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G20 yea 2014 communique¦β and all final reports

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The #G20YEA Summit in Sydney final communique signed by the Presidents of the 20 Young Entrepreneurs organizations together with the national action plans for employment. The G20 Young Entrepreneurs …

The #G20YEA Summit in Sydney final communique signed by the Presidents of the 20 Young Entrepreneurs organizations together with the national action plans for employment. The G20 Young Entrepreneurs Alliance Summit took place in Sydney, Australia, from the 18th to the 22nd of July, 2014. The Young Entrepreneurs of the European Union are represented by YES for Europe.

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  • 1. ! 2014 G20 Young Entrepreneurs Alliance Communiqué Global structural unemployment is a crisis that disproportionately harms young people. Measures to increase youth employment and promote entrepreneurship will increase medium to long-term trend growth and productivity, thus reducing social risks. The nations of the world would improve the return on investment in education by reducing work skills mismatches. The G20 YEA continues to endorse the G20’s call for specific, actionable recommendations to increase growth. The young entrepreneurs of the world gathered at the Sydney G20 YEA Summit support the Australian G20 priorities on private sector led growth and greater resilience of the world economy. We call on the G20 Leaders, Finance Ministers and Central Bank Governors to focus on entrepreneurship and agree to implement policies, legislation and incentives for ecosystems that support start-ups and sustainable high growth[1] entrepreneurial SMEs, young entrepreneurs and enhance private sector led growth. This agreement should commit to eight specific actions to underpin the pillars of building entrepreneurship ecosystems. ! 1. Reform global financial system to provide Investment & access to Capital Facilitate the development of a methodology for financial institutions to provide affordable finance to SMEs, which should be accompanied by learning programs. Develop regulations to accommodate the development of new innovative forms of financing including online cross-border platforms and networks of investors and entrepreneurs, such as crowd sourced equity funding. 2. Education, training and business links Promote close cooperation between the business and education sector to better link educational pathways with labour market needs and address the skills mismatch, with renewed focus on STEM (science, technology, engineering and mathematics) education. 3. Entrepreneurship Culture Install experiential entrepreneurship education programs in all layers of the education system with a focus on gender equality, values, ethics and business morals. 4. Innovation & Technology Implement or expand legislation that incentivizes the commercialisation of innovation and new technology. Incentivise programs that connect research, development and commercialization organisations with entrepreneurs and SMEs. 5. Regulation and strengthening tax systems Reduce regulatory and tax burden on labour for both employers and employees as well as reduce tax and regulations for creation of new companies. 6. Trade & Globalization Create a G20 multilateral start-up visa to improve the ability of entrepreneurs to travel and conduct business internationally, and to increase labour mobility by allowing high and sustainable growth SMEs to hire overseas skilled labour more easily. 7. Attracting Private Infrastructure Investment Ensure that government procurement processes are made more open to small businesses owned by young entrepreneurs. 8. Empower Development Support the United Nations and ensure there is a major goal in the UN post 2015 development agenda on youth employment and entrepreneurship, especially young women. [2] The G20 Young Entrepreneurs’ Alliance (G20 YEA) is a collective of leading entrepreneurship NGOs representing over 500,000 young entrepreneurs across G20 countries and the European Union. The G20
  • 2. ! YEA members have already created an estimated 10 million jobs. G20 YEA is building on partnerships and collaboration with governmental, business and civil society stakeholders such as the OECD, ILO, UN Millennium Campaign, B20, Y20, EY, Accenture and all official G20 engagement groups. In 2014 over 400 young entrepreneurs and leaders from all G20 countries and 14 observer nations, selected to represent the voice of the world’s future business leaders, attended the G20 YEA Summit in Sydney from 18 th July. The 2014 G20 YEA Summit built upon the dialogue between young entrepreneurs that began in Italy (at the G8), and continued at the G20 YEA Summits in Canada, France, Mexico and Russia, resulting in the G20’s recognition of the need for a special focus on youth entrepreneurship in the B20 communiqué and the 2013 G20 leaders’ declaration. The Australian G20 YEA Summit aims to ensure that the ideas of young entrepreneurs adopted by G20 leaders in 2013 will not remain merely a statement, and that the world will witness concrete actions taken towards their institutionalisation. Investment in small and medium enterprises (SMEs) and young entrepreneurs is essential for the G20 countries to meet and exceed the additional 2% increase in global GDP agreed in the Finance Minister’s declaration of February 2014, under Australia's 2014 G20 chair. Youth unemployment in the US and Canada is equivalent to 0.6% of GDP, and over the next 18 years as a result of scarring (lost future earnings due to current unemployment) lost GDP will be 1.3%[3]. In 2014, B20 Australia has presented that the economic opportunity in Europe’s unemployed youth is a potential value of €153 billion per annum, or 1.2% of European GDP[4]. “The top 5% of all companies analysed (in terms of job creation) contributed to 72% of their countries’ aggregate total revenue and to 67% of total jobs. These companies are characterized for being young and presenting high rates of growth” [5] The Moscow 2013 G20 YEA Summit produced ample evidence identifying that any policy to reinvigorate growth and job creation should have entrepreneurship at its core, with a strong emphasis on youth. Government and private sector-led investments in digital infrastructure, education systems and innovation are crucial success factors for enabling thriving entrepreneurial ventures. ! Policies for sustainable and inclusive private sector-led growth, job creation, investment in infrastructure, trade, commercialisation of innovation and participation of women in the workforce must focus on building ecosystems that create, enable and support high growth entrepreneurial SMEs. ! The G20 YEA action plan on youth employment contains specific actions that, during the 2014 G20 YEA summit, every country has committed to implement in order to improve their entrepreneurship ecosystem and create more high growth SMEs. The Accenture report “The promise of digital entrepreneurship” and EY report part 2 “Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20”, both co-published with the G20 YEA, provide specific recommendations and best practices to assist all G20 stakeholders. Our sincerest mark of appreciation for their acknowledgement and support of the G20 YEA to The Hon Tony Abbott, Prime Minister of Australia; The Hon Bruce Billson, Federal Small Business Minister of Australia; Senator the Hon Scott Ryan, Parliamentary Secretary to the Minister for Education of Australia; Dr Heather Smith, Australian G20 Sherpa; Helen Clarke, Administrator UNDP; Angel Gurria, Secretary General of OECD. Thank you for the active collaboration of Mr Robert Milliner, Australian B20 Sherpa; Mr Mike Callaghan, Australian T20 Chair; Ms Holly Ransom, Co-Chair Australian Y20 and Mr Richard Andrews, Director of Engagement for the Australian G20 Presidency. We, the leaders of the world’s young entrepreneurs, commit to reaching out to our G20 leaders and stakeholders here in Australia, and also when we return to our home country. We request that the G20 leaders, governments, ministers and staff support and enable us to implement the G20 YEA action plan on youth employment. [G20 YEA GLOBAL ACTION PLAN ATTACHED] [1] High growth is defined as companies that grow from 10 employees or more, at 20% per annum or more, for 3 years or more. [2] The United Nations post-2015 agenda; Entrepreneurship’s critical role in creating youth entrepreneurship and employment, G20 Young Entrepreneurs Alliance & Y20 Australia, July 2014, https://qaz1.az1.qualtrics.com/SE/?SID=SV_4ZKi9tEgFEAMagJ [3] “Assessing The Long Term Cost of Youth Unemployment.” Martin Schwerdtfeger, Senior Economist. TD Economics Special Report. 29 January 2013. [4] Economic cost of Europe’s youth not in employment, education or training estimated at over €150 billion (2012), Eurofound, October 22, http://www.eurofound.europa.eu/press/releases/2012/121022.htm [5] WEF, 2013, Entrepreneurial Ecosystems Around the Globe and Company Growth Dynamics, Report Summary for the Annual Meeting of the New Champions 2013. http://www3.weforum.org/docs/WEF_EntrepreneurialEcosystems_Report_2013.pdf
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  • 4. 0% 10% 15% 5% 20% 2007 2012 2/3 GLOBAL ACTION TO ADDRESS YOUTH UNEMPLOYMENTGLOBAL ACTION TO ADDRESS YOUTH UNEMPLOYMENT
  • 5. ! ! G20!YEA!2014!Action!plan!on!youth!employment! ! Argentina!9!Action!Plan! Investment(and(access(to(capital( • We!have!been!planning!two!important!meetings!for!the!next!3!months.!One!of!them!will!be!with!the! Minister!of!Economy!Axel!Kicillof.!We!are!asking!him!our!request!on!the!regulation!of!the!law!that! supports!young!entrepreneurs!(25.872).!This!law!enables!young!entrepreneurs!to!get!access!to!state! finance! Education(and(coordinated(support( • In!relation!to!the!annual!day!of!training!for!young!entrepreneurs!on!behalf!of!FEDAJE!we!are!going!to! request!programmes!for!the!Minister!of!Education!to!deeply!analyse!them!and!therefore,!be!able!to! intervene!and!suggest!any!necessary!reforms.! Government(regulation(and(taxation( • The!most!important!program!or!action!plan!for!next!year!are!a!number!of!actions!that!put!pressure!on! the!government!so!that!it!finally!gets!the!regulation!of!the!law!previously!mentioned!(law!25.872).! Moreover,!we!have!also!arranged!meetings!with!regional!legislators!to!talk!back!the!law!at!a!local!and! provincial!level.! Innovation(and(Technology( • Meeting!with!the!science!and!technology!national!secretary!to!ask!him!to!improve!conditions!on! technological!access!to!young!entrepreneurs.!Moreover,!he!has!committed!himself!to!deliver!drafts!on! new!programs!designed!for!technologic!innovation,!as!well!as!the!creation!of!new!TICS! Trade(and(globalization( • We!have!been!able!to!arrange!a!meeting!with!the!Argentinian!chancellery!within!the!secretary!of! economic!matters!and!G20!Hugo!Javier!Gobbi!on!August!20th.!We!will!also!be!presenting!this!summit's! document!and!the!vast!report!on!the!issues!of!illegal!trading!or!black!market.!We!are!also!presenting!a! request!to!get!improvements!on!the!external!commerce!and!trading!for!young!entrepreneurs.! Entrepreneurship,(culture(and(equality( • We!organise!a!big!event!to!train!young!people!on!entrepreneurship!every!year!with!approximately! 3000!young!people!assisting.!This!year,!the!encounter!will!take!place!in!November.!We!have!already! invited!the!Minister!of!Education!to!participate!and!also!to!give!him!a!memorandum!claiming!for! improvements!with!respect!to!these!aspects.! ! Australia!9!Action!Plan! ENYA(&(Australia( • Delegates!will!work!with!ENYA!to!re9brand!&!re9structure!so!the!organisation!will!grow!sustainably! Investment(and(access(to(capital( • ENYA!will!partner!with!ACCI,!Federal!Government!and!private!banks!to!re9establish!a!micro!loan,! education!&!mentoring!program.!Partners!commit!to!long!term!capacity!building!funding!for!2!x!full!time! employees!so!the!program!is!sustainable.! Education(and(coordinated(support( • National!entrepreneurship!curriculum!–!a!group!committee!meeting!will!be!convened!with!the!relevant! ministers.!! • Every!delegate!will!email!their!principle!from!primary!school,!high!school!and!university!to!speak!or! guest!lecture!to!spread!the!entrepreneurship!message.!Delegates!will!coordinate!the!talks!with!Club! Kidpreneur,!ENYA!&!other!education!programs!determined!by!the!leadership!working!group.! • Delegates!commit!to!taking!on!more!interns!&!providing!training!opportunities!in!their!business! Government(regulation(and(taxation( • ENYA!&!Delegate!policy!working!group!submissions!&!meetings! o Minister!for!Small!Business,!Bruce!Bilson!–!All!items! o Treasuror!Joe!Hockey!–!All!items! o Minister!for!Industry,!Ian!McFarlane!–!Entrepreneurs!Infrastructure!Program! o Minister!for!Education,!Chris!Pyne!–!Entrepreneurship!educaiton! o Minister!for!Communications,!Malcolm!Turnbull!–!Crowd!Sourced!Equity!Funding!&!ESOP! o Key!Senators!in!all!states!–!All!items! o ATO!to!discuss!tax!concessions!for!SME!to!enable!growth!!
  • 6. ! Innovation(and(Technology( • Planning!and!initiation!of!a!new!Australian!Centre!for!Entrepreneurship!with!government!ties!and!policy! group,!to!replace!ENYA! • All!delegate!businesses!commit!to!becoming!foundation!members! • 2.5!hours!a!week!donated!to!the!organization!and!making!sure!it!is!sustainable! Trade(and(globalization( • Lobby!for!a!start9up!visa!through!G20!and!APEC!channels.! Entrepreneurship,(culture(and(equality( • Ambassador!and!PR!program!for!start9ups!through!the!Australian!Institute!of!Entrepreneurship.! ( Brazil!9!Action!Plan! Investment(and(access(to(capital( • Implementation!of!two!laws!in!approval!process!that!amplify!access!of!high!risk!capital!markets!and! venture!capital!to!start!ups!and!SMEs!offering!financial!resources!to!new!ventures!and!protecting!the! interest!of!investors!and!entrepreneurs.! Education(and(coordinated(support( • Articulate!with!private!and!public!schools!to!persuade!the!implementation!of!entrepreneurs'!educational! methodology!in!their!curriculum!mainly!in!transversal!subject!matters!and!full9time!teaching! organizations.! Government(regulation(and(taxation( • Enforce!implementation!of!the!resource9allocation!management!council!according!to!article!67!available! in!the!law!of!fiscal!responsibility.! Innovation(and(Technology( • Support!the!development!of!a!new!law!at!federal!level!that!brings!together!Academia,!Government!and! Business!in!a!regular!basis!in!order!to!foster!innovation!and!technology!honoring!the!role!of! professorship/entrepreneurship.! Trade(and(globalization( • Work!with!MDIC!and!APEX!Brazil!to!implement!a!specific!way!to!internationalize!Brazil!young! entrepreneurship!and!utilize!international!resources!such!as!labor,!ideas,!companies,!money!to!advance! Brazilian!Startups!and!SMEs.! Entrepreneurship,(culture(and(equality( • Create!an!integrated!media!plan!which!reinforces!the!advantages!and!positives!attributes!of!being!an! entrepreneur!as!a!career!option!for!the!individual!and!as!a!social9economic!activity!with!high!growth!and! reward!for!society.! ( Canada!9!Action!Plan! Investment!and!access!to!capital! • Futurpreneur!to!establish!criteria!for!certification!and!partner!with!government!for!support! Education!and!coordinated!support! • CRA!registration!process!needs!to!include!the!resource!information!at!the!time!of!number!being!issued.! Delegates!of!G20!YEA!to!commit!to!attend!3!high!schools,!Universities,!elementary!schools,!or!community! organizations!to!share!your!business!story!within!the!next!year.! Government!regulation!and!taxation! • Recommend!to!ministers!of!small!business!and!finance!to!champion!change!in!taxation!laws!to!support! sustainability!for!young!entrepreneurs!and!their!businesses.! Innovation!and!Technology! • Identify!data!that!would!be!most!valuable!for!young!entrepreneurs.! • Identify!the!platform!that!the!data!should!be!presented!on!so!further!actions!can!be!taken!to!implement! • Continue!accountability!efforts!to!ensure!the!plan!is!followed!through.! • The!federal!government!is!encouraged!to!work!with!all!levels!of!government,!particularly!municipalities! to!ensure!accountability!efforts!are!enforced!to!ensure!the!G8!Open!Data!Charter!is!fully!implemented!by! December!31,!2015.! Trade!and!globalization! • Review!of!provincial!legislation!with!the!objective!of!standardizing!and!streamlining!fragmented! regulations!interprovincially,!making!it!easier!and!more!attractive!to!support!international!trade!in!the! long!term! Entrepreneurship,!culture!and!equality! • Government!of!Canada!to!fund!Futurpreneur!to!implement!a!national!campaign!to!showcase,!celebrate,!
