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Endeavor Brazil’s Entrepreneurial City Index Ranks Quality of Entrepreneurship Across the Country

endeavorbrasilEndeavor Brazil, with support from Bain & Company, published an Entrepreneurial City Index of Brazilian capitals in an attempt to understand the country’s entrepreneurial ecosystem, as well as draft local policies to encourage high-impact entrepreneurship.  The results will serve as an assessment tool for public managers and support organizations interested in economic impact in the cities, and for entrepreneurs to make more informed decisions when choosing where to start their businesses.

The creation of a positive environment for entrepreneurial activity is a concern for countries with a range of economic development; entrepreneurs play a significant role in such productivity and are agents of generating wealth. Policies aimed at generating entrepreneurship, thus, are important to a country’s economic well being.

Starting a new business in Brazil requires a huge amount of effort. Entrepreneurs face daunting obstacles daily, be it finding new customers, managing budgets, or simply building a qualified team. Endeavor developed a unique framework for assessing the business environment in Brazil’s regions. To build this framework a set of economic, institutional and social indicators from all 14 cities were organized and collected.

The study’s framework focuses on seven determinants that form the ranking themes. These include: Regulatory Environment, Infrastructure, Market Conditions, Access to Capital, Innovation, Human Capital, and Culture.

Regulatory environment deals with permits, inspections, and labor laws, particularly on the length of proceedings and the cost of taxes measured by the effective taxation of small and medium ventures.
Infrastructure focuses on two main groups: long distance transportation and urban conditions. Sao Paolo took first place in Market Conditions, the next determinant.
Market Conditions concern economic development and potential clients.
Access to Capital is another very important determinant for an entrepreneurial city. The two main categories for determining access to capital are available capital via debt and access to venture capital. For a new company, it is often difficult to think about investing in the future when the present is uncertain, so access to investors and venture capitalists can make or break a start-up.
Innovation focuses on investment intensity and generating innovation potential.
Human Capital  deals with the availability of skilled and basic labor.
Culture plays a large role in the success of entrepreneurial ventures in Brazil. A society’s vision of and attitude towards entrepreneurship is a noteworthy factor in whether or not entrepreneurs will be successful in a determined city.

After a thorough analysis of the results, Florianópolis, an island region in the South East of the country, came in first place. Thirty years ago the city could not have imagined its current success, but hard work and the alignment between economy, government and society, made this island a hub for entrepreneurial growth. This data will allow regional governments to better understand their position in the entrepreneurial spectrum, and allow them to grow and develop into their own successful entrepreneurial sites.

Read the report below and download it by clicking here.

Endeavor Mexico Maps the Multiplier Effect of Mexico City’s Tech Sector

endeavormexicoEndeavor Mexico released a report on the “Multiplier Effect” of tech entrepreneurs in Mexico City, mapping the connections between entrepreneurs and influencers who are shaping and influencing the local ecosystem. A key component of  Endeavor’s model, this multiplier effect demonstrates the power of entrepreneurs to mentor, invest and inspire future generations.

The map of Mexico City focuses on a few key connections –  the ability of successful entrepreneurs to multiply their impact through the pillars of inspiration, investment and mentorship. The study consists of six parts: an introduction, analysis of results, findings, case studies, in-depth interviews and conclusions.

The map found that in the early 1990s, there were isolated entrepreneurial efforts in the field of IT, some of which would scale up and become big players in the sector. Many of these early entrepreneurs, partners and founders would go on to launch second and third ventures. Beginning in 2003, Mexico City begins to form a robust ecosystem through the impact of entrepreneurs who were beginning to mentor and invest in other startups in their network. By 2014, the ecosystem reaches a peak. However, only 14% of these connections were investment-based, demonstrating a key challenge that still needs to be addressed in the ecosystem.

Learn more about the findings and read the full study in Spanish by clicking hereor download a PDF version here.

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Endeavor Insight Releases Southeast Michigan Scaleup Assessment

endeavor_insightWith the launch of its affiliate in Detroit, Endeavor has doubled down on scaleup entrepreneurs throughout the U.S. As part of this commitment, Endeavor Insight is launching the second in a two-part series of reports focused on the region’s scaleup entrepreneurship ecosystem.
 
