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Report on Scale-Up Entrepreneurship in the U.K. Examines Research from Endeavor

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A new report titled The Scale-Up Report on UK Economic Growth has identified the impact of scale-up companies on the country’s economy and highlighted the importance of supporting high-impact, high-growth firms. Authored by entrepreneurship influencer Sherry Coutu, the report utilizeEndeavor’s research and work to underscore the need for policies and programs that support businesses through the critical scale-up phase.  

The report defines scale-ups similar to the way that Endeavor Insight and other organizations like the OECD and Nesta do. According to its analysis, a scaleup is “an enterprise with average annualised growth in employees or turnover greater than 20 per cent per annum over a three year period, and with more than 10 employees at the beginning of the observation period.”

The report found that scaleups are quite rare. There are more than two million businesses in the U.K., but only 8,923 of these companies are scaleups. However, these businesses accounted for a huge share of the country’s job and wealth creation. A study cited in the report noted that the fastest-growing 6 percent of U.K. firms created over half of its new jobs. The analysis included in the scaleup report also estimates that if the U.K. can increase the number of scaleups in its economy, it will generate an additional 238,000 jobs and £38 billion in value within three years.

If scaleups are so critical, it is important to understand what they need in order to continue to grow. A survey of over 300 founders of scaleup firms in the U.K. revealed that attracting talent, securing customers, and attracting financing are the the most pressing issues faced by these fast-growing companies.

Accessing critical talent was the most important issue cited by scaleup founders in the U.K. For example, over 85 percent of the scaleup companies reported that they would grow faster if it were easier to develop their leaders, and 87 percent of scaleups said that they would be able to grow faster if university graduates had the skills needed to meet customer demand. Eighty percent of scaleup founders also reported that they could greatly benefit from accessing more talent from overseas.

Interestingly, according to additional data shared at the public release of the report accessing finance was primarily an issue for smaller, fast-growing firms. Larger fast-growing firms reported much greater access to funding.

The report concludes with a number of recommendations that the U.K. government can take to support the growth of scaleup firms. It focuses on six areas:

– Targeting, supporting, promoting and reporting on scale-up gap closure. This includes targeting, supporting, promoting and reporting on the number of scaleup companies and their performance.

– Accessing talent. As the report notes, “For leaders of scale-ups, the number one problem that prevents them from being able to accept customer orders is access to talent, namely a skilled supply of people who they can hire.”

– Developing scaleup leadership. Developing internal leaders and managers inside their companies was the second most important factor cited by scaleup founders as stopping them from growing their revenues.

– Increasing customer sales at home and abroad. According to the report, “Barriers exist that prevent companies creating new products and services for domestic markets, and selling successful products in other countries.”

– Financing scaleups. Analysis suggests that scaleup companies often turn to the US or Asia to raise financing.

– Accessing infrastructure. Entrepreneurs at scaleup businesses also reported that lack of access to infrastructure makes it more challenging to grow their companies in the U.K.

To read the full report and its analysis, please click here.

Endeavor Insight and the Partnership for New York City Release “The Power of Entrepreneur Networks” Study of Nearly 700 Industry Trailblazers

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Endeavor, with support from The Partnership for New York City and Barclays, released a report titled, “The Power of Entrepreneur Networks: How New York City Became the Role Model for Other Urban Tech Hubs” which identifies how founders who reinvest their success into others have greatly accelerated New York City’s tech growth.

“Endeavor has produced the first comprehensive analysis of the entrepreneurial ecosystem that has built Silicon Alley into a global center of innovation,” stated Kathryn Wylde, President & CEO of the Partnership for New York City.

“As companies become more successful, their founders are more likely to mentor, angel invest and become serial entrepreneurs. Companies that are connected to a top-performing company are twice as likely to become top-performers themselves,” said Fernando Fabre, President of Endeavor. “It’s a worldwide pattern that is an important building block for entrepreneurship.”

Over the past year, Endeavor conducted nearly 700 interviews with NYC tech entrepreneurs, combing through combined data from AngelList, Crunchbase and LinkedIn, with the aim of identifying lessons that leaders in other cities could use to support the growth of their own tech sectors. The study indicates that within the City’s tech sector, between 2003 and 2013: more than 2,200 companies were founded; there were 336 IPOs and acquisitions; $14.2 billion in investments and $18.1 billion in startup exits.

Key takeaways:

– New York City is the best role model for other urban tech hubs. It is the second largest tech hub in the world by most measures and the fastest growing over the last decade.
– Data from over 2,500 companies show that top-performing tech entrepreneurs are more likely than their peers to start new companies, encourage their employees to do the same, mentor, angel invest and inspire other entrepreneurs.
– Data from New York City’s tech sector debunks several common startup myths. For instance, the average NYC tech founder is thirty one years old and is more likely to have studied a non-technical subject in college than a technical one.