  • 7. ! and!encourage!youth!entrepreneurship!in!urban!and!rural!communities!across!Canada,!and!to!ensure! diversity!in!those!leaders!being!represented.! ( China!9!Action!Plan! Investment(and(access(to(capital( • Provide!the!case!studies!to!different!local!commercial!banks!to!help!them!develop!the!financial!products! which!meet!the!SMEs!needs.! Education(and(coordinated(support( • Create!applications!or!websites!which!invite!successful!businessmen!to!teach!the!skills!about! entrepreneurship.! Government(regulation(and(taxation( • Establish!a!platform!which!introduces!the!tax!reduction!policies!and!related!regulations!around!China! Innovation(and(Technology( • Make!a!report!and!submit!to!the!government!bureau!to!shorten!the!IP!protection!process.! Trade(and(globalization( • Bring!more!delegations!to!join!G20YEA!summit.! Entrepreneurship,(culture(and(equality( • Set!up!forum!to!promote!the!spirit!of!entrepreneurship!(invite!entrepreneurs!to!go!into!schools!to!make! speeches)!and!encourage!the!multi9divisions!about!startups!success.! ( European!Union!9!Action!Plan! Investment(and(access(to(capital( • Create!a!truly!united!European!investment!space!with!a!central,!pan9European!stock!exchange!and!align! tax!and!other!incentives!for!angel!and!corporate!investments.! • Capital!given!to!subsidies!is!lost!capital.!! • Replace!the!existing!subsidies!schemes!for!corporations!and!SMEs!with!soft!loans!and!equity!financing! instruments.! Education(and(coordinated(support( • Young!Entrepreneurs!to!peacefully!invade!secondary!and!high!schools!to!promote!entrepreneurial! culture,!improve!vocational!training!and!contribute!to!align!programs!to!newly!required!skills.! Government(regulation(and(taxation( • Harmonization!of!taxation!schemes!across!the!EU,!leveraging!successful!models.!! • Introduce!failure9tolerant!bankruptcy!legislation!across!the!EU!by!2018.! • Use!of!public!procurement!as!an!innovation!instrument,!guarantying!!a!minimum!30%!of!public! procurement!contracts!to!be!assigned!to!SMEs.! • "Entrepreneurial!Visa"!program!to!attract!World9class!talent!to!Europe.! Innovation(and(Technology( • Increase!the!EU!R&D!expenditures!over!GDP!from!2.08%!to!3%!by!2020,!making!sure!that!basic!research! is!evenly!well!funded!across!the!EU.! • Lifelong!learning!programs!for!fighting!digital!illiteracy!in!all!of!the!EU!regions!and!societal!groups,!open! government!data!and!any!other!data!of!public!interest,!strengthen!computer!science!education!(coding! and!more)!starting!from!the!earliest!stage!possible.! • Establish!regulation!for!a!unified!web!services!protocol!for!the!Internet!of!Things.! Trade(and(globalization( • Harmonize!tax,!accounting!and!all!relevant!regulation!for!SMEs!and!startups,!creating!a!truly!single! European!market.!Officially!establish!English!as!the!Business!Language!across!the!EU,!to!overcome!the! language!fragmentation!barrier,!increase!competitiveness!in!the!global!landscape.! • In!a!global!level,!make!sure!that!EU9based!companies!enjoy!the!free!market!benefits!while!doing!business! in!all!other!geographies!where!from!privately9!or!State9owned!companies!also!do!business!in!the!EU.! Entrepreneurship,(culture(and(equality( • Develop!culture!of!collaboration!and!culture!of!failure!with!identifying!and!promoting!role!models!in!All! of!the!EU!Member!States.! ( ! !
  • 8. ! France!9!Action!Plan! Investment(and(access(to(capital( • Tax!incentive!rebate!for!large!companies!who!invest!in!start9ups! Education(and(coordinated(support( • Introduce!an!entrepreneurship!or!Business!project!official!courses!at!school! Government(regulation(and(taxation( • A!simplified!and!unique!Labor!contract! Innovation(and(Technology( • Introduce!a!coding!course!as!compulsory!at!school! Trade(and(globalization( • Create!a!one!year!G20!entrepreneur!working!visa!without!any!condition! Entrepreneurship,(culture(and(equality( • Creation!of!an!"educational!entrepreneurial!programme"!at!school! ( Germany!9!Action!Plan! Investment(and(access(to(capital( • Promote!a!new!startup!funding!program,!supported!by!entrepreneurial!experts!and!a!tax!reduction! scheme,!tailored!to!startups!and!establish!public!bank!guarantees!for!startups!to!reduce!risk!for! founders.! Education(and(coordinated(support( • Bring!entrepreneurial!education!to!schools,!for!example!by!introducing!the!Australian!“KidPreneur! Concept”!in!Germany.! Government(regulation(and(taxation( • Treat!early!stage!ventures!differently!from!established!companies!in!order!to!increase!the!survival!rate! and!to!reduce!the!barriers!of!entry!(mind!set:!entrepreneurs!should!be!able!to!focus!on!their!enterprise! and!not!on!taxation).! Innovation(and(Technology( • Create!a!network!for!qualified!mentors!to!voluntarily!foster!and!encourage!young!entrepreneurs.! Trade(and(globalization( • Create!a!platform!for!communication!and!exchange!of!business!information!with!regards!to!information! relevant!for!startups!and!young!entrepreneurs!in!all!G20!countries.! Entrepreneurship,(culture(and(equality( • "Postulation!for!more!entrepreuneurs!in!the!German!national!parliament,introduce!a!regular!"Meet!the! chancellor!day"!for!young!entrepreneurs!and!startups!to!emphasize!the!relevance!of!entrepreneurs!to!the! public,!and!specifically!introduce!a!"startup!night"!in!Germany!(as!in!Mexico!with!the!Slogan:!"The!best! stories!start!with!a!bad!decision!").! ! India!9!Action!Plan! Investment(and(access(to(capital( • Yi!to!create!online!and!offline!platform!to!facilitate!collaboration!between!mentor!and!mentee!companies.!! • Each!Yi!chapter!to!drive!offline!networking!by!hosting!a!networking!event!possibly!during!the!Global! Entrepreneurship!Week!(GEW)!to!facilitate!collaboration!between!government,!bankers,!investors,! partner!organization,!students!and!entrepreneurs! Education(and(coordinated(support( • Yi!will!drive!implementation!of!entrepreneurship!modules!for!students!through!Yi!YUVA!program.!Credit! based!module!that!will!be!piloted!across!Yi!YUVA!schools.! • Yi!YUVA!will!partner!with!organizations!to!provide!experiential!learning!experiences!for!students!(e.g.! Goonj,!parent!entrepreneur!sessions,!innovative!programs!in!communities!etc.)! • Yi!to!initiate!entrepreneur!education!week!for!schools!(age!15!to!17).!Module!will!include!topics!like! entrepreneurial!thinking,!monetizing!ideas,!finance!management,!inventory!management! • Yi!will!advocate!for!Accreditation!system!for!higher!education.! Government(regulation(and(taxation( • Yi!will!advocate!for!better!and!progressive!labor!laws!and!reforms!for!benefit!of!start9ups!(e.g.!reducing! the!number!of!procedures!and!thereby!reduce!the!number!of!days!for!setting!up!a!business!by!25%)! • Yi!to!advocate!e9governance!in!all!government!transactions! Innovation(and(Technology(
  • 9. ! • Yi!to!drive!creation!as!well!as!delivery!of!entrepreneurship!module!(innovation,!start9up!process,!skill!set! etc.)!by!working!closely!with!National!Skills!Qualify!Framework!(NSQF).!Partner!with!entrepreneurial! cells!of!institutions!like!EDI,!IIM,!IIT.!! • Each!Yi!chapter!to!increase!utilization!of!the!module!through!partnership!with!entrepreneurial! organizations!like!TiE,!Angel!networks,!MSME!industries!at!local!level! • Yi!to!initiate!'Futurepreneur'!program!where!business!leaders!act!as!mentors!for!2!years!for!young! entrepreneur!companies!by!associating!and!serving!on!the!start9up!board!of!advisors! Trade(and(globalization( • Yi!will!advocate!better!trade!agreements!with!neighboring!countries!such!as!Burma,!Bangladesh!and! China! • Yi!will!explore!possibilities!to!ease!trade!with!neighboring!countries!through!CAAYE!(Commonwealth! Alliance!of!Asian!Entrepreneurs)!and!ASEAN.!Policies!such!as!entrepreneurial!visa,!hiring!foreign! workers,!transparency!in!duty!structure!will!be!explored.! Entrepreneurship,(culture(and(equality( • Each!Yi!chapter!will!organize!a!learning!session!around!failures.!Yi!chapters!will!invite!students!for! motivation!and!encouragement!on!risk!taking! • Yi!will!host!a!session!for!members!of!Indian!Women!Network!(IWN)!on!the!topic!of!entrepreneurship! • G20!YEA!2015!delegation!will!comprise!of!50%!women!delegates! • Yi!Key!Youth!Summits!to!have!substantial!number!of!women!speakers!and!women!entrepreneurs! ( Italy!Action!9!Plan! Investment(and(access(to(capital( • Provide!to!young!entrepreneurs!advice!and!networking!opportunities!to!favour!business!angels,!crowd9 funding!and!VCs!equity!investments.! Education(and(coordinated(support( • Young!Entrepreneurs!to!peacefully!invade!secondary!and!high!schools!to!promote!entrepreneurial! culture,!improve!vocational!training!and!contribute!to!align!programs!to!newly!required!skills.! Government(regulation(and(taxation( • Keep!requiring!a!revision!of!the!taxation!scheme!to!promote!employment!rather!than!penalizing!it.! Innovation(and(Technology( • Require!and!contribute!to!increase!R&D!expenditures!over!GDP!from!1%!to!EU!average!of!2%!leveraging! on!newly!introduced!incentive!schemes.! Trade(and(globalization( • Promote!multiple!contamination!opportunities!within!EU!and!globally!to!favor!increased!cross9border! cooperation!amongst!young!entrepreneurs.!Promote!indication!of!origin!and!values!associated!to!it.! Entrepreneurship,(culture(and(equality( • Require!inclusion!of!entrepreneurial!culture!(i.e.!risk!taking,!critical!thinking,!creativity!and!problem! solving)!within!Youth!Guarantee!programs.! ( Japan!9!Action!Plan! Investment(and(access(to(capital( • To!establish!the!culture!of!Commercial!fund!to!support!entrepreneurs!to!ease!too!much!responsibility!or! risk!to!make!Social!tolerance!to!failure!and!Environment!to!promote!re9challenge.! Education(and(coordinated(support( • To!promote!business!education,!to!provide!opportunity!to!child!to!experience!a!first!step!of!Business!and! Entrepreneur.! Government(regulation(and(taxation( • To!strengthen!the!connection!to!Government,!tell!our!opinion!and!attitude!to!Ministry!of!economy,!trade! and!industry,!Small!medium!enterprise!agency!to!get!policy!change.! Innovation(and(Technology( • To!make!the!website!to!promote!business!matching!thru!Internet,!sharing!the!information!and!success! story!over!varies!of!area,!ages!and!field!of!business.!That!makes!new!innovation.! Trade(and(globalization( • To!touch!Government!and!to!suggest!narrow!the!Target!to!protect!domestic!industry.!Relax!Visa,!Tariff,! other!barrier,!ease!Red!tape!and!in!the!other!field.! Entrepreneurship,(culture(and(equality( • We!JCI!Japan!is!a!group!of!entrepreneur!aiming!positive!change!to!the!world.!To!promote!to!increase! member!of!women,!foreigners!to!accept!diversity!in!our!society.!
  • 10. ! Mexico!9!Action!Plan! Investment(and(access(to(capital( • Vinculation!between!banks!and!universities!for!finance!education.! The!creation!of!a!"dummies!guide"!to!get!access!to!capital! Education(and(coordinated(support( • Encourage!of!the!program!Impulsa!(it's!a!program!that!arrange!meetings!with!students!and!business!man! so!that!they!can!experience!the!real!problems!of!being!an!entrepreneur)! Platform!online!call!"ask!a!business!man"! Government(regulation(and(taxation( • The!creation!of!a!simplify!document!that!explains!the!taxation!in!Mexico.! Press!conference!with!people!of!SAT!to!ensure!the!certification!of!the!document!"taxes!for!dummies"! Innovation(and(Technology( • National!network!in!Coparmex!commissions!in!our!states!and!it!will!be!in!charge!for!the!vinculation!of! universities!students!and!the!national!commission!of!innovation!and!technology! Trade(and(globalization( • Vinculate!international!organisms!and!Government!to!identify!necessities!and!to!promote!the!product!or! service! Entrepreneurship,(culture(and(equality( • Unify!all!the!initiatives!that!promote!entrepreneurship!culture!to!create!a!network!that!will!be!available! for!young!entrepreneurs.! ( Russia!9!Action!Plan! Education(and(coordinated(support(( • Create!programs!and!platforms!to!promote!interaction,!apprenticeships,!internships!and!learning! between!entrepreneurs!and!university!students!to!assist!in!career!orientation!and!modern!skills! acquisition.! Entrepreneurship,(culture(and(equality(( • Conduct!contest!for!social!advertising!campaign!promoting!entrepreneurship!in!the!context!of!ethical! behavior.! Innovation(and(Technology(( • Regulate!the!market!to!promote!accessible!digital!infrastructure,!competition!and!growth!of!innovative! companies.! • Work!with!Media,!take!advantage!of!public!speaking!opportunities,!and!work!with!large!trade! associations!to!promote!entrepreneurship!as!a!driver!of!innovation!and!economic!diversity.!! Government(regulation(and(taxation(( • Persuade!regional!financial!commissions!on!the!importance!of!VAT!reform!in!promoting!regional! economic!development!and!entrepreneurship.! • Work!with!government!to!revise!the!tax!burden!on!labor!(including!both!wage!and!non9wage!labor!costs! on!the!part!of!the!employer!in!the!areas!of!innovation!and!social!entrepreneurship.! Investment(and(access(to(capital(( • Work!with!banking!associations!and!industry!to!lobby!more!favorable!regulations!and!banking!facilities! for!start9up!and!small!and!medium!business!loans.!! Trade(and(globalization( • Enlist!entrepreneurs!to!more!actively!participate!in!developing!a!high!quality!of!life!in!their!regions!that! will!retain!talent,!attract!investment!and!promote!social!well!being! ( Saudi!Arabia!9!Action!Plan! Investment(and(access(to(capital( • Establish!GCC!fund!to!support!SMEs!in!the!region!(seed!funding,!start9up,!growth)! Education(and(coordinated(support( Not!provided! Government(regulation(and(taxation( • Create!one!stop!shop!to!help!entrepreneurs!get!their!license!and!start!their!business!easily! Innovation(and(Technology( • Enhance!the!mentors!to!encourage!the!innovation!environment!in!the!GCC.! Trade(and(globalization( • Annual!exhibition!for!GCC!entrepreneurs!and!leveraging!the!participation!of!SMEs!in!the!international!
