A new global study, part of the Global Entrepreneurship Monitor ("GEM") project, has found that just 9.8% of the world's entrepreneurs expect to create almost 75% of the jobs generated by new business ventures. The report looks at what it calls high expectation entrepreneurs as all start-ups and newly formed businesses which expect to employ at least 20 employees within five years. Although these businesses would still be considered relatively small businesses by US standards, they have far reaching consequences for many of the economies in which they operate, particularly because of their impact on job creation and innovation.
The report's key findings include:
- Among country groups studied, more high expectation entrepreneurial activity occurs in North America (USA and Canada) and Oceania (Australia and New Zealand) than in any other country group. For these groups, high expectation entrepreneurial activity ranges from 1% to 1.6% of the adult population
- Among five countries studied individually, high expectation entrepreneurial activity is highest in the USA (1.6% of adult population), roughly twice the rate in the UK and Germany (0.7% each)
- Worldwide, 9.8% of entrepreneurs expect to create 74.1% of all jobs born out of new business ventures
- High expectation entrepreneurial ventures are most prevalent among well-educated men aged 25-34 years with high incomes
The report recommends "removing 'dis-incentives' for entrepreneurial growth" and supporting education for potential entrepreneurs. These are, once again, two of the most important public policies to support entrepreneurial development. The other is a simple tax system with relatively low tax rates.
As I like to say, offer entrepreneurs educational support and get the government out of their way!
