CLICK HERE to read the full Endeavor Insight, Omidyar Network, and Aspen Network of Development Entrepreneurs report, “Why Becoming Large Matters: How scalable, high-growth entrepreneurs can help solve the jobs crisis” or use the interactive Job Creation Calculator.
The world needs to create more than 500 million new jobs by 2020 to provide career opportunities for the currently unemployed as well as young people who will be joining the workforce. The bulk of this challenge falls on countries in the developing world. In fact, over 90% of the new jobs needed in the next eight years must be created outside the United States and Europe. In Sub-Saharan Africa, more than 100 million jobs are needed by 2020. Latin America will require more than 50 million new jobs and the Middle East and North Africa are not far behind.
Enabling high-potential small- and medium-sized enterprises (SMEs) to grow to become large businesses is one of the most important mechanisms for solving the job creation crisis. On average, an SME that grows into a large business creates more than 200 jobs. Organizations which support entrepreneurship in emerging and growth economies have found that scalable SMEs exist across an array of industries and sectors, particularly technology and consumer goods. The potential impact of these SMEs is quite significant.
While the development of new micro-businesses and SMEs also creates jobs, both do so on a much smaller scale. On average, micro-businesses employ around 2-3 people. The typical SME employs 20-30. It would take an enormous number of new 2-3 person or 20-30 person companies to have a tangible impact on hundreds of millions of new jobs needed across the world.