  • 11. ! events.! Entrepreneurship,(culture(and(equality( • Propose!white!paper!to!introduce!department!for!entrepreneurship!in!the!GCC!council!to!run!start9up! weekend!in!each!of!the!Gulf!countries.! South!Africa!9!Action!Plan! Investment(and(access(to(capital( • Quality!of!the!application!for!finance!is!often!sub9standard.!We!need!a!"one!stop!shop"!(FUNDER,!Small! Enterprise!Development!Agency!"Non9Financial!Support)!to!assist!in!improving!the!quality!of!the!funding! Education(and(coordinated(support( • To!create!a!school!economic!ecosystem.!Pupils!to!have!enterprise!within!schools!(I.e.!Supply!the!uniforms! to!schools)!and!train!unemployed!youth!to!be!facilitators!of!the!student!entrepreneurs.!(Student! Enterprise!Programme)! Government(regulation(and(taxation( • The!policies!and!laws!(like!BBBEE!Act)!talk!to!Affirmative!Action,!Women!Empowerment,!and!yet!Youth! Empowerment!is!not!legislated.!Arrange!a!meeting!with!Presidency!(Deputy!Minister!for!Youth),! Department!of!Economic!Development,!and!Ministry!&!Small!Medium!Enterprise!to!radically!advance! regulation!of!Youth!Empowerment.! Innovation(and(Technology( • The!Ekasi!Weekend!Start9up!9!a!Bi9Monthly!weekend!bootcamp!where!40!Township!Youth,!where!they! are!grouped!in!teams!of!5!each!facilitated!by!mentors,!and!each!person!presents!an!idea!and!that!idea!is! developed!into!a!business!model! Trade(and(globalization( • A!Programme!to!unearth!youth!entrepreneurs!ready!to!trade!internationally.! Entrepreneurship,(culture(and(equality( • Same!as!Action!on!Education!And!Coordinated!Support! ! South!Korea!9!Action!Plan! Investment(and(access(to(capital( • Allow!exemptions!&!concessions!to!the!early!stage!ventures!(1~3!yrs.)!in!order!to!increase!the!survival! rate!&!reduce!the!barriers!of!entry!until!the!June!2014! Education(and(coordinated(support( • Publish!TOT!Entrepreneurship!training!program!until!the!December!2014! Government(regulation(and(taxation( • Allow!exemptions!&!concessions!to!the!early!stage!ventures!(1~3!yrs.)!in!order!to!increase!the!survival! rate!&!reduce!the!barriers!of!entry!until!the!June!2014! Innovation(and(Technology( • Develop!Design!thinking!(human!center!oriented)!program!for!innovation!&!creativity!until!the!June! 2015! Trade(and(globalization( • Build!Asia!Young!Entrepreneur!Alliance!to!help!entrepreneur!understand!globalization!&!expand!market! to!the!global!until!the!march!2015! Entrepreneurship,(culture(and(equality( • Launch!Bootcamp!with!Parents!(48!hours)!until!the!December!2014! ! Turkey!9!Action!Plan! Investment(and(access(to(capital( • TUGIAD!will!be!a!part!of!entrepreneurship!ecosystem!through!forming!a!company!among!its!members!by! creating!a!fund!to!support!entrepreneurs.! • TUGIAD!will!intense!its!financial!networking!role!to!create!an!access!to!financial!instruments!(Banks,! Angel!Investors,!Venture!Capitals,!Governmental!Funds,!etc.)!for!start9up!companies!and!directing!new! project!ideas!and!start9up!companies!also!to!its!own!members.! Education(and(coordinated(support( • TUGIAD!is!already!providing!entrepreneurship!certificate!programs!in!several!universities!in!Turkey.! These!training!programs!will!be!transformed!into!an!accredited!training!format.!TUGIAD!will!also!try!to! provide!a!training!incentive!for!entrepreneurs!from!the!government!for!these!trainings.!
  • 12. ! Government(regulation(and(taxation( • In!consultation!with!the!entrepreneurs!of!different!sectors,!TUGIAD!will!develop!a!draft!tax!reform!plan! and!submit!it!to!the!government!for!a!more!favourable!tax!application!for!the!entrepreneurs.! Innovation(and(Technology( • Turkish!delegation!(TUGIAD)!will!work!with!public!institutions!to!develop!a!program!to!support!a! selective!group!of!innovative!manufacturers!with!export!capabilities!which!will!be!certified!for! prioritization!in!terms!of!governmental!support.!After!determination!of!these!certified!SMEs'!problems,! potential!solution!plans!will!be!developed!and!submitted!to!government!and!necessary!training! programs!will!be!provided!to!the!SMEs.! Trade(and(globalization( • TUGIAD!will!encourage!the!locally!successful!small!businesses!and!entrepreneurs!to!participate!in!the! B2B!meetings!with!international!communities!during!TUGIADs!frequent!business!trips.! Entrepreneurship,(culture(and(equality( • In!consultation!with!the!entrepreneurs!of!different!sectors,!TUGIAD!will!develop!a!draft!improved! syllabus!for!high9schools!and!universities!and!submit!it!to!the!ministry!of!education!and!academic! councils!of!the!universities.! ! United!Kingdom!9!Action!Plan! Investment(and(access(to(capital( • Target!3!technology!transfer!offices!and!link!them!to!at!least!3!most!influential!entrepreneurial!networks! in!the!UK.! Education(and(coordinated(support( • Bring!young!entrepreneurs!from!3!most!influential!entrepreneurial!networks!in!the!UK!and!link!them!to! existing!university!outreach!programs.! Government(regulation(and(taxation( • Promote!the!UK!Patent!Box!so!that!more!young!entrepreneurs!can!benefit!from!good!taxation!policies! Innovation(and(Technology( • Host!meeting!with!relevant!government!agencies!to!continue!to!increase!R&D!expenditures!as!a! proportion!of!GDP!9!during!Global!Entrepreneurship!Week.! Trade(and(globalization( • Promotion!of!fast!track!visas!for!start9ups!to!attract!talent!at!the!meeting!with!relevant!government! agencies!during!Global!Entrepreneurship!Week.! Entrepreneurship,(culture(and(equality( • Ensure!entrepreneurs!from!3!most!influential!entrepreneurial!networks!in!the!UK!promote!gender! diversity!and!tolerance!to!failure!in!the!educational!programmes.! ! USA!9!Action!Plan! Investment(and(access(to(capital( • We!believe!there!is!great!opportunity!in!providing!tax!credits!for!small!business!and!social!enterprise! investments.!We!will!learn!more!about!success!stories!on!the!state!level,!gather!case!studies!from!our! members!and!empower!them!to!help!start!a!movement!with!the!federal!government.! Education(and(coordinated(support( • We!all!commit!to!sharing!our!business!story!in!3!community!gatherings!this!year,!to!highlight!both!the! successes!and!challenges!faced!by!entrepreneurs.!Show!the!importance!of!ACTION,!even!in!the!face!of! doubt!and!fear!of!failure.! Government(regulation(and(taxation( • Meet!with!senior!leadership!of!Small!Business!Administration!to!highlight!challenges!faced!by!SMEs! dealing!with!complexity!of!US!tax!code.!Purpose!education!programs!to!prevent!avoidable!missteps!and! tax!navigators!to!provide!assistance!when!misstep!occurs.!! Innovation(and(Technology( • Overly!restrictive!visa!policies!are!blocking!SMEs!from!retaining!the!talent!they!need!and!needlessly! hindering!economic!growth!by!deporting!skilled!graduates.!We!will!collect!case!studies!from!our! members!of!how!this!is!impacting!their!business,!what!changes!they!need!and!identify!organizations! targeting!this!topic!that!can!assist!us!with!impacting!government!policy.!! Trade(and(globalization( • We!will!leverage!EO’s!network!in!45!countries!to!provide!global!business!immersion!opportunities!for!US! students!studying!aboard.!! Entrepreneurship,(culture(and(equality(
  • 13. ! • Entrepreneurs!are!heroes!!We!will!take!steps!towards!a!public!awareness!campaign!that!celebrates!the! success!and!struggles!of!the!entrepreneur,!with!a!deliberate!focus!on!highlighting!diversity!of!gender!and! race.!! !
  • 14. Part 2 Avoiding a lost generation Ten key recommendations to support youth entrepreneurship across the G20
  • 15. WelcomeAvoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20, contains both key recommendations and actionable guidance based on best practices adopted by governments across the G20. It follows on from our previous report, action, where we surveyed 1,000 entrepreneurs on a wide range of possible policy and other initiatives that would boost their activities. across borders to impact both developed and developing economies was rising unemployment, an issue that affected young people, in particular. While growth has picked up in many countries and a new sense of optimism is present through much of the global economy, the high number of young unemployed has proven a persistent and deeply entrenched barrier to further progress. Although policymakers around the world have hunted hard for sustainable solutions, a global youth unemployment rate of 16.1% context, the broader message of economic recovery is one that must hold limited resonance for a young person without a job, or even the prospect of one. And yet all is not lost. Once again, the answer lies in the activities of one of the world’s most precious economic commodities: entrepreneurs. As generators of jobs, supporters of local communities and pivotal components of more prosperous societies, it’s no wonder they are so highly prized by governments across the G20 and beyond. Young entrepreneurs are of particular importance. Brimming with potential and energy, theirs are activities — if nurtured and supported correctly — that can lead to meteoric growth, jobs and success across societies. So, how can G20 governments help? An important starting point is the recognition that while a global phenomenon, youth unemployment varies from one G20 country to another. Low skill levels may be prevalent in some countries, whereas others enjoy higher skills but limited job new guide which provides a framework for assessing the youth employment challenge in G20 countries. From this analysis, and our own extensive experience with governments and entrepreneurs, we propose 10 key recommendations to G20 policymakers to consider. Solving this challenge will not happen overnight. Youth unemployment has penetrated deep into the G20 and breaking free of its grip requires governments and business to work together to support the job-creating activities of entrepreneurs. Helping greater numbers of young people to start and sustain their own enterprises holds the key to a stronger global economy and the emergence of a better working world: we hope this report helps accelerate the process. Maria Pinelli Global Vice Chair Diagnostic methodology Contents Developing an entrepreneurial ecosystem 40 44 Welcome 01 02 12Setting the scene Access to funding 20 Tax and regulation 30 culture 36
  • 16. In December 2013, Australia assumed the role as Chair of the G20; a position that is surrounded with immense responsibility and complexity but, more importantly, the potential for a and inclusive growth, employment, investment in infrastructure, trade, driving the commercialization of innovation and increasing the participation of women in the workforce) are all outcomes that result from building ecosystems that create and enable high-growth are still faced with a global employment crisis which must be addressed with the same urgency and priority as the global collective of leading entrepreneurship non-governmental over 400 young entrepreneurs and leaders from 37 countries We look forward to supporting the Australian Government in the improvement and implementation of key priority areas, • • Facilitating open trade in goods and services • A strong and vibrant research sector • • The R&D Tax Incentive • • and thrive • • • • • Crowdsourced equity funding paper • Peer-to-peer lending • • • acknowledgement of youth and entrepreneurship in the 2013 commitment of the G20 employment working group to address We are particularly thankful and excited about the depth, hope together we will create a positive impact for many Sincerely, Jeremy Liddle Australia 1
  • 17. 2 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 jobs for youth” shows economic vulnerability; education levels and disparity in employment between youth and adults in the labor force. A higher score corresponds to Rare is the G20 policymaker who has not sought to address one of the biggest challenges of our times — youth employment. As an issue that has proved borderless in scope and deep in impact, it should come as little surprise that there are many government programs in place around the world that have sought to address it. Leveraging initiatives already successfully deployed in other countries is attractive and practical. However, conditions in all countries are not the same, and a program that works in one environment may need to be customized to be successful in another. With this in mind, we have developed a guide to diagnosing the youth employment challenge in G20 countries. of youth employment challenge for G20 countries. The framework shows the relative position of G20 economies across speed of economic activity — or their relative capacity to create performance on the challenge of providing “decent” employment for youth. G20 countries are segmented into four quadrants, and on “quality jobs for youth.” In recognizing the differences in context for the youth employment challenge across economies, the objective of the governments. To bring these to life, the report presents a selection of best practice case studies that correspond to the and employment quality dynamics between quadrants, showcasing the different ways entrepreneurship policy can be successfully applied to action our recommendations and support youth employment. Using this new guide, and drawing on our own extensive experience with governments and entrepreneurs, we have developed 10 key recommendations as well as supporting actions for G20 governments to consider. 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 Saudi Arabia South Africa Italy South Korea France Russia Japan United States Germany United Kingdom Canada Australia China Indonesia India Argentina Turkey Speed of economic growth Quality jobs for youth 12 3 Brazil 4 Policy implications: sustain economic performance; Focus on skills gap and employment quality Policy implications: sustain economic performance; sustain/grow competitive advantage Policy implications: improve economic performance; sustain/grow competitive advantage Policy implications: improve economic performance; Focus on skills gap and employment quality Solid economy; weaker skills match Weaker economy; weaker skills match Solid economy; solid skills match Weaker economy; solid skills match Mexico 1
  • 18. 3Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 Canada Argentina Best practice case studies governments Access to funding 1 Capital without mentorship is lost capital : Create funding mechanisms, either government run or government backed, that make mentorship Actions • entrepreneurs alongside mentorship and funding support. • Fund mentoring programs, and/or invest in mentoring programs through technology-focused, or skills-focused, government departments. • Tie start-up funding to mentoring by requiring young entrepreneurs to have a mentor at the early stages of their business for at least two years that involves regular engagement. • Match the right mentor with the young entrepreneur by developing a pool of mentors that can be drawn upon to match with the relevant entrepreneur. • and potential impact of mentorship programs. Launch business needs of young entrepreneurs. • Facilitate access to collateral-free capital for young entrepreneurs along with grants and other assistance as appropriate, to promote inclusive entrepreneurship.
  • 19. 4 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 Understanding Finance for Business initiative Canada Germany China Australia Best practice case studies 2 Access to alternative funding is critical : Create strong relationships and provide angels to develop or create initiatives that enable alternative sources of capital Actions • from business angels and VCs. • Provide incentives to venture capital and angel investors to invest in start-ups. • Create a community of angel-based investors. • Support friends and family in investing in small business through access to tax incentives, credits, deductions and incentives. • guaranteed loans to VCs. • Create a strong network of accelerators and incubators to support high-potential young entrepreneurs. • Collaborate with the private sector to support online crowdfunding and create new initiatives in a competitive environment, including equity crowdfunding.
  • 20. Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 Russia Russia Japan Best practice case studies 3 Public funding matters : Sponsor start-up growth with low-cost funding for targeted groups. Actions • Provide government funding support to start-ups. • Foster start-up programs mentored by academic institutions by directly investing in these institutions. • Develop an entrepreneurial support pipeline starting with online training, workshops, then peer-to-peer networks, mentorship opportunities, customer linkages and export readiness. • Boost female-led start-ups by providing government funding. •
  • 21. 6 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 Best practice case studies India Italy 4 credit moving : Create a new class of loan for small funding to meet expansion capital needs. Actions • For the Ministry of Finance or Commerce to establish and • Provide loans particularly focused on propelling startup that do. • targeted funding from banks. • new jobs for young people. • Provide intensive skills-based training and bank funding for young entrepreneurs. • Boost female-led start-ups by providing government funding.
