Scaling from Small to Large: Endeavor Insight’s Research Reveals How Entrepreneurs are Integral to Solving the Job Crisis

NEW YORK, September 25, 2012 – Entrepreneurship is increasingly viewed as a key solution to chronic unemployment, but when it comes to job creation, not all entrepreneurs are equal. According to a new report and interactive online tool released by Endeavor Insight, high-growth small and medium size enterprises that scale into large businesses have significant potential to drive sustained job creation and employment, especially in emerging markets. Endeavor Insight partnered with Omidyar Network and Aspen Network of Development Entrepreneurs (ANDE) to commission and release the report.

According to the UN, the world needs more than 500 million new jobs by 2020 to provide job opportunities for the currently unemployed and those who will join the workforce over the next eight years. Close to 90% of these jobs must be created outside the United States and European Union. In developing economies from Latin America to Africa and the Middle East, unemployment rates are particularly high and the number of young people entering the workforce continues to climb steadily. In these regions, SMEs tend to be widely prevalent, but large enterprises are less common. Endeavor’s new research reveals that high-growth entrepreneurs who are able to grow their companies to become large enterprises can create 100 times more jobs than micro-enterprises and 10 times more jobs than traditional SMEs. In fact, on average, they create more than 200 jobs as their companies grow. Enabling small and medium size enterprises to scale and become large companies is one of the most important mechanisms for policy makers and business leaders to solve the job creation crisis.

In conjunction with the report, “ Why Becoming Large Matters: How Scalable, High-Growth Entrepreneurs Can Help Solve the Jobs Crisis.” pdf

Endeavor Insight has developed a Jobs Creation Calculator, a multilingual interactive tool that allows users to analyze the job creation needs of more than 50 countries.

The report includes case studies of more than 20 successful entrepreneurs and job creators within the Endeavor, Omidyar Network, Acumen Fund, Ignia, SEAF and New Ventures portfolios. All of these organizations have been critical in supporting and investing in entrepreneurs across a variety of industries and geographies. Typical of the high-growth companies featured is Globant, an Argentine IT outsourcing firm that has had an annual jobs growth rate of 40% and employs 2,800 people. By supporting and investing in entrepreneurs that have the ability to scale, policy makers and business leaders can positively affect the jobs crisis.

”High Impact entrepreneurs have the biggest ideas and grow their businesses faster, creating jobs and value as they scale,” said Endeavor co-founder and CEO Linda Rottenberg. “Our Insight research shows that these entrepreneurs are more likely to create high value jobs, paying better than average wages, providing more benefits and generating high job satisfaction for their employees.”

“High-impact entrepreneurs are at the heart of Omidyar Network’s approach to impact investing. In our eight years of experience in this area, we have seen first-hand how investments in high-growth entrepreneurs create substantially more jobs, economic growth and positive social impact,” said Matt Bannick, Omidyar Network Managing Partner. “We are encouraged by the findings of Endeavor’s report and will continue to build upon our experience investing in high-growth entrepreneurs.”

“The best and only sustainable way to fight poverty in emerging markets is to create jobs,” said Randall Kempner, Executive Director of the Aspen Network of Development Entrepreneurs. “Supporting entrepreneurial firms isn’t the only way to generate jobs, but it is a productive strategy that has been underleveraged by development institutions, national governments, and economic development agencies. This report and tool highlight the positive impact of entrepreneurial firms and the need for greater resources from the private and public sectors to flow into this space. ”