or institutional endorsement by any participating company or organization involved in the work or mentioned in the report,
The life stages in practice Dynamics of being a Young company Dynamics of being an Adolescent company Dynamics of being a Maturing company Dynamics of being an Adult company Reflections on impact and job creation Chapter 5:
Over the past three years, they have grown revenue by 56%and increased employment by 64%creating much needed jobs.
I have had the privilege to work with high-impact entrepreneurs, trailblazers in their industries who generate significant economic benefits.
While previous work has looked at large-scale global studies, this work gets up close and personal with some of the most impressive entrepreneurs.
We analyze what makes them successful what their challenges are, and what they need to succeed.
societal impact, wealth creation (for themselves, their employees and often customers), and yes employment. Only by considering all those dimensions together can high-impact entrepreneurial ventures develop their full potential.
The report shows some interesting quantitative results for example, the entrepreneurial ventures in this sample outperformed comparable equity indices comfortably by a factor of two.
This work could never have been done without the generosity of our longstanding partner EY, who gave us privileged access to very special entrepreneurs and expertise.
The work also benefited tremendously from the expertise and bandwidth that Endeavor Global and Purpose provided both high-impact entrepreneurial ventures in their own right,
who it has been a privilege to work with. Twenty years ago, many of today's world-leading ventures were born not yet.
and that high-impact entrepreneurs continue to shape the world for the better. 6 The Bold Ones Executive Summary
and have created significant wealth for owners, employees, and in many cases customers. But they, most importantly, also have made a real difference to society through the power of their innovation
However, in absolute terms, job creation is highest in this and the next life stage an important consideration for policy makers.
and will continue to explore the potential of disruptive and transformative entrepreneurship in our work going forward.
The founders of these firms marshal their forces along very different paths of innovation and job creation.
The research covered business strategies, economics and job creation. Entrepreneurial Ecosystems Around the Globe and Company Growth Dynamics, in collaboration with Stanford university, Endeavor Global and EY, analyzed what makes entrepreneurial companies successful in accessing new markets and scaling around the globe.
in that a small number of companies is responsible for the majority of observed benefits in job creation,
using the criteria of entrepreneurial spirit, innovation, personal integrity, financial performance, future plans and strategic direction, employee retention and employment practices, market impact, community impact
This is usually recognized in job creation, but applies equally to other aspects of entrepreneurial impact. Classical definitions,
and employment as an outwardly comparable measure to comprise 20%or greater annual growth in revenue and 20%or greater annual growth in employment over a three-year time period for enterprises with 10 employees or more.
or hire new employees. Unfortunately, when policy makers talk about"entrepreneurs, "the small business owners who don't want to grow are grouped often together with the rare founders who scale companies.
we believe that more attention is needed to support the work of these types of founders in the coming years.
while revenues and employment are clear validations of high-impact, we believe there is more to the story
Fig 2. 2 Dimensions of entrepreneurial impact Fig. 2. 3. Relative job creation over 2 years for Eoy sample Innovation/customer benefits Job creation Wealth
creation Societal impact Impact on job creation The 628 companies studied in this report created approximately 162,000 net jobs over the most recent two-year fiscal period prior to the 2013 competition.
Fig. 2. 3. shows the relative job creation over 2 years for the whole sample, award winners and national finalists.
Breaking down the Eoy sample by age reveals that employment gains sustain momentum as these companies mature,
when it comes to job creation, a narrow focus on early-stage companies would be misguided. 0 200 400 600 800 1000 1200 Median headcount COMPANY AGE RANGE Number of employees Net change in number of employees,
last two fiscal years 0%20%40%60%80%100%120%140%160%180%Median headcount growth 0, 5) 5, 10) 10,15
) 15,20) 20,25) 25,30) 30,35) 35,40) 40,45) 45,50) COMPANY AGE RANGE YEARS Fig. 2. 4. Employment and job creation by company age Impact on wealth
and ambition of their enterprises that allow others to share in this wealth creation early employees in technology firms being a good example,
former NBA legend with the Los angeles lakers, makes his work look effortless. But behind the magnetic smile, big hugs and amenable personality is a man who is prepared always to do
Through our work launching groups like Walk Free, a 6 million person movement and global fund to end modern slavery,
Our work consulting to leading corporations, foundations and nonprofits confirms how quickly organizations are seeking to adapt to this type of change
just as innovations in product, job creation and capital deployment are. High-impact Entrepreneurs Who Transform Industries 13 Chapter 3:
With a strong executive team in place Gopro has built rapidly out its infrastructure, increasing headcount from 135 employees to more than 400 within the last year.