  • 22. 7Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 Tax and regulation Best practice case studies Australia Canada Turkey Argentina France Corporate Small Business Development Forum Targeted tax and business incentives are highly important to supporting young entrepreneurs in scaling their businesses Actions • Identify and encourage investment schemes best able to target support on youth entrepreneurs. • Develop tax incentives to support and advance these schemes. • Develop tax incentives to encourage youth job creation. market access. Actions • Drive a government procurement scheme which includes youth entrepreneurs as a targeted supplier. • Support enterprise collaboration, and procurement opportunities, between high-growth young entrepreneurial •
  • 23. 8 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 France Canada Best practice case studies French 2014 reforms to simplify the administrative code France Best practice case studies 7 entrepreneurs changing visa rules and offering funding support. Actions • Support international student mobility and introduce G20 multi-lateral visas. • Relax G20 business visa restrictions among G20 countries. • Promote immigrant entrepreneurs by linking them to funding institutions and business incubators. • Promote inbound start-up activity by providing relocation funding support. Complex and burdensome rules in areas such as tax hold back young entrepreneurs Simplify and streamline tax administration to ease administrative burdens on young entrepreneurs. Actions • Develop effective instruments to measure administrative and compliance burdens. • Simplify tax rules and administration to ease burdens. • Improve support and guidance available to young entrepreneurs. 6
  • 24. 9Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 Positive mainstream views about entrepreneurship are needed to attract young people : Create a positive narrative around entrepreneurship to help engage young people from an early age. Actions • start-up stage, and that promote the value of entrepreneurship to society and in particular youth. • Promote entrepreneurship opportunities through an integrated approach, combining government and industry in particular. • Target and educate unemployed youth about the opportunities entrepreneurship can bring them. • Publicly celebrate young entrepreneurs success and international promotion of domestic start-ups and • Integrate media/cultural campaigns with a broader national strategy that promotes the link between job creation and entrepreneurship. Best practice case studies Indonesia France 8 Entrepreneurship culture
  • 25. 10 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 culture of entrepreneurship accelerators and networks to bring relevant talent together. Actions • while they are still in school and at university. Promote through an outreach program. • Promote organizations and environments that will positively • Bring together innovators and commercial organizations to showcase high-tech start-ups. • Launch initiatives to promote a culture of entrepreneurship • associations. Canada Australia Germany Best practice case studies 9
  • 26. 11Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 Russia For many of the recommendations and actions to have sustainable impact they need to work as part of a regional ecosystem, and within a regional ecosystem framework that fosters and attracts a critical mass of talent, capital and most importantly entrepreneurial leaders : Create the foundation for a regional Actions • funding model to support regional entrepreneur ecosystems. • Provide funding for a lead organization or consortia of organizations at the regional level that includes comprehensive entrepreneurship ecosystem indicators. • Provide funding to regional organizations and have them work within a regional alliance model comprised of all entrepreneur universities; and all levels of government. They operated within a coordination framework and meet on a regular basis. • development for the 21st century. • Collaborate with business to deliver more robust testing of entrepreneurs’ ideas and bring commercially viable opportunities to market. • Identify a short list of key issues challenging G20 countries incentives to attract young entrepreneurs across the G20 to solve these problems. Aviv-Yafo start-up ecosystem Israel Best practice case studies 10 Developing an entrepreneurial ecosystem
  • 27. 12 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 scene The global challenge but for millions of people around the world who remain locked out of the jobs market, the economic recovery must seem a far way off. A look at the numbers tells its own grim story. In stood at 15.7%2 3 with only slight falls in both cases from the previous year. In the G20 countries, youth unemployment stood at 16.1%.4 Youth unemployment also differs in character from one country to another. In the G20, some face issues of low skills levels, while other countries’ youth may have high skills, but few job available, it should come as little surprise that despite the efforts of policymakers to help more young people back into work, youth unemployment — surely one of the most invidious greatest challenges for G20 governments to still address. ) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% Argentina Australia Brazil Canada European Union China India Indonesia Saudi Arabia South Korea Turkey United Kingdom United States South Africa Russia Mexico Japan Italy Germany France 2013PE 2012 2010 2006 http://www.oecd.org/std/labour-stats/HUR-Jan14.pdf, 14 January 2014. Organization, http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/ genericdocument/wcms_190699.pdf, September 2012, page 2. ILO website, http://www.ilo.org/global/research/global-reports/global-employment-trends/2014/
  • 28. 13Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 Governments nonetheless have a wide range of approaches at crisis of 2007–08, many focused on the renewal and improvement of infrastructure. An important current approach is early years of growth and development. These approaches can all be effective in providing new job opportunities. However, Young people have suffered far more from the recent recession than their older counterparts in that they face “a much higher probability of being unemployed when in the labor force and they are more often employed in precarious jobs.”5 According to the Mexico and Saudi Arabia — in which the youth unemployment rate was over four times higher than that for adults over the age of 25. The ILO report, Global Employment Trends for Youth 2013,6 pointed out that many young people are working in low quality jobs that are insecure, poorly paid, with irregular hours and minimal job satisfaction that do not make good use of their to return, there is a need to repair the damage and look for lasting solutions to youth unemployment, in order that the generation so badly affected does not remain at a permanent to promote potential long-term solutions to youth unemployment, which include “apprenticeship schemes, youth guarantees, measures to promote youth entrepreneurship.”7 In this way, it is seeking solutions that emphasize employment quality and a close match between jobs and skills. schemes Vocational education and training is designed to help young people navigate the transition from education to work. It could include employment at relevant businesses under arrangements such as internships or apprenticeship schemes. Ideally, these would involve new economy businesses such as those in digital media and data analytics. In these ways it increases employability, matching and adapting young people’s skills to a valued type of work. The success of the apprenticeship model in Germany, a country with relatively low youth unemployment during the recession context of the recent economic slowdown.”8 G20 countries have Australia awarded retention bonuses to companies contemplating dismissing their apprentices; France granted apprentices; and Mexico increased funding for training grants. Brazil’s Professional Apprenticeships Plan “calls on all large and medium-sized enterprises to hire apprentices to a minimum of 5% of the workforce.”9 The UK and Italy recently introduced reforms to increase the number of apprenticeships. One problem in following the German apprenticeship model, however, is that it requires a similarly supportive culture, which is hard to achieve without adopting key aspects of German industrial life and education. For example, the UK’s initiative to adopt and transplant the German model has encountered problems because of a lack of commitment from industry, and because the “education system provides no clear vocational track.”10 WCMS_212423/lang--en/index.htm, 8 May 2013, page 42. 26 April 2014. “Youth unemployment is now a ticking bomb for all governments, both from developed countries and emerging countries. In the 21st century, the jobs we need to create will come neither from the big corporations nor from government, but they will come mainly from
  • 29. 14 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 Youth guarantees The youth guarantee is a means of tackling youth unemployment and which entitles young people to support in the labor market. and its main objectives are to promote labor market integration and prevent long-term youth unemployment.11 Of the G20 countries, Germany has the most mature youth guarantee Member States “to ensure that all young people under 25 receive a good quality offer of employment, continued education, an apprenticeship or a traineeship within four months of leaving formal education or becoming unemployed.”12 This offer is then to be adapted to each individual need and situation. encouraging Member States to adopt this policy. It is also uncertain whether it will make a major contribution to youth share the social market economic model of Scandinavia. Youth entrepreneurship work so that it matches their own skills and interests. important way of harnessing their enthusiasm, energy and ambition to contribute to economic development.”13 If their widely to society. It is generally accepted that entrepreneurs “create jobs, increase innovation, raise competition and are responsive to changing economic opportunities and trends.”14 Young entrepreneurs also can also act as role models for their peers and, by their own company’s operations or more their example. http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_212423.pdf, p. 66. http://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---ifp_seed/documents/publication/wcms_175469.pdf, accessed July 2014, page 1.
  • 30. Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 unemployment unemployment, a new tool which highlights the different policy dynamics of the economic situation and youth employment. There are two coordinates: the speed of economic growth and quality employment for youth. Speed of economic growth combines the following data about a country’s young people: their participation in the labor force; their unemployment rate; their inactivity rate; and their employment to population ratio. of youth in the labor market, economic vulnerability and the share of youth unemployment in total unemployment. G20 countries are scored out of 10 on speed of economic growth and quality jobs for youth, which shows their performance relative to other G20 countries on these dimensions.15 A high score indicates that the country’s position is a relatively favorable one. The tool also includes a measure of the relative scope of the by the size of the total youth population by country (i.e., those G20 members are positioned on the chart, and represented by a sphere representing the size of the youth population. For example, Australia and Canada have positive scores on both the speed of economic growth and on quality jobs for youth, while Italy’s scores are by contrast relatively poor. These countries are therefore positioned in diagonally opposite quadrants while on the chart. 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 Saudi Arabia South Africa Italy South Korea France Russia Japan United States Germany United Kingdom Canada Australia China Indonesia India Argentina Turkey Speed of economic growth Quality jobs for youth 12 3 Brazil 4 Mexico Figure 1 15. Scores in the diagnostic show the relative position of a given G20 country relative to other G20 countries only. Data for other economies is not included in the scoring system.
  • 31. 16 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 Implications for government and policy development unemployment. It analyzes the appropriate response for each country to its own youth employment problem, given its position to provide quality jobs for youth. Indonesia, for example, has a solid economy but shows softer performance on its current ability to provide quality employment opportunities for its young people This assessment suggests distinct implications for governments and for policy development across the G20. For example, best practice policy examples for Indonesia will be different from those for France or South Korea, which show relatively strong performance on quality jobs, but softer economic conditions. Policymakers in government need to take account of the present conditions of youth employment in their own country and frame approach into their respective national socio-economic context 16 The best practice exemplify the differences in successful policy application, There is clearly no easy solution to the problem of youth unemployment. Any approach must address several components, such as government initiatives to diversify industry, promote apprenticeships, offer development stage funding and tax relief, use education as a driver for change, and foster a culture of entrepreneurship. The approach must also take account of the particular character of youth unemployment in each country, so that the government’s response is targeted and answers. Quality jobs for youth 1.0 1.0 2.0 2.0 3.0 4.0 5.0 6.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 7.0 8.0 9.0 10.0 Solid economy; weaker skills match Solid economy; solid skills match Weaker economy; weaker skills match Weaker economy; solid skills match Policy implications: sustain economic performance; focus on skills gap and employment quality Policy implications: sustain economic performance; sustain/grow competitive advantage Policy implications: improve economic performance; sustain/grow competitive advantage Policy implications: improve economic performance; focus on skills gap and employment quality Speed of economic growth 12 3 4 Figure 2
  • 32. 17Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 http://www.ey.com/GL/en/Services/Strategic-Growth-Markets/ey-exceptional-extras-january-2014---G20-entrepreneurship-barometer-2013, accessed July 2014. Not only has entrepreneurship proved a fertile source of job creation, with entrepreneurs accounting for 67% of new jobs across the G20,17 it also drives future economic growth and helps establish stronger, more prosperous communities. However, young entrepreneurs themselves are concerned at a lack of recognition of this reality, and that it is unnecessarily G20 Entrepreneurship Barometer 2013, we found that “only 15% reported their own country had a culture that fully supported their efforts.”18 The policy priority for all the G20 countries must be to create and maintain sustainable entrepreneurship ecosystems. These will encourage young people to start their own businesses and shape them into high-quality working environments, developing their own skills together with those of their employees. Such an initiative should be a long-term joint venture, between government, business and the young entrepreneurs themselves, with the ultimate goal of increased and sustainable job creation and radically lower youth unemployment.
  • 33. 18 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 There are many examples of best practice from across the G20 which are targeted at enabling entrepreneurship and creating more jobs for young people. Furthermore, “best practice” for a economic circumstances, the strength of entrepreneurial ecosystem and previous best practice examples. In this report we investigate and showcase a selection of best practice initiatives from across the G20 and present evidence of their progress so far. We distill what is important for G20 governments to consider, and list clear actions for them to deploy in their respective unemployment to classify best practices according to economic and employment quality drivers. In the G20 Entrepreneurship Barometer 2013,19 we explored the concept of “the power of three,”setting out how governments, entrepreneurs and the larger corporations can work cooperatively to create thriving entrepreneurial ecosystems. The Barometer surveyed the views of 1,500 young entrepreneurs from across the G20, capturing and drawing together their insights. These young people considered the rate of progress within each country’s entrepreneurial environment, as well as identifying key enablers and obstacles. To provide the context for the best practice case studies that follow, we have summarized the results of our survey within each of three main pillars: funding, tax and regulation, and culture.20 In each, we have set out case studies and key messages to G20 governments, taking into account conclusions drawn from our diagnostic tool. Getting labor working in developing countries job creation and employment generation across the emerging markets but there is a huge amount still to do. For example, according to the World Bank’s World Development Report 2013, around 600 million new jobs will be required over the next 15 years to support a growing workforce. It is important to note that in most emerging economies, 9 out of 10 jobs are created by the private sector, which is the foundation of any thriving economy. We have developed a private sector development framework, in collaboration with governments and international development partners, to drive inclusive entrepreneurial particularly vital to the future of developing countries because in the coming years, they must rebalance their economies toward greater domestic consumption, import demand and higher-value business activity. The creation of an environment in which entrepreneurship these objectives, as will the need to empower the next emerging market: women. With nearly one billion expected to enter the workforce over the next decade, women are increasingly seen as the engine of the next wave of economic growth. Governments have a vital role to play in facilitating and encouraging this entrepreneurial development and funding ecosystem. In doing so, they will help make it far more likely that new businesses take root, delivering the sustainable jobs and growth so vital for accelerated development and the beginning of a better working world. rohan.malik@in.ey.com.
  • 34. 19Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 I am a young entrepreneur, and here’s how you can help me The young entrepreneurs of the G20 hold the key to solving our youth unemployment problem, but we must help them to achieve their potential. Their key concerns are as follows: I need training 66%say entrepreneurial skills need I need a more supportive culture 51%expect government programs providing education, funding and high impact. I need my contribution to be recognized 50%think the promotion of entrepreneurs’ role in creating new jobs will have a high impact on entrepreneurship in G20 countries in the next three years. I need help with access to funding 73%say access to funding remains very or their countries. I need support for those who invest in me 41%support tax incentives for investment in small businesses. I need society to tolerate failure 23%say business failures are perceived as barriers to future business prospects. I need a streamlined tax and regulatory system 29%rank a “reduced burden of government regulation” as an important factor in accelerating entrepreneurship. I need innovative funding 49%believe innovative funding platforms will accelerate entrepreneurship. I am innovative, I have a global mindset, I want to learn. I seek out advice and support when it is available. on my community and bolster the economy by creating jobs. I am a young entrepreneur.” “
  • 35. 20 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 Access to funding This is the single area in which improvements are seen to be G20 Barometer. There should be a “deeper and more diverse mix of funding options,” including more innovative ways of raising 21 More traditional methods, such as venture capital funds and private sector investor investment, should be incentivized to focus more on entrepreneurial businesses. The bank lending model needs to traditional collateral: alternative approaches are required, such as credit guarantee schemes. website, http://www.ey.com/GL/en/Services/Strategic-Growth-Markets/ey-exceptional-extras-january- 2014---G20-entrepreneurship-barometer-2013, accessed July 2014, page 14. A particularly valuable source of advice is the experienced entrepreneur who acts, often pro bono, as a mentor to young start-ups. The key recommendation is to create funding mechanisms, either government run or government backed, that Actions for policymakers: • entrepreneurs alongside mentorship and funding support. • Fund mentoring programs, and/or invest in a mentoring programs through technology-focused, or skills-focused, government departments. • Tie start-up funding to mentoring: young entrepreneurs must have a mentor at the early stages of their business. The relationship must be sustained for at least two years and involve a monthly engagement. • Match the right mentor with the young entrepreneur by developing a pool of mentors that can be drawn upon to match with the relevant entrepreneur. For example, the needs of young entrepreneurs must be considered, as well as the proximity of mentorship. • and potential impact of mentorship programs (e.g., subsidized loans or venture capital schemes, in addition to grants and • Facilitate access to collateral-free capital for young entrepreneurs along with grants and other assistance as appropriate, to promote inclusive entrepreneurship. Capital without mentorship is lost capital1
  • 36. 21Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 Futurpreneur Canadian (formerly the Canadian Youth Business 22 includes a start-up program that provides the support that entrepreneurs need to get their businesses off the experience of a “hand-matched” business professional who mentors them for a minimum of two years to ensure the success of the business. Futurpreneur Canada provides access to up to Development Bank of Canada. Performance: Since 1996, Futurpreneur Canada has helped 6,570 young entrepreneurs to start their own business, creating more than 26,000 jobs and generating more than CAD191m in tax revenue in the process. 22. Futurpreneur website, http://www.futurpreneur.ca/, accessed 5 June 2014. The U.S. Small Business Administration website, 24. “Startup America,” The U.S. Small Business Administration website, http://www.sba.gov/about-ba/sba_initiatives/startup_america/about_startup_america, accessed 5 June 2014. PulsoSocial, http://pulsosocial.com/en/2013/11/14/start-up-chile-and-start-up-brasil-two-very-different-beasts/, TechCrunch website, http://techcrunch.com/2013/04/15/startup-brasil-brazil/, 15 April 2013. — has strong economic growth and higher quality jobs for youth. and sustain/grow competitive advantage. program designed to mobilize the current generation of early- stage entrepreneurs to help build and support the next generation of American businesses.23 — has strong economic growth and higher quality jobs for youth. and sustain/grow competitive advantage. Performance: energy sector pilot. This funded four accelerators that in turn supported 100 start-ups. The approach is expected to be scalable to support 1,000 start-up companies.24 Where the picture is mixed, with high output but with lower quality jobs, the policy objective is to leverage funding incentives to drive innovation and entrepreneurship skills development among young people. Start-up Brasil is a national acceleration program. It aims to support the creation, and accelerate the growth, of approximately 150 high-tech start-ups across the country. The investment, which is part of the government’s Programa support to expand their marketing and sales efforts.25 The program has an initial budget of US$19m, with a stipulation that have operations in Brazil. Performance: This is early days for the program. Nonetheless, it provided 56 start-ups with approximately US$90,000 in initial capital, as well as funding nine accelerators (selected from a pool are expected to make additional investments of up to R$1m multiplier effect. With companies required to be incorporated in of the skills gain. — has stronger economic growth and lower quality jobs for youth. and focus on closing the skills gap and improving employment quality.