The first report, released in February, identified a region-wide scaleup gap. Between 2007 and 2012, the number of Southeast Michigan scaleups, those firms growing at 20% or more per year, has decline by more than 50%. The correlation between this growing gap and the region’s elevated unemployment rate is more than a coincidence. Instead, these companies are important engines of Southeast Michigan’s economic growth, creating 94 jobs on average between 2009 and 2012. In comparison, startups created just two jobs per company, on average, in that time period.
 
As part of the second report, Endeavor Insight has explored some of the drivers and barriers to the success of Southeast Michigan’s scaleup firms. To better understand the opportunities for a scaleup-led renaissance, we spoke with over 50 Southeast Michigan scaleup entrepreneurs. What they told us about the strengths and weaknesses of the region was quite surprising.
 
Four out of five of the Southeast Michigan entrepreneurs we spoke with noted that the region has excellent quality of life and a wealth of potential customers. Over two-thirds have been able to grow their businesses because of great access to talent, both technical (from the region’s world-class universities) and managerial (from its Fortune 500 companies).
 
On the flip side, several challenges constrain these regional scaleup firms. Over half of Southeast Michigan entrepreneurs lack adequate access to finance. A majority of these entrepreneurs are also missing great mentors who can help take their businesses to the next level. Most of these companies, despite being successful, haven’t generated many employee spinouts–companies started by former employees of a scaleup entrepreneur.
 
As part of its launch, Endeavor Detroit is working to fill many of these gaps, and is encouraging local leaders to focus on the potential that scaleup companies have for generating lasting growth throughout Southeast Michigan. Read and download the report by clicking here.

 

 

Endeavor Insight Report on Kenya’s “Critical 5 Percent” Highlights the Importance of Scaleup Firms

endeavor_insightEndeavor Insight’s “The Critical 5 Percent” report, released with support from SAP, examines the contributions of scaleup companies towards job creation and economic growth in Kenya. The report is part of a series conducted by Endeavor Insight that focuses on scaleup ecosystems worldwide and their significance in transforming emerging  and growth markets.

Scaleup companies, defined as companies more than three years old with a minimum of 20% average annual growth, are becoming a critical component of economic and social development in Kenya. The report found that Kenya needs to create more than 3.9 million new jobs for young people by 2020. Over 1.5 million people are currently unemployed in Kenya, and over a third of them are young people between the ages of 15 and 24. Kenya’s workforce is projected to grow by 3.4 million people by 2020, due primarily to new young adults entering the job market. High-growth entrepreneurs have the potential to be major job engines in the country. According to the findings, scaleup entrepreneurs represent only five percent of Kenyan firms, but created over 70 percent of the total new jobs.

With the demand for new jobs continuing to climb, high-impact 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 emerging economies like Kenya, 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.

“Despite recent political challenges, Kenya continues to experience strong growth, due to its broad-based economy, strategic location and above all, its youthful population. But without creating more jobs for its young people, Kenya will have challenges living up to its potential,” commented Pfungwa Serima, CEO SAP Africa. “Small businesses can significantly help to reduce youth unemployment in this important market. As this announcement underscores, SAP is committed to finding innovative ways to solve critical social and business issues in Africa and provide today’s young people – and tomorrow’s leaders — with access to the tools they need to succeed in the digital and networked economy.”

Read the full report below and learn more about SAP’s efforts to drive innovation in the region by clicking here. The report also received coverage in national Kenyan newspaper The Standard.

Endeavor Insight Spotlights Scaleup Ecosystems in Bangladesh and Uganda

endeavor_insightAs part of a series of reports focused on scaleup ecosystems worldwide, Endeavor Insight has analyzed the impact of scaleup companies on the economies of two emerging markets: Bangladesh and Uganda. Entitled “The Critical 5 Percent” (Bangladesh) and “The Critical 6 Percent” (Uganda), the reports highlight job creation and economic growth driven by high-impact entrepreneurs in each country. Earlier reports in the series studied the economies in Colombia, Indonesia, Jordan, Mexico and Peru.

Scaleup companies, defined as companies more than three years old with a minimum of 20% average annual employment growth, are a critical component of economic and social development in many global economies, including Bangladesh and Uganda. The report found that these businesses represent just 5% and 6% of these countries’ total number of firms, but created 70% and 50% of net new jobs in each country, respectively. For economies like these in particular, where the labor forces are projected to grow in the millions by 2020, the demand for new jobs has never been higher. Both nations will need to create millions of new jobs in order to keep up with population growth within the next decade.