Highlights:

– Between 2003 and 2013, the New York City tech sector has grown twice as fast in terms of dollars invested as Silicon Valley’s, with its companies raising more than $3.1 billion in funding in 2013.
– Between 2010 and 2013, the number of New York City tech employees grew by more than 26% annually. Based on 2013 tax rates and a $100,000 average salary, the City could add nearly $160 million annually in new tech employee income tax receipts by 2019 and over $500 million by 2024.
– Tech companies led by local entrepreneurs directly employ 53,000 people, over 1% of New York City’s workforce.
– Venture funding for tech companies in New York City increased by 240% from 2003 to 2013, and more than 85% of the sector’s current companies and 86% of its current jobs were created during this time.

The report has also received media coverage in outlets including The AtlanticAM New York, NY Business Journal, The Huffington Post and Crain’s. Read the full report at www.nyctechmap.com and below.

 

The Power of Scale-Ups: Harvard Business Review and the World Economic Forum Spotlight High-Impact Entrepreneurship

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Scale-up companies, defined by Endeavor Insight as companies more than three years old with a minimum of 20% average annual employment growth, have become a major force in transforming economies around the world. Bringing focus to the power of scale-ups, the Harvard Business Review recently featured an article co-authored by Endeavor President Fernando Fabre and Babson College professor Dan Isenberg emphasizing scale-ups, not start-ups, as the main drivers of economic change. The article takes a specific look at The Global Scale Up Declaration, an effort formed between top entrepreneurship influencers to offer a rallying point for the movement. Sign and share the Declaration at ScaleUpDeclaration.org and join the social conversation with #ScaleUpDeclaration.

In addition, a recent World Economic Forum report titled “The Bold Ones – High-Impact Entrepreneurs Who Transform Industries” takes an in-depth look at the power of high-impact entrepreneurs and their role in innovating industries worldwide. Drawing from surveys of entrepreneurs in EY’s Entrepreneur of the Year program as well as research from Endeavor, the report provides insight on how these entrepreneurs and their scale-up ventures accelerate access to new markets and become leading businesses that create high-value jobs.

In the HBR piece, Isenberg and Fabre emphasize that, despite the buzz around “startups”, the U.S. has experienced a decades long decline in entrepreneurship. Instead, more and more American companies are surviving and growing beyond 16 years. These growing businesses – known as “scale-ups” – represent the kind of long-term entrepreneurship that improves societies, jobs, quality of life, and innovation. Entrepreneurial scale-ups are companies – young or old – which are run and owned by growth-driven leaders, and which at any stage of their lives may launch a new growth trajectory. New startups are easier to count, but they alone don’t have the positive impact on economies that growing a company does. As a result, in advance of November’s Global Entrepreneurship Weekthe Declaration was developed in a coordinated effort to focus more of the entrepreneurship conversation on scale-ups and their positive impacts.

View the full HBR article by clicking here.

The WEF report found that the over 600 companies in the sample (1/10,000th of the total number of U.S. companies) have created over 160,000 jobs in just the last two years (nearly 1/20th of the total U.S. economy). These ventures have outperformed comparable financial indices by a substantial margin and have created significant wealth for owners, employees, and customers. In addition, the report features insights from Endeavor CEO and co-founder Linda Rottenberg, who is recognized as an early pioneer of the high-impact entrepreneurship movement.

Read and download the full report by clicking here.

The Global Scale Up Declaration – Join the #ScaleUpDeclaration Conversation

To accelerate and highlight the scale up conversation, with a group of entrepreneurship influencers, we have developed this Scale Up Declaration, which we offer as a rallying point for what the entrepreneurship discussion should focus on, and what that can accomplish. Sign and share the Declaration today!

World Economic Forum Report on High-Impact Entrepreneurs Highlights Endeavor’s Role and Research

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The World Economic Forum recently released a new report titled “The Bold Ones – High-Impact Entrepreneurs Who Transform Industries” that takes an in-depth look at the power of high-impact entrepreneurs and their role in transforming economies. Drawing from surveys of over 600 entrepreneurs in EY’s Entrepreneur of the Year program as well as research from Endeavor Insight, the report seeks to better understand how successful companies accelerate access to new markets and become scalable businesses that create high-value jobs.

In particular, the report found that the over 600 companies in the sample (1/10,000th of the total number of U.S. companies) have created over 160,000 jobs in just the last two years (nearly 1/20th of the total U.S. economy). These ventures have outperformed comparable financial indices by a substantial margin and have created significant wealth for owners, employees, and customers. In addition, the report features insights from Endeavor CEO and co-founder Linda Rottenberg, who is recognized as an early pioneer of the high-impact entrepreneurship movement.