  • 37. 22 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 • The Korea Fund of Funds was set up to support local venture stable capital sources and establishing a “venture ecosystem.”26 The average size of funds is US$7m, and The uniqueness of the fund is that it invites more capital from the private sector. The government’s capital creates synergy providing loans or guarantees. • grants.27 1,000 people in their 20s and 30s who have ground-breaking ideas but no capital. They are also given training at the business establishment center, which acts as a workspace and and supplies. Performance: were created in 1,551 businesses. In its fourth cycle, from March to May of this year, the program stepped up its support and decided to award 1,200 winners instead of 1,000. — has softer economic growth and higher quality jobs for youth. and sustain and grow skills-based competitive advantage. targeted primarily at those who are from economically disadvantaged backgrounds. It assists and supports young people between the ages of 18 and 35 who have innovative business ideas for which they have not been able to secure funding elsewhere. There is an initial assessment phase during which candidates’ ideas and business plans are tested in interview. Then, for those who are successful, the Fundación Impulsar provides seed capital along with business planning courses, development support, a greater awareness of the culture of entrepreneurship and a year of mentoring. The mentors are experienced business people who volunteer 4 hours per week to share their knowledge. Performance the 1,200 microenterprises already funded by the Fundación Impulsar, 70% are still trading and they have an average of three employees each. — has softer economic growth and lower quality jobs for youth. performance and focus on closing the skills gap and improving employment quality. 26. Ashoka Changemakers wsj.com/news/articles/SB10001424127887323393804578554681586293800, 19 June 2013.
  • 38. 23Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 Private equity and VC are important parts of the funding landscape, which are of particular help to entrepreneurs in scaling up their businesses. While not a panacea, crowdfunding Along with funding, business accelerators and incubators also support innovative businesses by providing them with technical and marketing guidance from networks and from experienced entrepreneurs. There is a clear cross-fertilization between alternative funding and tax policy. This is evident in the Turkish scheme for business angels and the Australian tax credits for venture capital. The key recommendation is to create strong relationships and business angels to develop or create initiatives that enable alternative sources of capital. Actions for policymakers: • from business angels and VCs. • Provide incentives to venture capital and angel investors to invest in start-ups. • Create a community of angel-based investors. • Support friends and family in investing in small business through access to tax incentives, credits, deductions and incentives. • guaranteed loans to VCs. • Create a strong network of accelerators and incubators to support high-potential young entrepreneurs. • Collaborate with the private sector to support online crowdfunding and create new initiatives in a competitive environment, including equity crowdfunding. Access to alternative funding is critical 2 — has strong economic growth and higher quality jobs for youth. and sustain/grow competitive advantage. Development Fund jointly launched the Understanding Finance for Business initiative to support London’s entrepreneurs in raising capital.28 It helps companies to make informed decisions advice through seminars, workshops and one-on-one support. Through the Gateway2Investment program,29 it provides other investors. Performance: The program helps London-based businesses 250 employees and are looking to raise from £100,000 — has strong economic growth and higher quality jobs for youth. and sustain/grow competitive advantage. growth in the UK by promoting new enterprise and entrepreneurship.30 Performance: It gives income tax relief at 50% of the cost of shares on a maximum annual investment of £100,000 31 Relief is given through reducing the investor’s income tax liability. In addition, it offers an exemption of 28% tax on any capital gains occurring within three years of the investment.32 28. “Government backed schemes and initiatives promoting new business startups,” ENT magazine website, http://www.entmagazine.com/start-ups.html, accessed 29 May 2014. 29. “Gateway2Investment,” British library website 30. “Seed enterprise investment scheme,” SEIS website, http://www.seis.co.uk/, accessed 29 May 2014. Gander Tax Services website 2014; Lauren O’Neill, “Securing tax relief for prospective investors,” FPM website, http://www.fpmca.com/news/securingtaxreliefforprospectiveinvestors, 18 Nov 2013.
  • 39. 24 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 33. Robb Mandelbaum, “S.B.A. Signs Its First Venture Capital Fund to New Investment Program,” The New York Times website, 34. “Chapter 3.1: Connecting Canadians With Available Jobs,” Government of Canada Budget 2014 website, Europa website, Private equity & Venture capital Association (EVCA) website, 36. German Accelerator website, http://germanaccelerator.com/, accessed 5 June 2014. — has strong economic growth and higher quality jobs for youth. and sustain/grow competitive advantage. 35 — has strong economic growth and higher quality jobs for youth. and sustain/grow competitive advantage. — has strong economic growth and higher quality jobs for youth. and sustain/grow competitive advantage. Stage Innovation Fund initiative in January 2013 to improve access to investment capital for start-ups.33 The program provides government-guaranteed loans to VC funds, which in turn use this amount to make equity investments. It aims principally to provide direct investment to those companies that are otherwise overlooked by VCs. Performance: The program aims to provide US$200m in debt venture funding. The German Accelerator is a PPP which aims to expose German tech start-ups to American business culture and help them to enter the US market.36 It provides entrepreneurs with three to six months of hands-on mentoring at locations in Silicon Valley, San Francisco and New York City, during which time experienced mentors continually challenge the entrepreneurs’ assumptions and provide feedback to them. The start-ups actively engage with customers, establish relationships, adjust to local styles of connections with potential investors. Performance: There have been about 250 applications since the program’s inception in 2011, and over 40 companies have already taken part. The Canadian Government launched the Canada Accelerator and Plan in September 2013. The program aims to establish a developed network of accelerator and incubator organizations to enable high-potential young entrepreneurs, to develop their ideas into globally competitive businesses. Performance: provide the program with an additional CAD40m (US$36.4m over four years, starting in 2015–16, and thus increase its total 34 35 along with introduced a single set of fundraising regulations that once VCs Performance: than 3,000 companies were venture backed. Start-up stage investments accounted for the majority of VC activity by 35ii
  • 40. Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 — has strong economic growth and higher quality jobs for youth. and sustain/grow competitive advantage. — has stronger economic growth and lower quality jobs for youth. and focus on closing the skills gap and improving employment quality. In 2012, the Western Australian Government partnered with the Australian crowdfunding platform Pozible to launch a ScreenWest initiative, making up to US$250,000 available for digital projects in the state.38 The program is an excellent example of the “Power of 3,” with state government, a commercial company and entrepreneurs all being involved. Creative teams will need to attract contributions online in order to secure the grant. Then for every dollar they raise through online crowdfunding, ScreenWest will contribute a further three on digital visual media, an industry that has proved especially attractive to young people. Performance: There have already been a dozen projects which have achieved at least 100% funding, and many others already partially funded.39 The country is in the process of building 150 business start-up incubators for Chinese students who are returning to China after attending higher education institutions abroad.37 It offers an informational platform and facilitates the communication and sharing of knowledge about human resources, projects, policies and funding. Performance: enterprises were started by students who have returned to China after studying abroad. Nurturing youth entrepreneurship entails a sustained effort from ventures by providing seed capital at a reasonable cost. Many countries have set up specialized funding agencies that focus on and early-stage start-ups. Given many young entrepreneurial funding support through these channels also demands a coordinated approach. In particular, entrepreneurs look to governments to play a more supportive role by encouraging more public-private partnerships, developing an entrepreneurial support pipeline starting with online training, workshops, then peer-to-peer networks, mentorship opportunities, customer linkages and export readiness. Linking funding to education is consequently an important mechanism for supporting young entrepreneurs. The key recommendation is to sponsor start-up growth with low-cost funding for targeted groups Actions for policymakers: • Provide government funding support to start-ups. • Foster start-up programs mentored by academic institutions by directly investing in these institutions. • Develop an entrepreneurial support pipeline starting with online training, workshops, then peer-to-peer networks, mentorship opportunities, customer linkages and export readiness. • Boost female-led start-ups by providing government funding. • Public funding matters 3 37. C. Custer, “China Has 150 Start-up Incubators Just for Returning Study-Abroad Students,” Tech in Asia website, http://www.techinasia.com/china-150-start-up-incubators/, 24 August 2011. 38. “State Govt takes lead in innovative grant allocation initiative,” Government of Western Australia website, 39. “ScreenWest’s 3 to 1,” Pozible, http://www.pozible.com/collection/detail/25, accessed 5 June 2014.
  • 41. 26 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 41. Steph Welstead, “Government launches start-up loans for young entrepreneurs,” Startups UK website, http://startups.co.uk/government-launches-start-up-loans-for-young-entrepreneurs/, 27 May 2012. 42. Abigail Van-West, “Start-up Loans scheme for young entrepreneurs explained,” Startups UK website, http://startups.co.uk/start-up-loans-scheme-for-young-entrepreneurs-explained/, 28 January 2013. 43. “Helping Russian entrepreneurs: Russia’s Internet Initiatives Development Fund,” Think Russia website, http://www.thinkrussia.com/policy-initiatives/helping-russian-entrepreneurs-russia’s-internet- initiatives-development-fund, 27 November 2013. 44. Oliver Staley, “Russia teams with MIT on Skolkovo Institute of Science and Technology,” The Washington Post, http://www.washingtonpost.com/business/russia-teams-with-mit-on-skolkovo-institute-of-science-and-technology/2013/05/09/54b31e9c-b5da-11e2-b94c-b684dda07add_story.html, 8 May 2013. 45. Andrii Degeler, “Russian tech hub Skolkovo in 2012 by the numbers: $97m in grants, 750 residents, 49 funds,” The Next Web, http://thenextweb.com/insider/2012/12/17/skolkovos-2012-97m-in- grants-750-residents-49-venture-funds/, 17 December 2012.46. “Japan’s tech startup solution? Women,” CNN Money website, http://management.fortune.cnn.com/2013/09/11/japan-tech-women/, accessed 29 May 2014. 46. Michael Fitzpatrick, “Japan’s tech startup solution? Women,” Fortune magazine, http://management.fortune.cnn.com/2013/09/11/japan-tech-women/, 11 September 2013. quality jobs for youth performance and sustain and grow skills-based competitive advantage. The Russian Government launched its Internet Initiatives funding, training, and organizational support for aspiring internet entrepreneurs.43 The IIDF’s goal is to create a favorable funding environment for the country’s digital economy. Performance: As of October 2013, the IIDF had received nearly 1,000 proposals from across Russia. The IIDF plans to select the 100 most promising applications, of which 50 will receive up to 50 will receive online access to training courses and advice from industry experts. — has softer economic growth and higher quality jobs for youth. performance and sustain and grow skills-based competitive advantage. Skolkovo Innovation Center44 (also known as “Russia’s Silicon Skolkovo near Moscow. The project is similar to the ecosystem, Silicon Valley, in the US, providing end-to-end support for new ventures to develop successfully. The Skolkovo Institute of Science and Technology’s curriculum only offers graduate Finance. It seeks to create tech start-ups and lure corporate research laboratories with tax breaks and relaxed visas and customs regulations. It utilizes the infrastructure, resources and other features of the technology park. Performance: It has successfully backed 750 start-ups. By 201245 it had US$97m in grants, 750 residents and 49 venture capital funds. It also had created 131 intellectual property items. And had attracted IBM, Microsoft and Siemens to locate to — has strong economic growth and higher quality jobs for youth. and sustain/grow competitive advantage. The Japanese Government has inaugurated a fund to help young female entrepreneurs launch new companies. This forms a part of the country’s economic revitalization measures, known as the “Japan is Back” campaign. Tech start-ups launched by women are a particular growth area in Japan.46 Performance: As part of this funding program, Japan’s young female entrepreneurs. Start-up founders also can apply for special low-interest loans from banks. The UK Government launched a new scheme, in 2012, offering loans to young people to help them start new ventures. The StartUp Loans Scheme which has funds of £82.5m 40 aged between the ages of 18 and 24.41 The most promising applicants receive formal mentoring and training, including help with developing a business plan. Those with “robust and approved” plans are eligible for loans of around £2,500 Performance: By the end of 2013, more than 3,000 people had registered interest for a StartUp Loan and over 460 new businesses had been approved, with loans totaling over 42 — has strong economic growth and higher quality jobs for youth. and sustain/grow competitive advantage.
  • 42. 27Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 47. “Partnership to provide support to youth entrepreneurs,” Industrial Development Corporation (IDC) website, http://idc.co.za/media-room/press-release/media-releases-2013/400-record-disbursements-for-industrial-development-2, 21 October 2013. 49. “Helping Russian entrepreneurs: Russia’s Internet Initiatives Development Fund,” Think Russia website, http://www.thinkrussia.com/policy-initiatives/helping-russian-entrepreneurs-russia’s-internet-initiatives-development-fund, 27 November 2013. http://www.economic.gov.za/communications/media/press-releases-2013/361-minister-patel-welcomes-efforts-to-fast-track-youth-entry-into-business/download, 21 October 2013. will enable youth-owned businesses to have easier access to 47 The agreement will result in a coordinated approach to providing funding and support services to these businesses. The cooperation agreement between the IDC, sefa and the NYDA April 2013, in which the government and its social partners made a commitment to prioritize youth employment and skills development. The IDC announced it had set aside ZAR1b 48 from its Gro-e-Scheme to fund businesses owned by young entrepreneurs.49 Performance: These programs offered support to 44 youth- owned businesses during the six months from the signing of enterprises during the same period.50 — has softer economic growth and lower quality jobs for youth. and focus on closing the skills gap and improving employment quality. Accessing expansion capital can be a frustrating process for young entrepreneurs. Banks are low-risk lenders, and quite often young entrepreneurs are unable to meet the qualifying criteria for traditional loans. As a result, governments and organizations in many provinces offer secured loans, or even subsidized interest rates and credit mediation facilities, to qualifying young entrepreneurs. to keep a growing business, at the same time as managing landlord on time. While tight credit conditions were particularly risk aversion and imperfect information on young business expansion. Unless the entrepreneur has a stockpile of entrepreneurs establish a line of credit with their bank, in there is a clear need for bank credit among young entrepreneurs in the scale-up phase of their business, and an important role for policy in driving facilitation. credit moving4
  • 43. 28 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 Trade and Industry, Republic of South Africa website, http://www.dti.gov.za/sme_development/ — has softer economic growth and lower quality jobs for youth. and focus on closing the skills gap and improving employment quality. women and young entrepreneurs. It has a national footprint. It is one initiative among several led by the National Department of Trade Investment for the Government of South Africa that brings Samaf and several other institutions, like the National 51 52, it brings together a wide range of products and services comprising loans, and non-cash incentive grants that play an enterprises. Performance: For the 2011-12 period, Samaf disbursed of loans and grants. About 68% of the loans by the FIs to the end users were in rural communities and 93% were micro-enterprise The total number of end user borrowers increased by 53% to 62,459 in 2011-12 from 40,726 in 2010-11. Finance, Samaf and the Industrial Development Corporation micro and medium enterprises. This led to the creation of about 19,853 direct jobs during the period. — has softer economic growth and lower quality jobs for youth. and focus on closing the skills gap and improving employment quality. Young people in India tend to be excluded from entrepreneurship opportunities as commercial banks traditionally steer away from them. Recognizing that a lack of adequate credit at reasonable interest was a deterrent, the Government launched a Credit Guarantee fund scheme for micro and small enterprises In 2007-08 under the terms of the scheme, Bharatiya Yuva two of India’s largest banks, Bank of Baroda and the India Bank each entrepreneur’s business performance and provides in partnership with the business community. The key recommendation is to create a new class of loan for targeted funding to meet expansion capital needs. Actions for policymakers: • For the Ministry of Finance or Commerce to establish and access. • Provide loans particularly focused on propelling startup that do. • offering targeted funding from banks. • creating new jobs for young people. • Provide intensive skills-based training and bank funding for young entrepreneurs. • Boost female-led start-ups by providing government funding. Performance: Between 2013 and the present, 426 young entrepreneurs have been supported. At the end of three years, increase their initial investment by a factor of three. On both measures, BYST achieved average ratios of 1:10 in 2014 of all its entrepreneurs supported to date.
