development to equip them with the right skills and behaviors to build sustainable, globally focused high growth companies.”
In terms of their attitudes, high-growth entrepreneurs have little fear of failure and are among the most likely individuals in the survey to start a business because they perceive that there is an opportunity to be grasped. In addition, once these entrepreneurs become successful, they are the most likely to start funding other ventures as angel investors. Those who have invested in other businesses have placed on average a total of almost $90,000 in capital into these ventures.
High-growth entrepreneurs in high-income countries are more likely to rely on exports to reach a significant number of their customers. Nearly one third of high-growth entrepreneurs in high-income countries look to international clients to make up one-quarter or more of their customers. In emerging markets, this figure only drops to 18%.
“In emerging markets, entrepreneurship has an important role in propelling future growth. As these economies modernize and become more efficient, the best entrepreneurs will take advantage of new opportunities that arise in their own communities as well as those in other nations to lead the way in creating jobs and fostering economic growth in their countries,” Rhett Morris, Director at Endeavor’s Center for High-Impact Entrepreneurship, said.
In terms of personal attitudes and attributes, the most striking difference between entrepreneurs from developed countries and emerging markets is their motivation to start a business in the first place. Nearly 40% of high-growth entrepreneurs in emerging markets have started their business to increase their personal revenues, while those of mature markets were looking to be independent.
“These findings highlight that although there is an important pool of entrepreneurs globally, just owning a business is not enough. In developed economies where growth is still fragile, entrepreneurs have a vital role to play in helping to turn the corner. In 2011, the 44 country winners in Ernst & Young’s Entrepreneur of the Year award program delivered on average 21% growth in a slow economic environment. This statistic substantiates the High Impact Entrepreneurship findings; those high-growth entrepreneurs can buck the trend and deliver sustained growth in all economic circumstances. Entrepreneurs create jobs and fuel economic activity. However, the most common barrier to future growth is the lack of funding. It is amazing to me that these groups of business leaders – entrepreneurs – are not supported and acknowledged for the critical role they play in creating societal benefits. They clearly need more support and attention in fiscal and government policy. They can lead economic recovery,” Maria added.