Read and download the full report by clicking here.

New Endeavor Insight Report Analyzes the Source of Silicon Valley’s Development

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Endeavor Insight, supported by Omidyar Network, has released a new report that analyzes the development of the world’s most well-known entrepreneurship hub. The report, entitled “How Did Silicon Valley Become Silicon Valley,” includes new data that is being shared publicly for the first time. Endeavor has conducted similar research on entrepreneurship ecosystems around the world, including in Argentina, Colombia, Turkey, and Chile.

The story of the Valley’s early years can provide lessons to leaders in cities and regions across the world. It illustrates the impact that successful entrepreneurs can generate in their communities if they foster spinout firms, mentor other founders, and act as early-stage investors. More information on the lessons that other cities can use, and on the region’s growth and impact, can be found in the full report.

To download a PDF version of the report click here and read coverage of its release in TechCrunch here. The report can also be viewed online using ISSUU below.

Endeavor Greece Reports on Youth Job Creation, Focuses on the Need for High-Impact Entrepreneurship

endeavor-greece-logo-454280Endeavor Greece recently released a report, titled Creating Jobs for Youth in Greece, which highlights the need for the country’s entrepreneurs to spur youth job creation. The report focuses on the stagnation of value-adding sectors, the necessity of startups for initiating a new growth era, and the promise shown by a generation of Greek youth who are more globally-minded and connected than ever before. The findings reveal that a change in the perception of entrepreneurship needs to happen, particularly among younger populations, which will only be possible if healthy role models and supportive institutions exist.

The report combines analysis of employment demographics from the Hellenic Statistical Authority and employment data from Manpower Employment Organization (OAED), in addition to two surveys conducted by QED and Endeavor Greece. Over the last six years, Greece suffered an unprecedented 25% reduction in GDP that has resulted in a contracted and languishing economy. The country’s youth population has been disproportionately affected by the crisis, with over 600,000 youths (<35 years old) unemployed. Job destruction in the youth sector corresponds to 55% of the total jobs lost during the crisis. However, only half of youth unemployment can be attributed to a sluggish economy  the other half is due to a hiring advantage felt by the age 35+ population.

Yet, young Greek entrepreneurs remain optimistic about their ability to start businesses of their own, as highlighted by past research from Endeavor Greece. The report makes several recommendations to empower future generations. First, identify and support the existing high-impact firms that are in a position to scale up. Second, lay the groundwork for entrepreneurs to launch new companies that will create high-growth jobs for youth as they scale. Combined, the 3,000 existing companies and 10,000 new high-growth companies could create a million new jobs within the span of seven years.

Watch a summary of Endeavor Greece’s findings below and read the full report by clicking here.

Endeavor Uruguay Spotlights Entrepreneur’s Multiplier Effect, Featured in El País

EndeavorUruguayEndeavor Uruguay recently published a map of Endeavor’s Multiplier Effect in the country, highlighting the local entrepreneurship ecosystem and the contributions of Endeavor Entrepreneurs. Published as part of Uruguay’s 2013 Impact Report, the map focuses on the impact of Endeavor Entrepreneur Gabriel Colla, founder of IT services firm Infocorpand the employees, investments, and ventures he has inspired throughout Uruguay. Endeavor has also mapped the Multiplier Effect in affiliate countries including Argentina, Colombia, Turkey, and Chile.

Top Uruguayan newspaper El Pais interviewed Gabriel as a result of the map, spotlighting his work as an Endeavor Entrepreneur and mentor. His Multiplier Effect  the companies, entrepreneurs, partners and employees he and Infocorp have influenced over the years  reaches over 30 of the region’s top tech and startup ventures, with many outside of the Endeavor network. In the article, Gabriel discusses the mutually beneficial relationships between mentors and entrepreneurs that encourage collaboration, knowledge-sharing and community building in ecosystems that need it the most. Read the full article in Spanish by clicking here.

Since his selection as an Endeavor Entrepreneur in 2002, Gabriel has become an Endeavor success story, leveraging the mentorship and advisory services provided to him to grow Infocorp from a small software training company into a global technology solutions firm with clients in over a dozen countries. As an active Endeavor mentor, Gabriel now provides guidance and recommendations to potential entrepreneurs in the pipeline.

View Gabriel’s Multiplier Effect in the 2013 Endeavor Uruguay Impact Report below, or by clicking here.

Endeavor Insight’s “The 13-32 Report” Examines Scaleup Companies in Peru

LimaPeruEndeavor Insight‘s “The 13-32 Report“, released with support from Omidyar Network, spotlights the contributions of scaleup companies towards job creation and economic growth in the country of Peru. This is the third in a series of reports from Endeavor Insight that focuses on scaleup ecosystems worldwide and their significance in transforming emerging markets. The first two reports in the series focused on economies in Indonesia and Colombia.