My biggest challenge was learning how to go from being the leader of a very small team
Finally, the chapter will revisit the question of job creation across life stages and industries to arrive at some insights that might stimulate the rethinking of some established paradigms.
therefore with two proxies one the concept of marginal job creation (a concept we will return to later in more detail) how many new jobs a company creates as a percentage of its existing workforce over a certain time frame.
At the same time, the US economy added 3. 6m jobs to an existing base of approximately 136m a marginal job creation rate of 2. 64%.
Median Return on Assets data for Entrepreneur Of The Year participant companies Fig. 4. 3. Marginal 2-year job creation rates for Eoy sample and the US economy
Ulukaya hired a team of four former Kraft employees to help bring the plant back to life.
It is also worth noting that more than 75%of US firms have less than 20 employees so within the first few years of their life span,
As firms transition from a small enterprise with double-digit staff into organizations that have different departments
leading to potential distractions if their interests are aligned not fully with those of the founder (or, more frequently, other key employees).
hiring a consultant from a prominent franchising firm. The consultant helped Doggis standardize operations and build a franchising model.
By 2005, with 100 restaurants, Doggis had become the biggest franchise chain in Chile. In recent years, Oscar and Ricardo began pursuing a portfolio strategy.
Today, Oscar and Ricardo employ more than 1, 200 workers. Gopro: Partnering with a larger partner-riding the Youtube wave At its start,
and built a stable operating platform, investment in human resources (hiring, training and retention) is seen as critical to sustaining competitive advantage.
but its approach to employees and the community in general. In the very first year, I realized how much of an impact this plant had on the local community,
where hard work and openness is respected and valued. I wanted to make that culture part of our own.
The Oregon-based company has more than 44,000 employees worldwide, with reported revenue of US$24. 1 billion in FY12, making it the planet's largest sports brand.
In other words, his work can have a huge impact. Down the line, Hatfield sees the company still making sneakers and apparel,
It works phenomenally well. Within the Kitchen, Hatfield's subdivision is Special Other Operations, or the ZOO, where he gives his team a great deal of license to create a stimulating environment.
as they inherently penalize against a high employee or revenue base with a total of 7,
Roa EBITDA/sales sales/assets 32 The Bold Ones Reflections on impact and job creation In this closing section, we revisit briefly the impact discussion in Chapter 2,
along the dimensions of Innovation and customer benefits Job creation Wealth creation Societal impact It is implicit from the life stage discussion that individual companies will have different profiles along those impact dimensions during their life.
A cash-strapped startup will 15.9 18.0 53.2 55.0 37%76%53%26%Young Adolescent Maturing Adult Total new jobs'000 Marginal job creation
and employees (yet might already create wealth for its customers) but when the firm is maturing,
however, is on the topic of job creation. Fig. 4. 16 shows marginal and absolute job creation rates over two years by life stage.
A marginal job creation rate of 37%for Young companies means that over the course of two years,
they added 15,900 jobs to a base of 58,700. The results fall in line with a lot of academic research the lion's share of marginal job creation takes place when companies scale, not in the start-up phase.
It is worth noting that the sample results are skewed by some large Young companies in the Traditional industry group.
when applying, we can compare the relative job creation rates as exemplary for high-impact companies across the US economy.
Absolute and marginal two-year job creation by Eoy contestants by life stage As probably expected, the marginal job creation rate is highest for Frontier industries and lowest for Traditional industries
policy makers should take note of its strong contributions to employment. This is of course not to denigrate the other two industry groups,
and plot again absolute and marginal job creation at the level of a median company in each industry group, displayed in Fig 4. 18.
High-impact Entrepreneurs Who Transform Industries 33 24.1 77.1 40.8 63%33%37%Frontier Traditional Services Total new jobs'000 Marginal job creation
Absolute and marginal two-year job creation by Eoy contestants by industry group As an example, the median Frontier company started with 98 employees two years ago
While again marginal job creation is highest in the Frontier category, it is interesting that Services companies create the highest absolute number of jobs at a per-company level.
Median absolute and marginal two-year job creation by Eoy contestants per company 62.0 60.0 72.0 65%32%42%Frontier Traditional Services Total new jobs
Marginal job creation 34 The Bold Ones High-impact Entrepreneurs Who Transform Industries 35 After an extensive analysis of a data set containing some of the most impressive entrepreneurs
Sales and Employees were amongst the top descriptive words from this elite class of entrepreneurs. market employees technology production customers people management financial family mobile strategy innovation
to consider how the company can have the biggest impact on innovation and customer benefits, on job creation, on wealth creation,
and to shape agendas in areas of job creation and financing Conclusions for policy makers how to support high impact entrepreneurs Policy makers often have an uneasy relationship with entrepreneurs on the one hand,
Prosperity, employment, innovation. On the other hand, more than other business forms, it is hard to pin down what an entrepreneur actually is, let alone a highimpact one.
