A new World Economic Forum study, Global Entrepreneurship and the Successful Growth Strategies of Early-Stage Companies, is chock full of insights about the state of global entrepreneurship today. While I can’t do justice to the whole report in short blog post, here are a couple of key take-aways.
- The report examines key opportunities and challenges facing early-stage firms. In both cases, the major issues –both challenges and opportunities—relate to two factors: 1) Market Opportunities, Customers and Competitors, and 2) Human Resources and Organization Culture. Successful firms effectively address these issues; failed firms do not. Somewhat surprisingly, the researchers find that these success factors don’t differ much by country. Entrepreneurs everywhere face similar challenges and opportunities.
- A very small cohort of ambitious entrepreneurs are the real drivers of economic growth. But, at the same time, these firms also account for a majority of job losses. According to the study, the top 1% of firms account for 44% of job creation by new companies. But, this cohort also accounts for 53% of job losses. So, the picture is extremely volatile and unstable. There are numerous implications to these results. At a minimum, they suggest a deeper look at company management practices to ensure that firms avoid self-inflicted wounds during the growth process. They may also suggest that these new companies pioneer new markets but lack the scale and capacity to dominate these markets, which in turn become market opportunities for existing larger firms.
I can highly recommend a close review of this interesting and and thought-provoking study.