Entrepreneurship organizations that don’t target specific populations see faster growth among their entrepreneurs
Endeavor Insight releases a new report, “Creating Capacity: Comparison of Organizations Supporting Entrepreneurship Across the World”.
Entrepreneur-support organizations come in many different forms. Some have made a commitment to entrepreneurship in general, while others focus on specific groups of entrepreneurs, such as women or bottom-of-the-pyramid businesses. Endeavor Insight’s most recent study suggests, however, that avoiding a target population may help organizations support entrepreneurs with the greatest potential for high-growth.
While more than 70 percent of “generalist” organizations (i.e. those without a target population focus) reported that the majority of their portfolio companies were high growth (over 20 percent annual revenue or employment growth), organizations that supported target populations or social entrepreneurs were less than half as likely to have comparable levels of high-growth companies in their portfolio. Even as entrepreneur-support organizations bring specialized knowledge to bear on social enterprises, their generalist peers outpace them in growing companies.
As entrepreneur-support organizations consider how best to drive entrepreneurship and economic growth, they will need to decide whether to support the best businesses or specific groups of entrepreneurs. The latter can benefit targeted groups, but the former may provide broader economic impact and job creation, the effects of which touch peoples’ lives across a country’s socio-economic spectrum. High-growth companies create quality jobs, and these jobs help reduce inequality, increase social inclusion, and expand country-wide access to social and health services. Whether the next game-changing company is a new sandwich franchise business or a men’s shoe manufacturer, generalists seem to be most likely to nurture the next high-impact company wherever it springs up.
For more information, please read the full report here.