In the preceding years I have been witnessing a growing change among my friends and acquaintances. Some quit their engagement as an employee to found a startup. Others have become more and more dissatisfied in their jobs, thirsty for a working environment of self-determination, appreciation and room for innovation.
I have noticed not only an increasing need for creative freedom, responsibility and ownership but also for long-term oriented entrepreneurship.
Already back in 1985, Peter Drucker perceived such a tectonic shift in his early stages and described the move and the underlying dynamics such as globalization, changing demographics or the rapid development of the information and communication technology in his book Innovation and Entrepreneurship.
“… broad cultural changes have brought entrepreneurialism into the mainstream. An activity that was once regarded as peripheral, perhaps even a bit suspect, has become cool, celebrated by politicians and embraced by the new generations. Yet the emergence of an entrepreneurial culture entails a broader transformation of the economic fabric of our society, as we see in the rapid proliferation of free agents in the form of contractors, freelancers and self-employed workers… At the same time, in a world of rapid change frequent job and career moves, switches between employed and independent roles become the rule rather than the exception.” (8th Global Peter Drucker Forum “The Entrepreneurial Society”)
Let’s Have a Short Look
The Swiss Start-up Monitor 2013 records a constantly rising total number of startups with more than 12,500 new business ventures launched in 2010 (compared to 384,000 small companies with less than 2 full time employees in total) and a rather low company death rate of 3.5% (compared to the European average of 8.3%). The top five sectors with the highest amount of startups are ICT, Medtech, Engineering, Biotech, and Energy & Greentech.
The Report on Small Firms 2010-2015 even speaks of “The Golden Age for Small Firms” in the United Kingdom. It states a record number of small firms of 5.2 million with an increase of 760,000 since 2010. Compared to 30.8 million people in employment, there are over 4.5 million self-employed people in the UK with an increase of 500,000 since 2010. Small firms account for 48% of private sector employment and it is becoming less likely that people work for a large company for their entire career than thirty years ago.
From small firms to unicorns (billion-dollar startups): The European unicorns (tech companies included only) increase year-on-year by 33%. The unicorn top-five champ countries are UK, Sweden, Germany, Russia, and France.
And what about the development of startups worldwide? In 2015, the United States of America are leading with a total number of 4.8M startups, followed by India (2.0M), UK (845,000), Indonesia (771,000), and Brazil (584,000). Lydia Dishman states in her article “The State of the Most Influential Startups on Earth” that recent estimates put small and medium-sized businesses at more than 90% of global enterprises.
Is Becoming an Entrepreneur a Lifecycle Choice?
And what does entrepreneurship mean to us? To get power over something or someone or to get the power to create?
In Switzerland the typical founder is not in his/her twenties but in the age between 30 and 49. Experiences in entrepreneurship, management, in the relevant industry and work experience in general seem to be rather significant. The same picture prevails at the European unicorns, in most cases founded by experienced entrepreneurs aged between 30 and 40.
The increase in self-employment in the UK is driven by desire. Founders “view it as an opportunity rather than feeling they have no other alternative… a populous survey of business owners found that 84% agreed that being self-employed meant they were more content in their working lives and that only 27% of those who started up did so to escape unemployment.”
For the independent professionals, earning an income as a self-employed person is rather an actively chosen model as the best way using their skills. Additionally, it provides more flexibility and a varied career, and is not regarded as the poor cousin of employment.
Governmental Regulations and Financial Sources
The countries with the most attractive government support for startups are Singapore, the UK, Chile, Finland and Israel. Singapore for example pumped $48M into six venture capital funds, UK waived income tax reliefs on investments up to £100,000 or Israel spent $450M for seed funding and R&D projects.
There are also countries providing entrepreneur visas (e.g. Australia, New Zealand, or UK) or fast-tracked entrepreneur visas (e.g. Ireland, Spain, or Netherland) to fast-track entry into their nations to assist startups. Startup incubation programs get startups going (e.g. Canada, Chile, or Denmark).
Even in France things are beginning to change, in one of the countries with the highest unemployment rate. “The government is figuring out which buttons it should push, and which buttons to leave to the private sector.”
In Switzerland itself, the large part of the financial resources in founding a startup are venture capitalists, own money or money from friends and family, and business angels.
Will Entrepreneurialism Help Us to Get Back to Growth Through Innovation?
The World Economic Forum and G20 leaders call for enhanced economic growth that could be achieved by the “promotion of competition, entrepreneurship and innovation”.
“This desire to stimulate economic and job growth via the application of entrepreneurship and innovation has been a common theme in government policy since at least the 1970s. The origins of this interest can be traced back to the report produced by Professor David Birch of MIT “The Job Generation Process” that was published in 1979.”
A key finding from this work was that job creation in the United States was not coming from large companies, but small independently owned businesses. It recommended that government policy should target indirect rather than direct strategies with a greater focus on the role of small firms.”