ARE ENTREPRENEURS BECOMING “SOCIAL ENTREPRENEURS”?

ARE ENTREPRENEURS BECOMING “SOCIAL ENTREPRENEURS”?

 

The relationship between entrepreneurs and the ecosystem in which they operate is a complex, multifaceted relationship, as companies can only thrive in the long run if their ecosystem is flourishing, and the development of the ecosystem depends to a large extent of the way companies contribute to an inclusive, environmentally and socially responsible growth.

Interestingly, 70 percent of surveyed entrepreneurs (Figure 12a) consider themselves as “social entrepreneurs” either because they have a direct impact on their local community or because in their company profits are reinvested in the business itself (Figure 12b). In other words, many entrepreneurs who manage “for profit” businesses believe their mission goes beyond generating profits for shareholders.

 

This applies to a large extent regardless of the location of entrepreneurs. Except in the US, UK, Australia and Germany, a large majority of entrepreneurs, whether based in mature markets or emerging markets, consider themselves social entrepreneurs. Such a finding is contrary to the conventional wisdom that entrepreneurs collaborating for the good of their country or society are much more prevalent in emerging markets than in mature ones. Given the size of the challenges, especially related to youth unemployment, most entrepreneurs are willing to contribute to the development of their local community beyond their traditional commitment to grow their business and create jobs.

 

Can entrepreneurs create more jobs? Skills shortage and lack of labor market flexibility are particularly important barriers to creating more youth jobs. Several barriers prevent entrepreneurs from doing more to spur youth employment across the G20 countries. Barriers differ across countries due to the unique characteristics of local labor markets

The lack of labor market flexibility is also a significant barrier to hiring more young employees, especially for entrepreneurs in countries such as France, India, China or Italy. Entrepreneurs sometimes feel that the investment in training young people and building their business skills is too high given the lack of senior employees’ time to train and coach new recruits in small firms. One entrepreneur succinctly described the challenge: “People who have just arrived on the job market after graduating are usually skilled enough. What they lack is experience, which is part and parcel of the business acumen. They have to build their communication and business skills alongside their different work experience or temp positions.” To help them compensate for some of the specific investment required to give young people the required skills to be productive, a large number of entrepreneurs would appreciate incentives and a direct role in youth education Entrepreneurs could create 10 million new youth jobs A large majority of surveyed entrepreneurs are confident that they could create more jobs in the future than they are already doing. This would require a new paradigm described by the “3+1” formula: an active and sustained collaboration among entrepreneurs, large companies and bridgemakers, enabled by government through relevant public policies. Collaboration among these parties can take different forms, depending on the characteristics and most pressing issues of the local ecosystems (such as open innovation, globalization, education or more general technology development priorities). A large majority of entrepreneurs want more support from governments, large businesses and bridgemakers to help them sustain their contribution to economic growth and job creation.

 

In fact, entrepreneurs view collaboration across the public and private sectors as a potential game changer that may trigger a new wave of competitiveness and sustainable growth. Digital technologies make this game change possible, especially given the substantial possibilities offered by technology-enabled, open innovation. But for this to happen, adequate policy frameworks must be implemented and the necessary technology investment must be deployed at speed and scale (which we discuss in more detail in chapter 4). In this context—assuming entrepreneurs’ expectations are met—entrepreneurs’ job creation potential would be unleashed, resulting in 10 million new youth jobs potentially created across the G20 countries, according to an Accenture estimate (Figure 14)34. This would help drive the reduction of youth unemployment from 13 percent to 10 percent35. (See page 36 for details on Accenture’s job creation model.)

 

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