With the demand for employment opportunities 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 these countries, scaleups need access to the types 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.

To read the full reports and learn more about the research, click below.

Endeavor Insight Releases “The Criticial 9 Percent” Report on Jordan’s Growing Scaleup Ecosystem

endeavor_insightEndeavor Insight‘s “The Critical 9 Percent” reportreleased with support from Omidyar Network, highlights the contributions of scaleup companies towards job creation and economic growth in the country of Jordan. This is part of a series of reports from Endeavor Insight that focus on scaleup ecosystems worldwide and their significance in transforming emerging market economies. Earlier reports in the series studied the economies in ColombiaIndonesiaMexico and  Peru.

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 Jordan. Utilizing World Bank data, the report found that these businesses represent just 9% of the country’s total number of firms but created 53% of net new jobs in the past three years. For a nation like Jordan in particular, where the workforce is projected to grow by more than 330,000 people by 2020, the demand for new jobs has never been higher. A reported 200,000 people in Jordan are currently unemployed, a rate that is especially high among 15 to 24 year olds.

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 Middle East.

Endeavor launched its Endeavor Jordan affiliate in 2009. To read the full report and learn more about the research, click here.

Endeavor Launches Second U.S. Affiliate in Detroit, MI

medium_9178018018Endeavor Detroit Logo (color) web small Detroit, MI – February 9, 2015 – Endeavor is officially announcing the launch of its second U.S.-based affiliate in Detroit, MI. Endeavor Detroit has identified some of the region’s top business leaders and entrepreneurs to join its local board of directors. Antonio Lück has also been selected as Managing Director. As Endeavor’s second entry in the U.S. market following its 2013 launch in Miami, Endeavor Detroit will help usher in a new era of local growth and economic development driven by high-impact entrepreneurship.

The economic challenges faced by Detroit since the financial crisis of 2007-08 have made headlines across the world. With a population of about 700,000, the city has seen a sharp rise in unemployment coupled with economic decline and a dwindling talent pool. Following its landmark municipal bankruptcy filing in 2013, the city has been beleaguered by unemployment rates hovering around 14% – nearly double the national average. The region of Southeast Michigan as a whole has not fully recovered from the financial crisis either, with unemployment rates at nearly 1% above 2007 levels.

Endeavor Insight, the organization’s research team, found that Southeast Michigan suffers from a scaleup gap, with the number of high-growth firms (companies older than three years with at least 20% annual employment growth over the last three years) declining by 50% between 2007 and 2012. Scaleups, however, can be the key engines of sustainable job growth that the city needs. The average high-growth company employs 25 times as many people as the average lower-growth firm, and 76 times as many as the average startup. To return the area’s unemployment rate to 2007 levels, Southeast Michigan will need to fill the job gap by empowering entrepreneurs and ventures that have the potential to create the most high-quality employment opportunities. Learn more about Endeavor Insight’s findings on Detroit’s scaleup ecosystem by clicking here.

Now at a critical crossroads, Detroit is primed for the sort of high-impact entrepreneurship that Endeavor has successfully fostered all around the world. By providing access to a global network of industry leaders, investors and talent, Endeavor’s support can help the best entrepreneurs in the city turn their ventures into businesses that will move the local economy. Endeavor works to take the magic of networks like Silicon Valley and bring it to regions with great ideas and potential, but not necessarily the resources to help founders expand their visions. Once selected into the network, Endeavor Entrepreneurs are connected with strategic mentors and given access to an array of tools that can catapult them to success. Since its founding in 1997, Endeavor has selected and supported over a thousand entrepreneurs representing more than 650 companies in the 22 markets where it operates.

“Detroit right now is in an exciting period of reinvention and growth, driven by a rise in entrepreneurship,” said Board Chairman Cindy Pasky, Founder & CEO of Strategic Staffing Solutions. “Endeavor’s unparalleled global network will equip the city’s best entrepreneurs with the resources they need to aid with ushering in a new era for Detroit.”

“The entrepreneurial talent in Detroit and the broader region is impressive,” echoed Endeavor Co-founder and CEO Linda Rottenberg. “We’re excited to support these companies to scale, stay and multiply their impact by investing, mentoring and inspiring the next generation of local high-impact entrepreneurs.”