In addition, it should be clear from our discussion in the closing section of the last chapter that different industry groups have both different job creation profiles (if that is the relevant policy context) and different needs.
Because an entrepreneurial ecosystem it will only be successful and sustainable if it works for all stakeholders.
I LOVE NEW YORK. Prior to that she was Director of Business Planning at Louis vuitton, Vice president at Pearson and Senior Consultant at William Kent International (WKI).
and educational seminars for various business organizations and professional associations across the globe. He has authored five books
His professional experience includes practice in the fields of accounting and finance as an analyst, auditor,
and business consultant. He earned his undergraduate and masters degrees from Penn State university USA and his Ph d. from the University of Connecticut, USA.
Rottenberg is considered one of the world's most dynamic experts on entrepreneurship and emerging markets
She currently serves as an adviser to Abraaj Capital, a leading private equity investor in global growth markets.
Morris worked as a consultant at Bain & Company. There, he was engaged on a variety of projects focused on international growth strategy development, customer segmentation and acquisition,
His previous work experience also includes serving as the confidential assistant to the mayor of Baton rouge, Louisiana, USA.
His work been recognized in publications like The New york times and The Economist. Jeremy began his career with the strategy consultants Mckinsey and Company.
He was educated at Harvard university and the University of Sydney and is a citizen of Australia and The netherlands.
and led its growth to over one hundred staff and over $50m in revenue. Prior to founding the US organization, he held a number of roles for the World Economic Forum in Switzerland.
Kevin continues to work with Mckinsey as a Senior Advisor related to its societal engagement and sits on several for-profit and nonprofit boards,
To participate, firms must have 10 or more employees or more and exhibit a strong growth trajectory as measured by market share and profits.
Within the report, we utilized the OECD's definition of highimpact for entrepreneurs who exhibit 20%or greater annual growth in employment and 20%or greater annual growth in sales over three years for entrepreneurs with 10 employees
REF 160614 In collaboration with A t. Kearney Fostering Innovation-driven Entrepreneurship in Europe 3 Contents Preface 3 Preface 5 Executive Summary 7 Section One:
putting at risk its outlook for productivity, growth, human capital development and job creation. This report, part of the World Economic Forum's Fostering Innovation-driven Entrepreneurship in Europe project, examines
in addition to 1, 132 survey respondents and numerous global and European experts from academia and civil society.
and in particular the project workstream leaders and advisory board members, for their generosity with their time, ideas and support for this work.
both by continuing to promote its work around innovation-driven entrepreneurship, and through a new research project focused on open innovation ecosystems in Europe.
then Scale up A European Agenda to Foster Innovation-Driven Entrepreneurship 11 22 44 57 1 Innovation Fostering Innovation-driven Entrepreneurship in Europe 5 Executive Summary
As a result of this collaboration, four central ideas have emerged from the Forum's work in this field. Fostering innovation-driven entrepreneurship in Europe requires a comprehensive view of the entire entrepreneurial life cycle. 1 Section two describes how the life cycle of an innovationdriven entrepreneurial venture can be divided into three phases stand up,
The Forum and its partners will continue to support this work, in particular through further research and dialogue on how to foster the development of a robust European Open Innovation Ecosystem.
and in the Eurozone in particular, where growth rates remain low and unemployment stubbornly high. Europe continues to struggle to increase its competitiveness and set its economy on a more solid footing.
SMES experience high levels of organizational and employment churn, symptomatic of the real but volatile growth,
innovation and employment opportunities they present. Figure 3 shows that SMES in different European countries have performed very heterogeneously,
and making a significant difference to growth and employment across Europe. 7 Figure 3: SMES Struggling to Reach
or Exceed the 2008 Level of Employment and Value Added5 Source: Project Team based on Eurostat This report focuses on the challenge of scaling innovative entrepreneurial organizations.
