Successful entrepreneurs are usually university-educated, work in partnerships, and conduct a significant portion of their business internationally, according to a new report by Ernst & Young.
Ernst & Young’s 2011 High-impact entrepreneurship global report is based on a survey of more than 800,000 people from 60 countries, including 70,000 entrepreneurs.
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Ernst & Young defines “high-impact entrepreneurs” as having estimated growth of at least 20% per annum in their business.
The report reveals high-impact entrepreneurs usually start their companies when they are aged 26 to 45, and are more likely to be university-educated than the general population.
In addition to working in partnerships, the report shows high-impact entrepreneurs are most likely to conduct a significant portion of their business internationally.
According to the survey, nearly one-third of these entrepreneurs rely on international clients to make up at least 25% of their customer base.
However, the report highlights how tough it is to become a successful entrepreneur.
“Although close to 10% of survey participants were entrepreneurs, very few of them have achieved high or even moderate rates of growth,” it says.
“Only three out of every 1,000 respondents to the survey had founded a business that achieved high rates of growth.”
Maria Pinelli, Ernst & Young global vice-chair of strategic growth markets, says while there is a “really important pool” of entrepreneurs in the world, only a minority have founded businesses that achieve an average 20% or more estimated growth.
“To replicate this group of ‘super entrepreneurs’, there needs to be the right social culture and educational system… to equip them with the right skills and behaviors,” Pinelli says.
In terms of their attitudes, Pinelli says high-growth entrepreneurs have little fear of failure – and are among the most likely individuals in the survey to start a business – “because they perceive that there is an opportunity to be grasped”.
“In addition, once these entrepreneurs become successful, they are the most likely to start funding other ventures as angel investors,” she says.
According to the survey, the most striking difference between entrepreneurs from developed countries and emerging markets is their motivation to start a business.
Nearly 40% of high-impact entrepreneurs in emerging markets started their business to increase their personal revenues, while those in mature markets were looking for more independence.
Pinelli says entrepreneurs have a responsibility to create jobs and fuel economic activity, but are held back by a lack of funding.
“It is amazing to me that this group of business leaders… are not supported and acknowledged for the critical role they play in creating societal benefits,” she says.
“They clearly need more support and attention in fiscal and government policy.”