  • 44. 29Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 International Finance Corporation website, http://www.ifc.org/wps/wcm/connect/industry_ext_content/ 54. 10,000 Women website uropa website Inside Europe website, http://insideurope.eu/taxonomy/term/157, 24 July 2013. Shell liveWIRE news, http://www.shell-livewire.com/home/newsevents/news/shell_ksa_and_scb_join_ programme/1244710409.619/, accessed 28 May 2014. Arabian Business website, http://www.arabianbusiness.com/scsb-give-23m-415-smes-515375.html, 27 August 2013. 61. Qredits website, www.qredits.com, accessed 23 June 2014. — has stronger economic growth and lower quality jobs for youth. and focus on closing the skills gap and improving employment quality. — has softer economic growth and lower quality jobs for youth. and focus on closing the skills gap and improving employment quality. 60 — has softer economic growth and lower quality jobs for youth. and focus on closing the skills gap and improving employment quality. There is a major credit gap problem throughout Latin America: funding, compared to the easier task of their male counterparts. worldwide “Banking on Women” program, the International entrepreneurs in Brazil.53 Performance: There are over 150 women-owned businesses cited on the program’s website.54 1. entrepreneurs graduating from the Intilaaqah KSA program (an enterprise training program to equip young Saudi SCSB’s loans packages range from SAR500,000 58 Performance: Since 2010, Shell Intilaaqah has trained over 7,500 Saudis, who have between them started 665 enterprises and created 2,174 jobs. 2. The SCSB undertook another initiative last year to help young entrepreneurs to start their own businesses, by lending them and new enterprises and offers a coordinated approach to free loans, the bank offers coaching and mentoring. Performance: 59 ,61 the Netherlands’ only national microcredit institution, inclusion of Dutch micro-entrepreneurs who have a viable created with the support of national banks, which refer potential and also with the referring bank. Performance: signed an agreement in Milan in January 2014 to provide a credit line to support youth employment and small and medium 55 Performance: 56 channeled by the UBI Group’s network banks to Italian start-ups, which create new jobs for young people in the 15 to 29 age as support.57
  • 45. 30 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 Tax and regulation Targeted tax incentives are vital in fostering high-performing enterprises. Furthermore, authorities view these incentives as a way to reduce unemployment rates among the young generation. Key recommendation #1 is to encourage investment in start-ups Actions for policymakers: • Identify and encourage investment schemes best able to target support on youth entrepreneurs. • Develop tax incentives to support and advance these schemes. • Develop tax incentives to encourage youth job creation. The EY G20 Entrepreneurship Barometer found a clear consensus that the tax and regulatory systems are far too entrepreneurs can focus on running their businesses rather than being caught up in administration. There was also strong support for tax incentives to encourage the entrepreneurs to start their businesses and for their investors to provide the necessary capital. Government support also needs to be concentrated where it is most effective, for example at the start-up phase, Furthermore, international mobility and market access standout. In fact, there is a direct link between internationalization and the 62 For fast-growing, young imperative to driving market growth and business sustainability. to markets,” European Commission’s Directorate General for Enterprise and Industry website, http://ec.europa.eu/enterprise/policies/sme/market-access/index_en.htm, last updated 2 April 2013. Targeted tax and business incentives are highly important to supporting young entrepreneurs in scaling their businesses
  • 46. 31Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 63.“Seed enterprise investment scheme,” SEIS website, http://www.seis.co.uk/, accessed 29 May 2014. Gander Tax Services website, 2014; Lauren O’Neill, “Securing tax relief for prospective investors,” FPM website, http://www.fpmca.com/news/securingtaxreliefforprospectiveinvestors, 18 Nov 2013. 66. Mary Meldrum, “A Banner Year for British Columbia Venture Capital,” Trade and Invest British Columbia website, Startup Smart website, http://www.startupsmart.com.au/planning/entrepreneur-election-watch-early-stageventure-capital-limited-partnerships-update/2013070110105.html, 2 July 2013; Australian Government website, http://www.business.gov.au/grants-and-assistance/venture-capital/esvclp/Documents/ Mondaq website, 70. Jonathan Ortmans, “Angel investors spread their wings,” Entrepreneurship website, http://www.entrepreneurship.org/blogs/policy-forum-blog/2014/march/angel-investors-spread-their-wings.aspx, 31 March 2014. — has strong economic growth and higher quality jobs for youth. and sustain/grow competitive advantage. Under new provisions in New Brunswick, which come into effect for the 2014 tax year, residents investing in small businesses in the province will receive a 30% non-refundable personal income tax credit of up to CAD75,000 per year. A small business venture capital tax credit was introduced in British Columbia in 1985, an early example of such concessions. It encourages investors to make equity capital investments in small businesses in British Columbia, in order to give them access to early-stage VC. Performance: In 2013, British Columbia had VC investments totaling CAD478m, more than double the CAD198m invested in 2012.66 Partnerships — has strong economic growth and higher quality jobs for youth. and sustain/grow competitive advantage. program aims to boost the country’s early-stage VC sector. The such as exemptions on their share of the fund’s revenue and capital. This incentivizes high net worth individuals and networks to invest in Australian start-up businesses.67 Performance: Under legislation, early-stage VC groups must have assets of between US$10m and US$100m to be eligible for investing should have less than US$50m in assets before the investment. Once the assets cross the US$250m mark, the 68 — has softer economic growth and lower quality jobs for youth. and focus on closing the skills gap and improving employment quality. In February 2013, the Turkish Treasury introduced tax incentives for business angels. The new framework provides tax incentives to licensed angel investors, allowing them to deduct up to 100% of their investment from their personal income tax base. It forms ecosystem by developing public policies for business angels and business angel networks.69 Performance: More than 100 investors applied for angel capitalize on these tax advantages.70 — has strong economic growth and higher quality jobs for youth. and sustain/grow competitive advantage. individuals investing in small and early stage start-up businesses the UK by promoting new enterprise and entrepreneurship.63 Performance: It gives income tax relief at 50% of the cost of shares on a maximum annual investment of £100,000 64 Relief is given through reducing the investor’s income tax liability. In addition, it offers an exemption of 28% tax on any capital gains occurring within three years of the investment.65
  • 47. 32 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 — has softer economic growth and lower quality jobs for youth. and focus on closing the skills gap and improving employment quality. In March 2014, the municipal council of Rosario in central Argentina put forward a proposal for a tax incentive which seeks to encourage youth employment.71 According to the proposal, an employer who hires an 18 to 24 year old will gain a tax credit equal to twice the amount of tax paid during the period prior to hiring. If that individual shows that he/she is still studying in secondary or tertiary education, the credit will be doubled. Performance: year’s progress in March 2015. Key recommendation #2 is to enable young, high-growth market access. Actions for policymakers: • Drive a government procurement scheme which includes youth entrepreneurs as a targeted supplier. • Support enterprise collaboration, and procurement opportunities, between high-growth young entrepreneurial • — has softer economic growth and higher quality jobs for youth. and sustain and grow skills-based competitive advantage. was formed to stimulate the growth of small enterprises. It acts exposure, increase their productivity through competitiveness and help them to grow. Performance: 72 rose to 22.4% in 2013 from 21.2% in 2012. They also initiated 73 — has softer economic growth and lower quality jobs for youth. and focus on closing the skills gap and improving employment quality. Several large corporations have developed programs to increase their procurement from small enterprises. Sponsoring corporations run their program either individually or in are being made by business membership organisations, such as the National Business Initiative, to increase the number of large corporations involved in linkage programs with small enterprises. Performance: The program supports small enterprises by increasing large corporations procurement from them. 71. “Argentina – Tax incentives to promote youth employment,” , Pacte PME website, http://www.pactepme.org/uploads/blog/20140701_cp-bilan-annuel.pdf, accessed 3 July 2014.
  • 48. 33Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 Young entrepreneurs need to be able to establish themselves in geographical locations which are fertile areas for their particular business approach and products, whether in the overall business ecosystem or accessing a particular group of skilled individuals. Mobility may involve a temporary exposure to new countries, or it may be the more radical approach of wholesale emigration. step toward attracting young entrepreneurs from across the should be retained and incentivized to remain in the country to create value-adding businesses. — has stronger economic growth and lower quality jobs for youth. and focus on closing the skills gap and improving employment quality. The Government of Brazil’s policy on small and micro businesses offers a broad spectrum of initiatives to support private sector growth. Small businesses with a turnover of up to R$2.4m prioritized for government procurement projects of up to Performance: entrepreneurs6 • The UK Government, through UK Trade and Investment from international student to local entrepreneur.74 The Tier 1 encourage international students who are graduating from UK universities to extend their stay in the country in order to establish a business. Prospective recipients can either apply to their own university in the UK or to the UKTI Sirius Programme.75 Sirius invites talented young entrepreneurs with innovative start-up ideas to relocate to the UK. In return they receive a 12-month start-up support and accelerator their business. Performance: More than 1,500 graduate entrepreneurs from Programme. Of these applicants, over 30 teams will have relocated to the UK by June 2014. — has strong economic growth and higher quality jobs for youth. and sustain/grow competitive advantage. The key recommendation is to encourage top talent by changing visa rules and offering funding support. Actions for policymakers: • Support international student mobility by relaxing visa norms and introducing G20 multi-lateral visas. • Relax business visa restrictions among G20 countries. • Promote immigrant entrepreneurs by linking them to funding institutions and business incubators. • Promote inbound start-up activity by providing relocation funding support. 74. Ryan Schechter, “What the UK can do to stimulate entrepreneurship amongst its foreign students,” Nesta website, http://www.nesta.org.uk/blog/talent-drain-uk, 14 January 2014. 75. “UKTI’s Sirius Programme brings in entrepreneurs from Nigeria, Vietnam and Italy to start up in the UK,” Growth Business website, http://www.growthbusiness.co.uk/news-and-market-deals/ business-news/2448457/uktis-sirius-programme-brings-in-entrepreneurs-from-nigeria-vietnam-and-italy-to-start-up-in-the-uk.thtml, 16 December 2013.
  • 49. 34 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 Mondaq website, http://www.mondaq.com/ government likely to facilitate access to subsidies for start-ups and lower regulatory burden,” IHS Global Insight Daily Analysis, 18 February 2014, via Factiva, © IHS Global Insight Daily Analysis; “ measures-in-france-to-support-enterprise.html, accessed 27 May 2014. — has strong economic growth and higher quality jobs for youth. and sustain/grow competitive advantage. In an effort to attract innovative foreign entrepreneurs to Canada, the federal government created the Start-up Visa Program in April 2013. The program links immigrant entrepreneurs with experienced private sector organizations that are experts in working with start-ups. The program also fast-tracks permanent residency applications for immigrant entrepreneurs who are able to secure funding or support from a designated angel investor group or VC fund.76 In addition, the Canadian Government introduced the new business incubator stream in October 2013 under the Start-up Visa Program. It allows foreign entrepreneurs to apply directly to incubator and accelerator programs. These institutions will evaluate proposals and provide recommendations to Citizenship and Immigration Canada for approval of their immigration applications. Applicants under the business incubator stream can immigrate to Canada in 77 Performance: The Start-up Visa Program aims to offer 2,750 visas a year to immigrant entrepreneurs and their families.78 It is recruitment of more than 13,000 immigrant entrepreneurs to Canada. — has softer economic growth and higher quality jobs for youth. and sustain and grow skills-based competitive advantage. The French Government also aims to facilitate funding and ease visa rules for entrepreneurs. In February 2014, the government announced plans to create an entrepreneur’s visa and provide funding for start-ups planning to move to France. Performance: France intends to offer subsidies amounting to the country.79
  • 50. Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 where complexities in the tax system for both businesses and for the government to consider ahead of the annual budget. The OTS draws on external expertise from the tax and legal in the tax system and provide additional advice to the OTS. As part of a cross-cutting policy to simplify administrative procedures for citizens and businesses the French Government entrepreneurs set up and develop their businesses. This includes measures such as the abolition of the requirement to publish the notes to the annual accounts for very small companies (less than administrative code — has softer economic growth and higher quality jobs for youth. and sustain and grow skills-based competitive advantage. Key recommendation is to simplify and streamline tax administration to ease administrative burdens on young entrepreneurs. Actions for policymakers: • Develop effective instruments to measure administrative and compliance burdens. • Simplify tax rules and administration to ease burdens. • Improve support and guidance available to young entrepreneurs. Complex and burdensome rules in areas such as tax hold back young entrepreneurs 7 — has strong economic growth and higher quality jobs for youth. and sustain/grow competitive advantage.
  • 51. 36 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 culture For young people, the perception of entrepreneurs in the media is particularly important, especially in the digital media. The key recommendation is to create a positive narrative around entrepreneurship to help engage young people from an early age. Actions for policymakers: • the start-up stage, and that promote the value of entrepreneurship to society and in particular youth. • Promote entrepreneurship opportunities through an integrated approach, combining government and industry in particular. • Target and educate unemployed youth about the opportunities entrepreneurship can bring them. • Publicly celebrate young entrepreneurs success and international promotion of domestic start-ups and • Integrate media/cultural campaigns with a broader national strategy that promotes the link between job creation and entrepreneurship. Young entrepreneurs require a more supportive culture, in which their contribution to society is properly recognized and their success is celebrated. The converse of this is that there should also be a greater tolerance of failure, which can be a valuable source of knowledge and experience. To encourage more entrepreneurs, a country needs a set of beliefs that make entrepreneurship a valid and respected career choice. The culture should also be more inclusive,80 opening the door to the sort of talent that is often excluded. Women and immigrants and the disadvantaged can make a huge contribution, yet today they are often under-represented in the entrepreneurial community. Of the young entrepreneurs surveyed in the EY G20 Entrepreneurship Barometer, 84% believed that raising awareness of their role as job creators improves public attitudes, and it can encourage others, from all walks of life, to follow their example. Positive mainstream views about entrepreneurship are needed to attract young people 8
  • 52. 37Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 81. Slideshare, http://www.slideshare.net/prioridadesestrategicas/seed-ingles, accessed 5 June 2014. 82. “The French Tech - Working and succeeding in France,” http://www.france.fr/en/working-and-succeeding-france/french-tech.html, accessed on 5 June 2014 http://www.usatoday.com/story/tech/2014/03/10/ozy-paris-tech-startups/6257647/, accessed 5 June 2014. france-digitale-launches-with-a-bang-french-startups-make-1-billion-euros-per-year/, 3 July 2012. 84. Vivienne Walt, “Fleur Pellerin Works to Make France Safe for Tech Startups,” BusinessWeek, en.pdf, 17 February 2014. Bank Mandiri website, http://csr.bankmandiri.co.id/en/menu-mandiri-young-entrepreneur-14.html, accessed 5 June 2014 87. “Bank mandiri-bank-terbaik-di-indonesia,” Slideshare Last year, the state government of Minas Gerais launched the US$34,400, equity-free grant to early-stage start-ups, from Brazil and abroad, that will have a base in Minas Gerais. The objective is to turn the state into Latin America’s leading tech hub, by fostering its entrepreneurial culture while supporting new and innovative technology ventures.81 Performance: key drivers of entrepreneurship, and 40 companies from the over six months to build their business. Programme forms part of South Africa’s 10-year Youth It targets young people throughout the country, particularly those who are unemployed, and encourages them to view entrepreneurship as a suitable way of obtaining employment and economic opportunities.85 Performance: This information is not available currently as the program only launched in November 2013. Bank Mandiri, owned by the Government of Indonesia, runs the new entrepreneurs by delivering entrepreneurship modules in state and private institutes of higher education, holding workshops and the presenting awards. Young entrepreneurs are supported by entrepreneurship training, coaching and promotion.86 Performance: Since its launch in 2007, the program has supported 15,000 entrepreneurs.87 82 in January 2014 and builds on the “digital districts” venture. It aims to encourage the development of digital start-ups in France, by providing them with digital ecosystems throughout the country. These ecosystems need to reach a critical size and be allocated to the international promotion of these ecosystems. Performance: the French economy.83 Furthermore, the initiative, which focuses on promoting a culture of digital innovation, captures a groundswell in public sentiment on the issue.84 — has stronger economic growth and lower quality jobs for youth. and focus on closing the skills gap and improving employment quality. Awareness Programme — has softer economic growth and lower quality jobs for youth. and focus on closing the skills gap and improving employment quality. — has stronger economic growth and lower quality jobs for youth. and focus on closing the skills gap and improving employment quality. — has softer economic growth and higher quality jobs for youth. and sustain and grow skills-based competitive advantage.
  • 53. 38 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 NSW, an AUD6.7m scheme aimed at backing cutting-edge start-ups that specialize in enabling technologies. It will fund a number of consortia that must consist of three entities: an innovator, an end-user to test the solution, and a partner company that will research or scale the product. Australian Innovation Showcase will provide support via seminars and networking. Performance: Innovate NSW Collaborative Solutions provides grants of up to 25% of project costs (to a maximum of market, B2B solution. — has strong economic growth and higher quality jobs for youth. and sustain/grow competitive advantage. one of youth entrepreneurship’s major successes, is to create tech hubs and encourage the development of tech hubs and other entrepreneurial ecosystems. The success of Tech City in London’s Shoreditch, Berlin’s Silicon Allee, and Moscow’s Skolkovo demonstrate the value of the principle established by Silicon Valley. There is a limit to what local or national governments can do to initiate these movements of individuals, but they can certainly encourage their development as evidenced by programs in France, Brazil and elsewhere. The key recommendation is to encourage and foster hubs, incubators, accelerators and networks to bring relevant talent together and networks to bring relevant talent together. culture of entrepreneurship9 over two years and seeking to generate nearly 6,000 mentorship and job opportunities. The fund focuses on three priority areas: mentorship, seed-stage capital, and — of particular importance in promoting an enterprise culture — high school entrepreneurship outreach. It is provides a number of programs, including: resources and money to start a business; micro-lending for women and accelerator funds that provide investment capital and network support. Performance: The fund was launched in October 2013 and offers young people between 18 and 29 up to CAD25,000 to help them start their own business. — has strong economic growth and higher quality jobs for youth. and sustain/grow competitive advantage. Actions for policymakers: • while they are still in school and at university. Promote through an outreach program. • Promote organizations and environments that will positively • Bring together innovators and commercial organizations to showcase high-tech start-ups. • Launch initiatives to promote a culture of entrepreneurship • associations.
