High-Expectation Entrepreneurs – Education Is The Key
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Only a small percentage of start-up entrepreneurs can expect to create 20 jobs in their first five years of business, according to a report released this month by accounting and advisory group Mazars, in collaboration with the Global Entrepreneurship Monitor.
According to the Global Report on High Growth Entrepreneurship, high-expectation entrepreneurs account for just 7% of global start-up activity. The high-expectation entrepreneur is typically a young male, has a higher education, comes from an upper-income household and has little fear of failure.
However, they make a disproportionately large contribution to economic prosperity and job creation.
The report was based on interviews with 678714 adults spanning 53 countries over a period of six years, making it the largest study of high-growth entrepreneurship yet conducted. It provides important clues as to the make-up of the high-expectation entrepreneur.
An individual’s decision to launch a new venture is affected by both the environment, and his or her personal characteristics and skills.
“It’s a combination of these two elements that determines whether a particular opportunity has potential for growth in the eyes of any potential entrepreneur,” said Hilton Saven, senior partner of Mazars Moores Rowland, the South African arm of the Mazars group.
There is a sharp division between early-stage, high-expectation entrepreneurs and their already established high-growth counterparts. Almost 20% of the early-stage group were between 18 and 24 years old, while only 3% of the established group fell into this age bracket, with more than 50% over 45 years old.
Only 30% of all categories of entrepreneurs were women, whereas less than 25% of the high-expectation and high entrepreneurs were female.
Education and household income, as well as entrepreneurial activities and attitudes, were significantly associated with high-expectation and high-growth entrepreneurship.
High-expectation and high-growth entrepreneurs had a higher level of education than other entrepreneurs and the general population. “This perhaps reflects the higher opportunity costs faced by this group, as highly educated individuals typically have more alternative employment opportunities,” Saven said.