or join a market innovator start-up or SME as an employee Start up Assessing the success factors for an entrepreneur in establishing an innovative organization and making it a viable venture,
and number of employees, in particular identifying and realizing win-win opportunities for collaboration between market leaders and market disruptors Employment (2014e relative to 2008 level) Valueadded (2014e relative to 2008 level) 0. 9 1
. 4 1. 3 1. 2 1. 1 1. 0 0. 8 0. 7 0. 6 0. 7 0. 8 0
number of companies per country Increase in employment or value-added Decrease in both dimensions Increase in employment and value-added 10 Enhancing Europe's Competitiveness In the following pages,
including licensing, tax and labour market regulations. Market framework refers to the availability of necessary inputs
advisers and enablers who transfer know-how and create opportunities for growth. Figure 4: A Life cycle Model for Entrepreneurship6 Source:
and only 41%perceived them as somewhat or very favourable (see Figure 7). These results are more positive than many experts engaged in the project expected.
or the willingness and ability to take the risk of joining an innovative start-up as an employee. 12 Figure 10 details a conceptual model for the factors influencing
and have more control of one's work (67%of respondents), to create an innovative offering to take to market
engaging in entrepreneurial activities is less attractive in terms of job security (64), %financial benefits (29%)and long-term career prospects (26%).
%Concern about financial benefits is greater among respondents potentially joining an entrepreneurial venture as an employee (37%)than those starting their own venture (29%.
as well as those mechanisms that help protect against the employment and financial risks of creating or joining a new venture.
Employees of the Finnish start-up Rovio had developed 51 programmes, none of which was a commercial success. After going through this, their 52nd programme, Angry Birds,
and on job creation in organizations featuring programme participants. 17 This is strongly reinforced by the Forum's survey,
Self employment is a less popular option today than it was in 2009, with a clear majority in the European union (EU) now favouring work as an employee.
Another is the prevailing attitude towards entrepreneurs which, while favourable, lags the professions. While 79%of Europeans tend to agree that entrepreneurs create new products
%since 2007 The EU is home to 19.0 million micro companies (those with less than 10 employees),
Many European venture capital experts say the sector is stronger than the long-term data indicate. Today
considering their capacity to manage collaborations without compromising their core fields of work. Developing culture and organization Fostering a collaborative culture and organization Both a soft cultural and a hard organizational component need to be considered:
and monitoring degree of openness The not-invented-here syndrome that leads to external work being seen as competition
Martin Vollmer, Chief Technology Officer, Clariant Developing culture and organization Promoting an R&d setup with specific organizational structures integrating employees, partners and customers Barclays Open Innovation:
and Israel, led by a senior executive with enough credibility in the company to champion collaboration cases.
Second, BT involves senior executives early in the collaboration process, by organizing meetings with selected companies during dedicated off-site sessions.
Running an entire division aimed at providing digital services to UK SMES helps senior executives understand the perspective of smaller companies
connections between challenges and solvers Innocentive works with over 300 000 solvers from more than 200 countries,
A team of 15 ABB employees collaborated with Fastned to develop the concept. DSM/Provexis:
Could you estimate what proportion of SME employees in your country are working in innovation-driven SMES?
labour market interventions to improve access to talent, and projects to improve framework conditions for crossstakeholder or cross-regional collaboration between various actors.
The initiative will start in 2015 with a planned budget of €24. 9 million as indicated in the Innovation in SMES work programme.
and venture capital to SMES and will work in conjunction with Horizon 2020. In early 2013, the Commission launched a public consultation on how to foster the supply of long-term financing
grow faster and employ more workers. Fostering Innovation-driven Entrepreneurship in Europe 35 Toomas Hendrik Ilves President of Estonia The role of innovation-driven entrepreneurship in your economy:
Enterprise Estonia has established a network of salaried professional export advisers residing in major target markets,
The growth outlook and ambitiousness of enterprises is expressed by entrepreneurs'expectations concerning the increase in employee numbers as well as their ambitions on the international market.
expectations of early-stage enterprises concerning a fast increase in employee numbers (i e. more than 10 employees in five years and over 50%of growth) are lower,
remaining lower when compared with the respective indicators in Latvia and Lithuania. Key activities on an agenda to foster innovation-driven entrepreneurship in Europe:
Incentivizing co-creation, including programmes to support innovation clusters Entrepreneurship promotion: Promoting entrepreneurship as a career choice and raising general awareness on entrepreneurship Start-up Estonia programme:
poor links between universities and the labour market don't help. We should be giving tax incentives to start-ups.
they might encourage a corporate culture with spin outs and employee circulation; and they might view being located in a strong and innovative entrepreneurial ecosystem as a long-term value.