  • 54. 39Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 responsibility, greater freedom.” It targets seven areas that are areas is “Business start-ups and business succession,” which sector by nurturing a strong entrepreneurial spirit. Working together with the private sector, the Ministry has launched “Gründerland Deutschland,” which can be translated as “Germany — a nation of entrepreneurs.” It is intended that to give renewed impetus to German start-ups and entrepreneurship. Performance: Forming part of the annual German 88 Over 1,800 events were held across Germany, in which experienced start-up founders were able to share their knowledge and experience. — has strong economic growth and higher quality jobs for youth. and sustain/grow competitive advantage. execute and coordinate the national policy on entrepreneurship fostering innovation and competitiveness in national and international markets.89 Performance: The government announced that, through the NPI, approximately US$550m will be invested on training over 4,000 Mexican enterprises. — has stronger economic growth and higher quality jobs for youth. and sustain/grow competitive advantage. Germany.info website, http://www.germany.info/Vertretung/usa/en/__pr/P__Wash/2013/11/18-Startup-Week.html, 18 November 2013. Mexico Presidencia de la Republica website,
  • 55. 40 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 Developing an entrepreneurial ecosystem Many of the best practices evident in this report show a combination of groups working together. Governments working together with the private sector, and at times, established entrepreneurs, to improve support for youth and young entrepreneurs. almost every major city, region and country. However, a painful gap exists between public leaders’ new commitment to entrepreneurship and their regions’ abilities to intentionally create programs and processes that will systematically and measurably stimulate entrepreneurial growth. For many of the recommendations and actions to have sustainable impact they need to work as part of a regional ecosystem, and within a regional ecosystem framework that fosters and attracts a critical mass of talent, capital and most importantly entrepreneurial leaders. stimulate and build the foundational components or framework strong policy principles and all the ecosystem components are and a “culture” of interaction and collaboration. Ultimately, a “culture” in the density of interactions and collaboration emerges among a critical mass of leaders and actors that are dynamic, self-regulating and fosters the achievement of entrepreneurs’ aspirational goals. Government plays a key role in bringing together stakeholders to create real dialogue about entrepreneurship and to build coalitions among stakeholder with coordination of funding for a lead organization or consortia of organizations at the national regional and local levels. Many of the recommendations and actions outlined in this report need to be embedded within a regional entrepreneur ecosystem, led or driven by entrepreneurial leaders and catalysts.
  • 56. 41Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 90. Oliver Staley, “Russia teams with MIT on Skolkovo Institute of Science and Technology,” The Washington Post, http://www.washingtonpost.com/business/russia-teams-with-mit-on-skolkovo- institute-of-science-and-technology/2013/05/09/54b31e9c-b5da-11e2-b94c-b684dda07add_story.html, 13 May 2013. 91. Andrii Degeler, “Russian tech hub Skolkovo in 2012 by the numbers: $97m in grants, 750 residents, 49 funds,” TNW blog, http://thenextweb.com/insider/2012/12/17/skolkovos-2012-97m-in-grants-750-residents-49-venture-funds/, 17 December 2012. Skolkovo Innovation Center90 (also known as “Russia’s Silicon Skolkovo near Moscow. The project is similar to the ecosystem, Silicon Valley, in the US, providing end-to-end support for new ventures to develop successfully. The Skolkovo Institute of Science and Technology’s curriculum only offers graduate Finance. It seeks to create tech start-ups and lure corporate research laboratories with tax breaks and relaxed visas and customs regulations. It utilizes the infrastructure, resources and other features of the technology park. Performance: It has successfully backed 750 start-ups. By 201291 it had US$97m in grants, 750 residents and 49 VC funds. It also had created 131 intellectual property items. And had attracted IBM, Microsoft and Siemens to locate to Skolkovo, Key recommendation is to create the foundation for a regional Actions for policymakers: • funding model to support regional entrepreneur ecosystems. • Provide funding for a lead organization or consortia of organizations at the regional level that includes comprehensive entrepreneurship ecosystem indicators. • Provide funding to regional organizations and have them work within a regional alliance model comprised of all colleges and universities; and all levels of government. They operated within a coordination framework and meet on a regular basis. • development for the 21st century. • Collaborate with business to deliver more robust testing of entrepreneurs’ ideas and bring commercially viable opportunities to market. • Identify a short list of key issues challenging G20 countries incentives to attract young entrepreneurs across the G20 to solve these problems. — has softer economic growth and higher quality jobs for youth. performance and sustain and grow skills-based competitive advantage. 10 For many of the recommendations and actions to have sustainable impact they need to work as part of a regional ecosystem, and within a regional ecosystem framework that fosters and attracts a critical mass of talent, capital and most importantly entrepreneurial leaders
  • 57. 42 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 quality jobs for youth. and sustain/grow competitive advantage. Silicon Valley is considered the premier center for innovation motivate themselves by the vision of changing the world, rather than just building a good product.”92 It is a hub for high-tech innovation and development and received 46% of all venture capital investment in the United States in 2012.93 It was formed as a “milieu of innovations by the convergence on one site of new technological knowledge; a large pool of skilled engineers and scientists from major universities in the area; generous funding from an assured market with the the institutional leadership of Stanford University.”94 Performance: It has 35% more serial entrepreneurs, 20% more mentors, and capital raised by companies based in Silicon Valley is 32% higher across all stages of a start-up compared to the global average of all ecosystems.95 It added 46,665 jobs in 2013, an increase of 3.4% over the prior year driven primarily by computer hardware design, information services and the internet industry. Thousands of high- technology companies are headquartered in Silicon Valley, including many Fortune 1000 companies.96 survey-silicon-valley-fourth-quarter-2011.aspx, 15 February 2012. 94. Marvel Castells in Tom Forester, ed., The Information Technology Revolution, MIT Press, 1985, via “Silicon Valley,” wikipedia, http://en.wikipedia.org/wiki/Silicon_Valley#cite_ref-14.
  • 58. 43Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 Israel97 Tel Aviv-Yafo start-up ecosystem Tel Aviv-Yafo is fostering an innovative and accessible start-up ecosystem. The ecosystem includes world-class talent, VC start-up incubators; accelerators and co-working spaces; and informal networking meet-ups and events.98 The hi-tech industry in Tel Aviv-Yafo encompasses more than approximately 23% of all hi-tech companies in Israel. Around 64% of the Israeli hi-tech companies in the city are start-ups. The hi-tech industry in Tel Aviv-Yafo provides employment to around 31,000 people.99 Performance: During 2007-11, 635 Israeli hi-tech companies were opened in Tel Aviv-Yafo. Further, there were 70 exits by Israeli hi-tech companies located in Tel Aviv-Yafo during the same period. The value of these exits amounted to over US$3b.100 99. “Tel Aviv-Yafo - An International Centre of Innovation,” Tel Aviv government website, http://www.tel-aviv.gov.il/TheCity/Documents/Britain-Israel%20Publication.pdf, accessed 3 July 2014; “Tel Aviv: Startup City - Cracking the Innovation Code Work Plan - 2013-2014,” Tel Aviv government, http://startupgrind.com/wp-content/uploads/2013/10/Tel-Aviv-Startup-City.pdf, pages 10, 26, 27.p. 27. 100. “Tel Aviv-Yafo - An International Centre of Innovation,” Tel Aviv government website, http://www.tel-aviv.gov.il/TheCity/Documents/Britain-Israel%20Publication.pdf, accessed 3 July 2014; “Tel Aviv: Startup City - Cracking the Innovation Code Work Plan - 2013-2014,” Tel Aviv government, http://startupgrind.com/wp-content/uploads/2013/10/Tel-Aviv-Startup-City.pdf, pages 10, 26, 27.p. 27.
  • 59. 44 Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 Diagnostic methodology framework for assessing the youth employment challenge in G20 countries, recognizing the different economic conditions and youth employment dynamics from market to market. The aim of the diagnostic is to guide assessment of the type of youth employment challenge for G20 countries. The framework shows the relative position of G20 economies across speed of economic growth — or their capacity to create employment for youth, and across quality jobs for youth — or their ability to provide skilled, secure employment for youth. G20 countries are on speed of economic growth and on quality jobs for youth. In recognizing the differences in context for the youth employment challenge across economies, the objective of the diagnostic is The report presents actionable strategies for these policy recommendations for each quadrant. The diagnostic scores G20 countries on the speed of economic growth and on quality jobs for youth based on the following Organization statistics on youth employment rates and “decent” employment. • • • • • Share of youth unemployment in total unemployment (total • Level of economic vulnerability101 • • • • 101. ”Informal economy,” , http://ilo.org/global/topics/ employment-promotion/informal-economy/lang--en/index.htm, accessed July 2014.
  • 60. Avoiding a lost generation: ten key recommendations to support youth entrepreneurship across the G20 For speed of economic growth and quality jobs for youth, the constituents are normalized on a 1 to 10 scale, using min-max normalization. A score of 10 indicates the strongest result across the G20 group and a score of 1 indicates the softest result. For the speed of economic growth and quality jobs for youth pillars, the constituents are aggregated using a geometric mean, geometric mean is used in place of a regular mean to avoid constituents. Countries are segmented into four quadrants based on their scores for the speed of economic growth and quality jobs for youth metrics. The median score for speed of economic growth performers on each measure. The quadrants are described in Figure 1. It is important to highlight that the scores and model constituents — this is not an “absolute” assessment of performance. quadrant key 1 Stronger economic activity, higher quality jobs for youth 2 Stronger economic activity, softer quality jobs for youth 3 Softer economic activity, softer quality jobs for youth 4 Softer economic activity, higher quality jobs for youth Policy implications quadrant. The high-level differences across quadrants are represented in Figure 2. quadrants and policy implications 1 Sustain economic performance; sustain/grow competitive advantage 2 Sustain economic performance; focus on skills gap and employment quality 3 Improve economic performance; focus on skills gap and employment quality 4 Improve economic performance; sustain/grow competitive advantage for youth Speed of economic growth Youth population Argentina 4.7 5.8 6,765k 3 Australia 6.8 9.8 3,166k 1 Brazil 5.4 8.9 33,399k 2 Canada 7.3 9.0 4,559k 1 China 3.8 8.4 224,437k 2 France 6.9 4.9 7,862k 4 Germany 6.5 7.7 8,975k 1 India 2.4 5.7 231,577k 3 Indonesia 1.9 6.8 41,185k 2 Italy 5.3 3.0 6,069k 3 Japan 8.6 6.5 12,483k 1 Korea, Republic of 6.2 4.0 6,698k 4 Mexico 6.2 7.3 22,224k 1 Russian Federation 6.8 5.7 18,974k 4 Saudi Arabia 2.3 1.6 4,652k 3 South Africa 4.3 1.6 10,011k 3 Turkey 4.5 5.6 12,642k 3 United Kingdom 6.5 7.9 7,927k 1 United States 7.2 7.2 44,168k 1 The scores and quadrants of G20 members 1 Higher growth, higher quality 2 Higher growth, lower quality 3 Lower growth, lower quality 4 Lower growth, higher quality
  • 61. All Rights Reserved. This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice. ey.com | Assurance | Tax | Transactions | Advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. serving the changing needs of high-growth companies. For more than 30 years, we’ve helped many of the world’s most dynamic and ambitious companies grow into market leaders. Whether working with international mid-cap companies or early-stage venture-backed businesses, our professionals draw upon their extensive experience, insight and global resources to help your business succeed. www.ey.com/sgm Maria Pinelli maria.pinelli@ey.com George Atalla george.atalla@ey.com Contacts
  • 62. The promise of digital entrepreneurs Creating 10 million youth jobs in the G20 countries
  • 63. Contents 3 Foreword 7 Executive Summary 13 Chapter 1: Entrepreneurs thrive on digital open innovation 22 Chapter 2: The rise of entrepreneurs that are “born global” 29 Chapter 3: Entrepreneurs can create 10 million new youth jobs in G20 countries 37 Chapter 4: Entrepreneurs expect G20 budding reforms to be amplified 46 About the research 48 Acknowledgements 49 Sources 50 Survey results by country
  • 64. Foreword 3 Foreword Young entrepreneurs are the driving force behind job creation in the G20 countries. Powered by their relentless efforts to innovate and embrace digital technologies, they are committed to achieving strong growth and job creation. Key to their success are the innovation ecosystems shaped by large companies and other “bridgemakers” that help entrepreneurs translate their ideas into marketable products and services, fostered by business-friendly government policies. Indeed, new Accenture research concludes that 10 million more youth jobs could be created in G20 countries if existing barriers to entrepreneurship were lifted. These are among the major findings of this report, “The promise of digital entrepreneurs: creating 10 million youth jobs in the G20 countries” published by Accenture and the G20 Young Entrepreneurs’ Alliance. The report—based on a survey of 1,080 entrepreneurs in all G20 countries as well as workshops, online forums and expert interviews—looks at the critical role that open innovation, globalization and access to skills and talent play in helping entrepreneurs achieve the scale required to create jobs and grow. It also examines the barriers to entrepreneurial success and recommends actions that can help entrepreneurs overcome big challenges. Among the entrepreneurs surveyed, 83 percent believe that innovation, especially technology-fueled innovation, is vital to grow their business and create jobs. For example, SMAC technologies (social, mobility, analytics and cloud) enable entrepreneurs to build new business models, participate in the sharing economy and create solutions that answer critical needs, such as remote health monitoring, at an affordable cost. The research also indicates that today’s young entrepreneurs are “born global.” They believe strongly that global expansion is important to job growth and that digital technologies facilitate such expansion. In fact, 70 percent of entrepreneurs who launched their firms in the past 12 months are already contemplating international expansion. However, as they strive to localize offerings in new markets, entrepreneurs are often faced with a severe shortage of people their business demands. In order to remove barriers to growth, business and government must work together to find solutions. Most public policies are largely fragmented and considered insufficient by the entrepreneurs we surveyed. Only a fourth of the entrepreneurs believe the actions taken by their government to support entrepreneurial innovation and youth job creation are relevant and efficient, and one-fifth believe their government has not done enough to support their international expansion efforts. Pierre Nanterme Chairman & CEO, Accenture Bruno Berthon Managing Director–Accenture Strategy, Cross-Industry Strategy Lead
  • 65. 4 Stepped-up action is required on a number of fronts. Beyond the traditional, yet fundamental, “ask”—increased access to funding, simplification of red tape, increased tax incentives and labor market flexibility—new topics of discussion are emerging that reflect the changing economy. These include: a greater focus on producing science, technology, engineering and math (STEM) graduates; a stronger effort to foster an entrepreneurial culture among young people; a harmonized framework to support the international mobility of data; lending support to the emergence of the sharing economy and of the “social entrepreneur,” and development of international funding networks. Clearly entrepreneurs cannot achieve success by themselves. In order to innovate, globalize and attract the right talent, they need adequate support from regulators, and they need to be part of a vibrant entrepreneurial ecosystem. More than three-quarters of the entrepreneurs we surveyed see open innovation as a key enabler, and they welcome collaboration with large companies, customers, R&D institutes, incubators or accelerators, non-profit organizations and other start-ups. These collaboration partners play a critical role in the innovation process. They are bridgemakers that serve as the conveyor belt between the supply of innovation (entrepreneurs) and the demand for it (customers and governments using it). Accenture is an integral part of the innovation ecosystem. We have created many programs designed to develop and promote innovation, including an open innovation ecosystem with universities, technology partners and clients to accelerate the development of start-ups. We are delighted to partner with the B20, the G20 Young Entrepreneurs’ Alliance and governments to provide inputs and recommendations and to make sure that entrepreneurs are represented in the evolving policy environment. Every large enterprise has an opportunity to become a bridgemaker. The more we can do to foster the growth of our young entrepreneurs, the greater the chances that economic vitality will return to the G20 economies.