All Endeavor affiliates are guided by a local board of business leaders, each of whom believes that high-impact entrepreneurship can transform entire economies. The Endeavor Detroit founding board will be chaired by Cindy Pasky, Founder, President, & CEO of Strategic Staffing Solutions. She will be joined by Gerard M. Anderson, Chairman & CEO of DTE Energy; Dave Egner, Executive Director of the New Economy Initiative and President & CEO of the Hudson-Webber Foundation; Thomas Groos, Partner of City Light Capital; Nate Lowery, Co-founder & CEO of TM3 Systems; Raj Vattikuti, Founder of Altimetrik; and Steven A. White, Chairman & CEO of Detroit Renewable Energy. The launch of Endeavor Detroit was made possible by the commitment and passion of these local board members as well as the support of some of the region’s top institutions and foundations.

“The DeVos Family first met Endeavor a couple years ago and was impressed by a proven track record to catalyze entrepreneurial ecosystems around the world,” expressed Nate Lowery, Co-founder and CEO of TM3 Systems Inc, and Board Member of the Dick and Betsy DeVos Family Foundation and Endeavor Detroit. “While the family has traditionally focused much of its philanthropy in Grand Rapids, taking Michigan’s entrepreneurial ecosystem to the next level will require cooperation from both sides of the state. Our Foundation is thrilled to be a driving force behind Endeavor coming to Detroit and Michigan.”

“From grassroots to high-growth, the New Economy Initiative supports programs that enable entrepreneurs to start, innovate and scale their businesses in SE Michigan,” said David Egner, President of the New Economy Initiative and Board Member of Endeavor Detroit. “The team identified a gap that Endeavor’s model could fill to support entrepreneurs to scale.”

The board has selected Antonio Lück as Managing Director of the office, overseeing the successful launch of Endeavor Detroit. Mr. Lück was previously the Director of Business Acceleration, Entrepreneurship, Innovation and Venture Capital at the Michigan Economic Development Corporation, where he directed all of the state’s early stage financial programs and the portfolio management team. He will lead the day-to-day operations of the office in Detroit and will be involved in screening entrepreneur candidates for consideration.

For entrepreneurs interested in learning more about Endeavor in Detroit, please contact Detroit@endeavor.org.

About Endeavor

Hailed by New York Times columnist Thomas Friedman as “the best anti-poverty program of all,” Endeavor is leading the global movement to catalyze long-term economic growth by selecting, mentoring, and accelerating the best high-impact entrepreneurs around the world. To date, Endeavor has screened more than 40,000 entrepreneurs and selected more than a thousand individuals leading over 650 high-impact companies.

With support from Endeavor’s worldwide mentor network, these high-impact entrepreneurs:

– Have created nearly 400,000 jobs
– Generated $6.8 billion in revenues in 2013
– Inspire future generations to innovate and take risks

Headquartered in New York City, Endeavor currently operates in 22 countries throughout Europe, Latin America, Africa, Southeast Asia, the Middle East and the U.S.

Contact
Joanna Harries
Vice President, U.S. and Canada
Ph: +1-646-783-6122
joanna.harries@endeavor.org

Endeavor Insight Uncovers Scaleup Gap in Southeast Michigan

endeavor_insightCoinciding with the launch of Endeavor’s Detroit affiliate, Endeavor Insight has released a report focused on the important role scaleup firms play in growing Southeast Michigan’s economy. The report, Filling the Scaleup Gap: How high-growth companies solve unemployment in Southeast Michigan is the first of two Insight studies identifying the decline of fast-growing firms and assessing policies and programs to solve it. The report highlights several important trends affecting Southeast Michigan:

1. Southeast Michigan hasn’t recovered from the financial crisis: Southeast Michigan unemployment is nearly 1% above 2007 levels and lags unemployment rates in peer metropolitan areas (Cleveland, Pittsburgh, etc.) by nearly 2%.

2. Southeast Michigan suffers from a scaleup gap: The number of Southeast Michigan high-growth companies (companies older than three years with at least 20% annual employment growth over the last three years and at least 10 employees) has declined by 50% between 2007 and 2012. Despite adding 7,000 startups and 49,000 lower-growth companies–a 27% increase in the number of companies since 2007–the region continues to suffer from high unemployment.

