The FINANCIAL — Entrepreneurs can help drive the creation of 10 million youth jobs across the G20 countries if existing barriers to entrepreneurship were lifted, according to new research from Accenture.
The study also indicates that while 74 percent of entrepreneurs surveyed by Accenture say they plan to recruit young talent in 2014, many believe that a shortage of people with relevant skills is hindering job creation and growth.
The Accenture study, “The promise of digital entrepreneurs: creating 10 million youth jobs in the G20 countries,” analyzes the views of more than 1,000 entrepreneurs and highlights the barriers that are limiting the potential of entrepreneurs to create jobs and grow the economy. The report illustrates that while 85 percent believe they have a critical role to play in the creation of jobs for young people, they face a number of challenges including securing funding, scaling and sustaining innovation, growing internationally and accessing the right skills.
The report indicates that many entrepreneurs believe more could be done to foster an environment of youth job creation in their country. Only one quarter (26 percent) consider the actions taken by their government to support youth job creation as relevant and efficient. Additionally, more than half (54 percent) cite a lack of incentives as a barrier to taking on more young people, according to Accenture.
“While there is no simple solution to the challenge of youth unemployment, this study provides evidence to suggest that entrepreneurs can play a vital role in reinvigorating youth job creation,” said Bruno Berthon, managing director, Cross-Industry Strategy Lead, Accenture Strategy.
“Policymakers are not blind to the importance of entrepreneurs. However, digital technologies are enabling and accelerating entrepreneurship, and in many cases, the legislative and regulatory environment is struggling to keep pace. Countries that are able to foster and support entrepreneurs will be better positioned to create jobs, restore growth and enhance the overall quality of life for their citizens,” he added.
Skills shortages create pressure for most entrepreneurs
A shortage of available skills is the primary concern of entrepreneurs, regardless of the size of their firm. More than three-quarters (78 percent) of respondents say they have challenges recruiting the right skills, and 62 percent list skills shortages among their top-three recruiting concerns. The scarcity of talent was felt by entrepreneurs across sectors in manufacturing as well as services and by firms both young and old.
Additionally, many entrepreneurs report difficulty in securing sufficient funding, an issue that is not just limited to newer firms. In fact, 32 percent of entrepreneurs seeking to expand globally ranked access to funding one of their top three concerns, of which the majority of firms (59 percent) facing this problem have been in business for more than three years, according to Accenture.
Innovation and export driven companies more likely to create jobs
New jobs are likely to be created by entrepreneurs whose companies are more innovation and export oriented, according to the report.
Ninety-one percent of the entrepreneurs who run innovation-centric businesses are more confident of creating jobs than those running firms in which innovation is not considered important (61 percent). Open innovation is seen by three-quarters (76 percent) of entrepreneurs as an enabler of innovation in their business, and 86 percent say that they collaborate with customers to co-create offerings.
Nine out of ten (91 percent) of the entrepreneurs who consider open innovation to be a major enabler of innovation are also expecting revenue growth, compared to 54 percent of those who said open innovation was not critical.
Seventy percent of younger firms – those launched in the past 12 months – are already thinking of international expansion, suggesting that they are ‘born global’ entrepreneurs, according to Accenture.
However, globalization does not mean that jobs will be created only in overseas markets; in fact, 86 percent of respondents expect to increase the workforce in their home country at a faster pace than the workforce outside their home country. The study also shows that global expansion can create a number of challenges for entrepreneurs, such as finding the right partner, building local market knowledge, understanding local regulations, finding local skilled resources and containing logistics costs.
“As business leaders seek growth, they are increasingly finding the need to look beyond their shores and beyond their existing products and services,” Berthon said. “This underscores the importance of policies that support risk and enterprise as a route to sustainable economic recovery in many markets that are experiencing sluggish growth today. More countries are adopting entrepreneur-friendly policies, but many of these policies are still largely fragmented, and many of the entrepreneurs we surveyed consider them insufficient. Entrepreneurs are seeking a simplified regulatory environment that encourages open innovation, and offers them a combination of tax incentives and access to better and more flexible financing,” he added.
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