Entrepreneurship is increasingly becoming the world’s primary source of socio-economic value creation, new research claims, with “transformational entrepreneurship” set to take centre stage.
The research comes from Startup Genome, a US-based project that aims to increase the success rate of start-ups and accelerate the pace of innovation globally.
It was founded by entrepreneurs Bjoern Herrmann, Max Marmer and Ertan Dogrultan.
In an essay titled Transformational Entrepreneurship: Where Technology Meets Societal Impact, Marmer described how technology entrepreneurship and social entrepreneurship are converging.
“Entrepreneurs are awakening to the possibility of combining the scalable tools… of technology entrepreneurship with the world-centric value system of social entrepreneurship,” Marmer wrote.
“Together they create a new type of entrepreneurship that could become our primary source of socio-economic value creation.”
Marmer pointed to high-growth, established technology companies such as Apple, Amazon and Google, and some of the younger tech giants including Facebook, Twitter, Groupon and Zynga.
“Collectively, these companies have created almost a trillion dollars in new wealth over the last decade and a half,” Marmer wrote.
“All of these companies were created by high-growth technology entrepreneurs, making inner workings of entrepreneurship ecosystems like Silicon Valley the stuff of legend.”
“Yet although Silicon Valley has mastered the art of building technology companies, it hasn’t yet developed the moral compass to figure out which companies are worth building.”
Marmer argued there are too many talented entrepreneurs building “meaningless” ventures, which is where social entrepreneurship comes into play.
“The emergence of ‘social entrepreneurship’ attempts to fill this moral void by refocusing energy and resources on important social problems,” he wrote.
“While social entrepreneurship is promising, its impact has been limited to date as its solutions are rarely devised with scalability and true economic sustainability in mind.”
Marmer said in order to make the transition to a new socio-economic era, entrepreneurs need to focus the “enormous power” of capitalism on the world’s most important problems.
This would mean uniting the scalable tools of technology entrepreneurship with the moral ethos of social entrepreneurship – what Startup Genome dubs “transformational entrepreneurship”.
“Transformational entrepreneurs earn their name by creating innovative solutions to the world’s biggest problems that are scalable, sustainable and systematic,” Marmer wrote.
“The organisations that have the greatest impact have scalable business models that produce products and services millions of people are willing to pay for.”
In addition to identifying businesses that aim to solve major worldwide problems, Startup Genome has also identified organisations that have harmful social impacts.
“[Examples include] fast food chains and fossil fuel companies, each which create significant health and environmental externalities,” Marmer wrote.
“The opportunity to reinvent society is within our power, but the future doesn’t invent itself… Ask the entrepreneurs you know how the company they are starting is transformational.”
“Get people talking, reading, writing, researching and creating in the spirit of transformation –because it is our best hope for reviving socio-economic progress.”