CLICK HERE to read the full Endeavor Insight report, “Poverty Reduction Through Job Creation & GDP Growth: Understanding the Potential of High-Impact Entrepreneurship.”
Every day, more than 3.1 billion people survive on less than $2.50. What seems impossible to imagine is in practice a numbers game: for instance, taking a gamble on whether it is more costly in the long term to continue working with a broken leg or to risk losing eight months of productivity and two-thirds of the household’s annual income when ignoring that leg causes complications and requires an operation. If there is only enough money to send one of eight children to school, parents have to guess which one is the smartest.
This is a population that needs jobs – a lot of jobs – which makes High-Impact Entrepreneurship an essential policy catalyst for emerging markets. Stable jobs remove an element of fear from the daily life of the world’s most impoverished, offering the security of a steady salary, the ability to accumulate assets over time, and a greater capacity to mitigate the impacts of unexpected life events. Numerous studies highlight the ability of high-impact entrepreneurship to create high-quality jobs compared with other policy approaches, such as microfinance or interventions at the macroeconomic level.
High-Impact Entrepreneurship is remarkably efficient way to create high-quality jobs. A five-year study by the Global Entrepreneurship Monitor showed that while high-growth entrepreneurs represented only 4% of all entrepreneurs in the dataset, they generated an astonishing 38% of all entrepreneur-created jobs. Unsurprisingly, metrics for comparative job creation suggest that, on average, supporting the expansion of a high-growth small or medium enterprise creates up to 100 times the number of new jobs as a microenterprise.
And the jobs themselves fight poverty. Surveys also demonstrate that these jobs pay about twice as much as comparable positions, offer healthcare benefits 91% of the time, and enable over a third of employees to provide better educational opportunities for their children.
High-Impact Entrepreneurship works to close the gap between microcredit programs and macro-level government finance projects to efficiently generate high-quality employment. While it is not the only solution needed to eradicate poverty, it is an important part of the full solution.
To learn more on this topic please read the full report linking High-Impact Entrepreneurship to poverty reduction here.