3. Southeast Michigan scaleups are the engines of sustainable job-growth: The average high-growth company employs 25 times as many people as the average lower-growth firm, and 76 times as many as the average startup. High-growth firms created 94 jobs, on average, between 2007 and 2012, while startups created just two Lower-growth firms barely registered. On average, they did not create a single full-time job. Scaleups are also more durable than other types of companies. Firms with at least one high-growth period between 1990 and 2012 survived twice as long as those that never experienced high growth.

Endeavor Detroit will help close this gap by searching out, selecting, and supporting scaleup companies throughout Southeast Michigan. It will close the scaleup gap, creating new high-quality jobs for a region that helped create some of the most enduring companies of the 20th century.

Read the report below or download it by clicking here.

World Economic Forum Report on Entrepreneurial Ambition Features Insights from Endeavor Entrepreneurs

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A report produced by the World Economic Forum, the Global Entrepreneurship Monitor and Endeavor examines the concept of entrepreneurship in three dimensions: early-stage entrepreneurial activity, growth-oriented entrepreneurship and innovation-based entrepreneurship. The study aims to develop a useful framework for policymakers to understand and support the best entrepreneurs in every region. Case studies and interviews with Endeavor Entrepreneurs from Saudi Arabia to Brazil serves to support the assessment.

It is widely believed that entrepreneurial activity is a critical component to a prosperous society, considering how entrepreneurs create jobs, drive progress and contribute to economic growth. Consequently, many governments and their policymakers aim to increase the number of entrepreneurs in their countries and aid their development. But providing this support is no easy task, as entrepreneurs are not necessarily the same even within a country and often appear in different guises depending on the country in which they are located.

By drawing on two unique data sets – the Forum’s Global Competitiveness Index and Global Entrepreneurship Monitor’s assessment of entrepreneurial activity – the report takes a nuanced stance on the prevalence and types of entrepreneurs globally, and the environments in which they thrive. This look at entrepreneurship aims to provide a deeper understanding of early stage entrepreneurial activity by taking into account that not all entrepreneurs are the same. Specifically, the report highlights early-stage entrepreneurs that are innovative and ambitious about their growth expectations, arguably those with the highest impact on economies.

The report ultimately finds that, in general, early-stage entrepreneurial activity is higher in economies that are less competitive and lower in highly competitive economies. Conversely, the proportion of ambitious and innovative entrepreneurs is more frequently high in more competitive economies. In many highly competitive economies with low rates of business starts, entrepreneurial drive manifests itself through more formalized structures, which dispels any quick conclusions about the quality of entrepreneurial ecosystems based on entrepreneurship rates alone.

Endeavor Entrepreneurs that provided their insights for the report include Rafael Bottós of Welle Tecnologia Laser (Brazil), Maha Arayssi Rifai of Beesline (Lebanon), Daphne Loukas of Out There Media (Greece), Caio Bonatto of TecVerde (Brazil) and Lateefa Alwaalan of Yatooq (Saudi Arabia).

Read the full report and learn more about the findings by clicking here.

Harvard Business Review Features Endeavor Research on Tech Founders

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The Harvard Business Review (HBR) featured research from Endeavor Insight that dispels some popular myths about tech entrepreneurs. Tech founders are often associated with prominent colleges, technical training and youth. Data from Endeavor, however, reveals that these beliefs are often the exceptions, not the rule.

Two of the most successful tech entrepreneurs in history – Bill Gates and Mark Zuckerberg – promote the stereotypes around tech founders. Both were college dropouts who studied computer science by day, programmed by night, and built large public companies without ever having worked at one. Anecdotes from popular media have only added to the cult of youth. Last year, articles in The New Republic and The New York Times explored the role that young entrepreneurs have played in shaping Silicon Valley.

Over the last year, Endeavor Insight began studying the New York City tech sector, one of the largest in the world, to understand just how closely these myths align with reality. Starting with publicly available data from Crunchbase, AngelList, and LinkedIn – and layered on top of interviews with nearly 700 local tech founders – the data found that none of these stereotypes hold up.

Read the full HBR piece to find out more about Endeavor’s findings by clicking here. Also find mention of Endeavor’s research in the Financial Times.

The Myth of the Tech Whiz Who Quits College to Start a Company

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