Tuesday, October 25, 2005

Focus on Winners (or, Managing Expectations)

That's the gist of the following press release we received here this morning (our first!). It was personally e-mailed to us by the PR guy at Babson College - which suggests an interesting blurring between blogs and mainstream media.

But it's right up our alley here at Canadian Entrepreneur, because it's all about growth companies. So here's my version, edited and annotated.

FIRST GLOBAL STUDY OF HIGH EXPECTATION ENTREPRENEURSHIP (note: you know their story is weak when there's no verb in the headline!)

Wellesley, MA -- The first global study of high-expectation entrepreneurship has found that just 9.8% of the world’s entrepreneurs expect to create almost 75% of the jobs generated by new business ventures.

(What's high-expectation entrepreneurship? It's defined as all start-ups and newly formed businesses which expect to employ at least 20 employees within five years.)

A research consortium co-directed by Babson College and London Business School analyzed 505,000 survey responses across 44 countries over a five-year period to study high-expectation entrepreneurship.

These ventures have far-reaching impacts, because of their contribution to job creation and innovation. The report’s key findings include:

* More high-expectation entrepreneurial activity occurs in North America (U.S. and Canada) and Oceania (Australia and New Zealand) than in other country groups. For these groups, high expectation entrepreneurial activity ranges from 0.1% to 1.6% of the adult population;

* High-expectation activity is highest in the U.S. (1.6% of adult population), roughly twice the rate in the UK and Germany;

* High-expectation ventures are most prevalent among well-educated men aged 25-34, with high incomes;

* Worldwide, 9.8% of entrepreneurs expect to create 74.1% of all jobs born out of new business ventures;

* Governments should encourage high-expectation entrepreneurial activity through selective support measures, such as removing disincentives for entrepreneurial growth, and facilitating spin-offs from knowledge-intensive organizations (in high-income countries), and improving elementary and secondary education (in lower-income countries).

Lead researcher Erkko Autio concludes: “This study shows that it is only a small fraction of all new firms that really matter for job creation. Therefore, selective policy measures by governments targeted at high-potential ventures are likely to prove more effective for job-creation purposes."

[Note from me: Ontario, thank goodness, has been targeting its growth-business assistance for years (see here and here and here). The feds, not so much.]

For a copy of the report, click here.

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