and entrepreneurship is the driving force behind employment and job creation in Portugal. A recent success in fostering entrepreneurship:
and Employment, introducing an assertive agenda along three key intervention areas (human capital, R&d and financing),
The adequate promotion of a consistent innovation-driven entrepreneurship policy requires us to focus on five defining factors to successfully reindustrialize Europe:
the promotion of research and innovation; the continued improvement of our European workers'skills and knowledge;
the access to adequately priced financing, in particular for SMES; the advancement of the EU internal market and access to international markets;
Recent successes by The netherlands in improving the conditions for innovation-driven entrepreneurship are the top sector approach, valorization grants and an action plan for skilled technical workers.
the importance of this issue decreases while the relevance of other difficulties increases, including severe competition, availability of skilled employees and managers,
and cost of production and labour. Key activities on an agenda to foster innovation-driven entrepreneurship in Europe:
Hire staff by reforming employment law, helping up to 1. 25 million businesses cut their employment costs,
and supporting apprenticeships. Develop new ideas by helping businesses accelerate innovation and by improving intellectual property protection.
Break into new markets, simplifying access to the £230 billion public procurement market, helping small businesses improve their online presence and supporting exports.
and momentum by connecting stakeholders better Together, focusing stakeholders on what works at scale, connecting actors and developing effective partnership approaches can lead to a more integrated innovation ecosystem that can contribute to growth in European industries
Strengthening this connection has an effect for both the next generation labour force and the education system. Teachers and professors can be trained as entrepreneurship developers to inspire
Partner to encourage active engagement in start-ups as employees and as founders. Individual attitudes and skills can be influenced effectively by direct experience in a start-up environment, for example through internship programmes or employment opportunities.
These experiences build on school-based programmes and often lead to employees founding their own businesses.
Connecting and partnering to help entrepreneurs start up As outlined above, a key challenge for European entrepreneurs is accessing critical resources,
and direct it towards venture markets Supporting entrepreneurs to access skilled employees to join their ventures Providing mentoring to new founders Providing more opportunities for potential entrepreneurs to obtain practical experience in an innovative business
Global Shapers Hub, Lisbon We should create a board of mentors and advisers for young European changemakers.
among members about immigration or labour market issues, and on identifying avenues for consensus with external partners on the protection of personal data?
Formal long-term employment contracts between individuals and corporations would become investment relationships in which individuals dedicate capacity and skills in a corporate ecosystem.
the first question for executives will be whether they can understand the direction and forces underlying current shifts.
The Forum welcomes your input on the work described in this report and your desire to be engaged in its upcoming research on Open Innovation.
please email europeentrepreneurship@weforum. org. 56 Enhancing Europe's Competitiveness Endnotes 1. The entrepreneurial life cycle is defined here as including the factors influencing an individual to turn an idea into economic activity or join a start-up as an employee,
while an equal number say it is challenging to find workers with the skills they need.
Papers, No. 9 Fostering Innovation-driven Entrepreneurship in Europe 59 Acknowledgements Adviser and Knowledge Partner:
A t. Kearney Kai Engel, Partner and MD, Germany, Lead Partner for Innovation and Research & development Management Eva Diedrichs, Managing director, A t. Kearney IMPROVE Holding Work Package
-YE Europe Alumni Research+Data Insights, a Hill+Knowlton Strategies company David Iannelli, President Amber Ott, Senior Account Supervisor YES Dimitris Tsigos, President
Gavin Patterson, Chief executive officer Jean-Marc Frangos, Managing director, External Innovation, BT Technology, Services and Operations European Institute of technology Daria Golebiowska-Tataj, Executive Board member
Global Agenda Council on Youth unemployment Mark Rutte, Prime minister of The netherlands Aymeric Sallin, Founder and Chief executive officer, Nanodimension, USA;
Young Global Leader Luis Alvarez Satorre, Chief executive officer, Global Services, BT, United kingdom Tobias Schmidtke, Senior Consultant, A t. Kearney, Germany Bohuslav Sobotka
, European Investment Fund, Luxembourg Fostering Innovation-driven Entrepreneurship in Europe 61 Jeroen Van der veer, Executive Member of the Governing board, European Institute of Innovation and Technology, Hungary;
Co-Director, Centre on China Innovation, China Europe International Business school (CEIBS), People's republic of china Krisztina Z Holly, Adviser, National Advisory Council for Innovation and Entrepreneurship
, USA Daniel Isenberg, Professor of Entrepreneurship Practice, Babson Executive Education, Babson college, USA Guriqbal Singh Jaiya, Director-Adviser, Innovation and Technology Sector, World
Intellectual Property Organization (WIPO), Geneva Eric Kacou, Cofounder, Entrepreneurial Solutions Partners (ESPARTNERS), USA Harkesh Kumar Mittal, Adviser and Head, National Science
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