Scaleup companies, defined as companies more than three years old with a minimum of 20% average annual employment growth, are becoming a critical component of economic and social development in Peru. The report found that these businesses represent just 13% of the country’s total number of firms but created 32% of net new jobs in the past three years. For a nation like Peru in particular, where the workforce is projected to grow by more than 2.5 million people by 2020, the demand for new jobs has never been higher. A reported 400,000 young people in Peru are currently unemployed, making up two-thirds of the national rate.

With the demand for new jobs continuing to climb, scaleup companies are critical to creating an environment for continued growth, addressing the challenge of unemployment by driving innovation, strengthening value chains, and paving the way for long-term expansion. As the largest job creators in the country, scaleups need access to the sort of services Endeavor works to provide, promoting the right mix of talent, funding and networks to accelerate high-impact entrepreneurship that can transform the region.

Endeavor officially launched its Endeavor Peru affiliate in 2014. To read the full report and learn more about the research, click here.

 

Global Board Member Fadi Ghandour Discusses Barriers to Scale for MENA Entrepreneurs

dubaiThis post comes from Fadi Ghandour, who is the founder of Aramex, a board member of Endeavor, and the Chairman of Wamda, an organization that works to empower entrepreneurs in the MENA region. View the original post on the Entrepreneurship Ecosystem Insights page.

“Two-thirds of the Arab World ‘s population is below the age of 29. The region is not only growing younger, but also becoming more literate. With rising levels of education, connectivity, and mobility, the biggest challenge remains: How do we create good jobs for the restless millions?

Entrepreneurs are drivers of growth, innovation, and competitiveness. A recent World Bank report on small and medium sized companies (SMEs) shows that the highest contributors to employment are firms with less than 100 employees. And, not surprisingly, it is scalable businesses that generate the biggest share of economic opportunities. A study conducted by the World Economic Forum in collaboration with Stanford University and Endeavor in 2011 reveals that the top 5% of the 380,000 companies surveyed across 10 European and Asian countries have generated 72% of total revenue and 67% of the total employment recorded by these companies.

And yet, although scalability is critical for job creation, company founders still encounter many barriers when starting and growing their businesses. For startups to thrive, the different ecosystem players must understand the nature and source of these obstacles and work hard to eliminate them. But without comprehensive, up-to-date data they will not be able to craft viable, practical solutions.

Wamda’s newest initiative, the Wamda Research Lab (WRL), is focused on publishing research and insights on regional entrepreneurial activity to inform policy makers, investors, and other stakeholders on the critical challenges and gaps in this space. In its first report, The Next Step: Breaking barriers to scale for MENA entrepreneurs, WRL identifies the hurdles company founders face in generating revenues, raising capital, attracting talent, building teams, and facilitating expansion. Our study reveals that 63% of entrepreneurs and 60% of experts consider finding talent to build teams as a major challenge. Access to new markets is yet another central issue: 47% of entrepreneurs and 50% of experts cited difficulty in finding partners to facilitate expansion as an impediment to scale. Moreover, 41% of entrepreneurs said that the biggest restraint to generating revenues is marketing products and services.

The fact remains that the region’s outdated education systems, which continue to graduate generations of unemployable youth with no competitive 21st century skills, and its fragmented markets that allow little mobility of people and companies, are stifling the growth of entrepreneurs, and innovators. Unemployment needs to be considered in every policy, national strategy, private-sector initiative, and social activity. It is time we collectively deploy our knowledge, resources, capital, and networks to enable entrepreneurship as a development tool. I encourage all stakeholders – governments, investors, entrepreneurship institutions, universities, civil society, large corporations, and entrepreneurs – to read this report and take its conclusions seriously, in the hope that they will trigger effective action and positive change.

Finally, I would like to thank Endeavor Insight for their guidance, support, and expertise throughout the entirety of this project.”

Endeavor Research Featured in Top Outlets Including The Atlantic, Inc. Magazine and The New York Times

IncNYTAtlanticRecent research released by the Endeavor network was featured in top news publications including The Atlantic, Inc. Magazine and The New York Times, highlighting a growing public interest in global entrepreneurship and the efforts of high-impact entrepreneurs.

Inc. Magazine, The Atlantic and The Atlantic Cities profiled Endeavor Insight’s findings on what entrepreneurs look for in a city and the qualities that prove most attractive to founders. Read a recap of the articles by clicking here.

In addition, research from Endeavor Greece on the country’s entrepreneurship and investment opportunities was mentioned in a piece in The New York Times and spotlighted in a BloombergTV interview with Endeavor Greece Managing Director Haris Makryniotis. Read about the research and view the interview by clicking here.

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