  • 66. Foreword 5 In December 2013, Australia assumed the role as Chair of the G20, a position that is surrounded with immense responsibility and complexity, but more importantly, the potential for a significant and enduring positive impact on the world’s future. The priorities under Australia’s G20 chairmanship (sustainable and inclusive growth, employment, investment in infrastructure, trade, driving the commercialization of innovation and increasing the participation of women in the workforce) are all outcomes that result from building ecosystems that create and enable high-growth entrepreneurial small and medium enterprises (SMEs). Investment in SMEs is essential for the G20 to achieve the 2 percent increase in global GDP committed to in 2014. The G20 Young Entrepreneurs’ Alliance (G20 YEA) is a collective of leading entrepreneurship NGOs representing more than 500,000 entrepreneurs across G20 countries and the European Union that have already created an estimated 5 million jobs. In 2014 more than 400 young entrepreneurs and leaders from 37 countries selected to represent the voice of the world’s future business leaders attended the G20 YEA Summit in Sydney from 18th July. It has been very encouraging to see Aaron McNeilly, Sherpa for G20 YEA Australia, leading a positive engagement with The Hon Bruce Bilson, Australia’s Minister for Small Business. We are very pleased to host the Minister at the G20 YEA Summit in representation of the Australian government. We are also very grateful for the positive and encouraging words from Prime Minister The Hon Tony Abbott and the work of the Office of the Prime Minister and Cabinet in assisting and facilitating the G20 YEA’s Government engagement. The G20 YEA is very pleased to assist and build on the acknowledgement of youth and entrepreneurship in the 2013 G20 leaders declaration, B20 human capital taskforce, T20 and Y20 recommendations. We are very encouraged by the commitment of the G20 employment working group to address youth unemployment in their employment plans. We extend heartfelt thanks to Robert Milliner, Mike Callaghan and Holly Ransom for their leadership, guidance and collaboration. We hope to see the relationships with these official engagement groups continue to improve throughout 2014 and into Turkey’s chairing of the G20. We are particularly thankful and excited about the depth, strength and impact of our partnership with Accenture and we hope that this is a long and enduring partnership that continues to create positive impact for many years to come. Jeremy Liddle Entrepreneur & President, G20 YEA Australia
  • 67. 6 Youth unemployment has reached critical level to potentially become a political ticking bomb. Recent reports from international organizations keep highlighting the vital role that the SME sector plays in job creation in the G20 countries, with SMEs being responsible for more than two- thirds of employment in the private sector and providing more than 80 percent of net job growth. It is vital to create the conditions for ‘champions’ to emerge, given that the 5 percent of entrepreneurs who grow the most create over 50 percent of the total number of new jobs created by entrepreneurs. In the G20 Young Entrepreneurs’ Alliance, we passionately believe that entrepreneurs have their say in the youth employment challenge the G20 countries face, both from developed countries and emerging countries. To take full advantage of the benefits entrepreneurship can bring, the G20 governments need to take some decisive action. In order to prepare concrete proposals, the G20 YEA commissioned this report to: • Measure the impact of areas such as trade and globalization, technology innovation and skills and human capital development to trigger growth and foster employment • Pinpoint the barriers entrepreneurs and SMEs face • Identify best practices and provide recommendations for consideration when forming policy and regulations locally to encourage job creation by entrepreneurs We are pleased to present you with the results of this study conducted by Accenture and we hope that the ideas presented here will serve as a guide for government members, policy makers and key opinion leaders to unleash sources of job creation for the youth in the G20 countries. Jean-Louis Grégoire Committee Chair, G20 YEA Partnership and Thought Leaders About the G20 Young Entrepreneurs’ Alliance Summit The G20 Young Entrepreneurs’ Alliance (G20 YEA) is a collective of leading entrepreneurship not-for-profit organizations representing more than 500,000 entrepreneurs across G20 countries who seek to promote youth entrepreneurship as a powerful driver of economic renewal, job creation, innovation and social change. Country members include: Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, South Korea, Saudi Arabia, Turkey, the UK, the US, South Africa, Argentina and the European Union.
  • 68. Executive Summary 7 Executive Summary Young entrepreneurs are the G20 countries’ job creators. According to OECD research1 , young firms (those five years old or younger) generated nearly half of all new jobs created in the past decade, while accounting for only about 20 percent of non-financial business sector employment. During the crisis, most of the jobs destroyed were the result of established businesses downsizing, while net job growth in young firms remained positive. Given the preceding, it’s not surprising that entrepreneurs in 2014 continue to consider themselves a key driver of the economy. Research conducted by Accenture and the G20 Young Entrepreneurs’ Alliance (G20 YEA) found a majority (62 percent) expect to post revenue growth of more than 5 percent, and 85 percent say they are critical to creating jobs for young people in their country. The Accenture–G20 YEA research also discovered the more innovative young entrepreneurs are, the more confident they are in creating jobs. Ninety-one percent of those saying innovation is critical or important to them also plan to create jobs in 2014—compared with 61 percent of those who don’t find innovation critical or important to their business. At the heart of entrepreneurs’ innovation and economic competitiveness lie digital technologies: social media, mobile computing, big data, cloud, “the internet of things” and the like, which most entrepreneurs have enthusiastically embraced. Emerging in the past five years, these technologies are now reaching a critical mass. In the process, they are having a significant impact on businesses in all industries, as companies focus on new ways they can weave these technologies into the next generation of their business strategies. Like their big-company counterparts, most entrepreneurs plan to invest in digital to not only improve the top line by seizing substantial new growth opportunities, but also make their processes more efficient and reduce their operating costs; to a large extent, every young entrepreneur is now a digital entrepreneur.
  • 69. 8 Barriers to scaling limit entrepreneurs’ ability to create more jobs But fulfilling their potential as economic engines and job creators is only possible if entrepreneurs can scale their business to become champions in their industry. Typical scalability challenges cited by entrepreneurs participating in Accenture’s research include the following: • Gaining access to funding. Ideally, sufficient funding is available to generate early-stage growth, but capital needed to grow further remains too limited in most cases. • Perpetuating innovation. While innovation is part of the DNA of the founders of entrepreneurial businesses, scaling distribution and sustaining an innovation mindset as the company grows can be difficult. • Breaking through country borders. Although internationalization is an important driver of scalability, too few start-ups have the tools to effectively expand beyond their home countries, although a majority want to. • Securing the right skills. Having the right talent on board is one of the most critical drivers of start-up growth, but the required skills can differ considerably, depending on a company’s stage of development. Ten million new jobs can be created by fostering vibrant technology- enabled ecosystems (entrepreneurs, large companies and other bridgemakers) and business- friendly government policies The significance of these barriers cannot be overstated. They are some of the biggest obstacles preventing entrepreneurs from having a greater impact on unemployment. In fact, if these and other barriers to growth were removed, Accenture models indicate that entrepreneurs could create approximately 10 million jobs for young people, the most chronically unemployed sector of the G20 active population. The knock-on effects across the economies would be widespread and substantial. In the report for this year’s G20 Summit, Accenture focuses on how to help entrepreneurs fulfill their growth and job- creation potential. The report looks at the role three factors can play in fostering scalability—open innovation, globalization and access to skills and talent. It explores the critical role large companies and other enablers called bridgemakers play in accelerating entrepreneurial growth. And it discusses a set of recommended policy actions that create a more nurturing environment for entrepreneurs and help them achieve their business goals. Source: Accenture Research scenario based on historical ILO Global Employment trends2 UNEMPLOYED YOUTH (MILLIONS) Unemployed youth — million (ILO historical) Unemployed youth — million (ILO forcasts) 2011 26 28 30 32 34 36 38 40 42 44 46 48 44.3 44.3 44.9 31.3 41.8 10M NEW JOBS IF BARRIERS WERE REMOVED If barriers were removed (Accenture estimates, millions) 44.2 2012 2013 2014 2015 2016 2017 The promise of digital entrepreneurs: creating 10 million youth jobs in the G20 countries
  • 70. Entrepreneurs thrive on digital open innovation: partnering with large companies accelerate translating ideas into marketable products According to the Accenture–G20 YEA survey, the vast majority of entrepreneurs believe innovation is critical to their ability to grow and create jobs. However, the survey also revealed that innovation does not flourish in isolation: Entrepreneurs innovate as part of an “open” innovation ecosystem that includes many different parties far outside the walls of the organization. Evidence of entrepreneurs’ “openness” is seen in the extent to which entrepreneurs collaborate with others. Nearly nine in 10 indicated they collaborate with customers to co-create offerings, while between one-half and two-thirds said they collaborate with a variety of organizations—including public institutions or governments, academics or universities, R&D institutes, incubators or accelerators or non-profit organizations (such as foundations). Just under three- quarters said they collaborate with peers or other small businesses or with large companies. These collaboration partners play a critical role in the innovation process: They are “bridgemakers,” serving as the key link between the supply of innovation (entrepreneurs) and the demand for it (customers and governments using it). Business incubators, private or publicly backed, have long been vital resources for start-ups, offering a wide range of resources and helping shape the entrepreneurial ecosystem. Increasingly, however, large companies are realizing the mutual benefits of open innovation and are expanding their role in the entrepreneurial ecosystem. Some have now developed their own accelerator programs to provide venture capital funds, mentoring and access to their marketing and sales resources that can help entrepreneurs translate their ideas into marketable offerings customers can purchase. Indeed, entrepreneurs benefit most when large companies play the role of bridgemaker. Large-scale open innovation is boosted by the rise of new digital technologies, which support participation by a large number of geographically dispersed participants and provide opportunities to create new business models. In fact, every entrepreneur is now a digital entrepreneur and many of them are focusing their innovation efforts on the so-called “sharing economy”: business models that heavily use digital platforms to enable consumers and businesses to actively share and exchange assets, products and services for mutual benefit. The rise of the sharing economy has been driven by an explosion of start-ups and widespread experimentation between large companies and entrepreneurs. While profits thus far for most sharing economy businesses have been limited, sharing- based enterprises have great potential to transform the larger economy across the G20. The new generation of entrepreneurs is “born global”: bridgemakers can accelerate access to local markets In addition to innovation, the Accenture– G20 YEA survey found that entrepreneurs are using globalization to help fuel their growth. International expansion is on the minds of most entrepreneurs surveyed, irrespective of their size. The newer the companies, the more global their mindset: seven in 10 companies launched in the past 12 months already think about global expansion as a source of growth, a much higher proportion than older companies. New technologies are helping make globalization a reality, as they dramatically open up markets, reduce the costs of international expansion and increase the flexibility of operations. Almost three-quarters of surveyed entrepreneurs who plan to expand internationally felt that digital technologies are important to the success of their international expansion. Digital provides a global springboard for entrepreneurs with innovative products and services to access new markets, cross-border financing and global ecosystems. Executive Summary 9
  • 71. 10 Importantly, firms considering international expansion a priority expect faster revenue growth than their locally focused peers and as a result, expect to create more jobs. Interestingly, they typically expect to create more jobs at home than overseas as a result of international expansion: creating jobs at home and abroad is not mutually exclusive; on the contrary, it is a mutually reinforcing virtuous circle in most cases. But the challenges of localizing their offerings in new markets remain significant barriers to success, especially for smaller firms. These challenges include finding the right partner, building sufficient local market knowledge, understanding local regulations, finding local skilled resources, getting access to affordable finance and containing logistics costs. Bridgemakers and, in particular, multinational companies have a key role to play in enabling entrepreneurs to address these challenges—by helping entrepreneurs establish global business relationship, gain access to foreign investment and local distribution capacity, and enhance their overall credibility. Entrepreneurs succeed or fail on talent: skills shortage hits entrepreneurs hard A third key lever in the success of entrepreneurial ventures is talent. Yet according to the Accenture–G20 YEA survey, a number of barriers make it difficult for entrepreneurs to hire as strongly as they could, which in turn is preventing entrepreneurs from doing more to spur employment across the G20. Whether the firm is large or small, availability of appropriate skills is the single biggest barrier to recruiting more young people. Six in 10 entrepreneurs said difficulty accessing the right talent was one of their top three recruiting concerns. In addition, 78 percent said they have challenges recruiting the right skills in their development. The scarcity of talent was felt by entrepreneurs in both manufacturing and services, as well as firms both young and old. More than half of entrepreneurs also highlighted the relative costs for them to hire and train young people—a cost they often find difficult to afford when scaling their business—and they cited the lack of incentives targeted at hiring young people as an impediment to growth. Labor market inflexibility and government regulations and compliance requirements were also seen as barriers to hiring by 48 percent and 43 percent of entrepreneurs, respectively. To be sure, some entrepreneurs find ways to overcome these barriers and grow in spite of them. But many more do not, which means many jobs are never created. However, if the three groups of main stakeholders (entrepreneurs, large companies and other bridgemakers), enabled by governments, can develop coordinated actions at scale, entrepreneurs will generate significantly more jobs than they would if they are left to develop their businesses on their own. Accenture research and analysis shows that this “3+1” virtuous circle could help entrepreneurs create 10 million new youth jobs2 , which would reduce youth unemployment from 13 percent to 10 percent.3
  • 72. Policy and regulatory issues also pose challenges: entrepreneurs expect budding G20 reforms to be amplified Entrepreneurs believe governments can play a major role in helping to eliminate barriers to starting and scaling businesses. Governments themselves agree. Many have taken steps to provide stronger support to entrepreneurs, enacting policies designed to help start- ups get funding, expand globally, take advantage of the digital infrastructure and find and hire innovative talent. But while welcome, those initiatives are far from sufficient in the eyes of entrepreneurs. Only about one-fourth of all entrepreneurs surveyed think that actions taken by their government to support entrepreneurial innovation are relevant and efficient; one-fifth feel that their government has done enough to support their international expansion; and one-fourth consider the actions taken by their government to support youth job creation as relevant and efficient. Entrepreneurs surveyed believe governments have significant opportunities to improve their performance in these three areas, and cited numerous actions they would like to see governments take to help them succeed. For instance, they said governments can substantially boost entrepreneurial open innovation by: • Simplifying regulations • Developing tax incentives to encourage open innovation • Opening public procurement to small businesses • Helping entrepreneurs access funding at various stages in their lifecycle • Encouraging systemic approaches that enable entrepreneurs, large businesses, bridgemakers, and government to foster open innovation and youth job creation at the local level They think governments can foster global expansion of entrepreneurial companies through: • New global trade agreements • Boost international financing • Programs that facilitate mobility of talent across borders • Initiatives that encourage the creation of communities or clusters of entrepreneurs across the G20 And they believe governments can help them create more jobs via a variety of efforts—including those that: • Support vocational training and apprenticeship • Produce more science, technology, engineering and mathematics (STEM) graduates • Increase general labor market flexibility • Foster an entrepreneurial culture among younger people • Encourage development of more agile types of working environment and forms of employment • Facilitate development of new categories of companies focused on social outcomes as much as on economic and financial ones As a key stakeholder in the G20 economy, governments must do all they can to make it easier for entrepreneurs to create viable businesses and grow them in concert with market demands. When they do, everybody wins. Executive Summary 11
  • 73. 12 Conclusion The economic challenges facing the G20 are indeed formidable. Businesses and governments alike must find ways to remove the barriers to generating stronger, sustained growth and reducing youth unemployment. Entrepreneurs represent a promising, potentially landscape-altering, solution. Historically the engines of economic growth, entrepreneurial businesses can help restore vitality to G20 economies by unleashing innovative products and services that can stimulate demand. In the process, as they grow and scale at speed, thanks to the possibilities offered by the digital transformation of economies, they can create millions of jobs—especially for young people. But they cannot do it alone. To have the most success—and, by extension, the greatest positive impact on the economy—entrepreneurs need the help of other influential entities. In particular, they need large companies that can help them accelerate their innovation efforts, bridgemakers that can help connect their new ideas with customers, and governments that can create a more supportive and nurturing policy environment for fledgling and growing new businesses. Working together, entrepreneurs, large companies, other bridgemakers and governments can provide the momentum the G20 needs to restore economic growth and put people back to work. Definitions Innovation Innovation is defined in the Oslo Manual as including product innovation, process innovation, marketing innovation and organizational innovation. Innovation is interpreted by Accenture as “a new way of doing things that adds value” in the fields listed above. Entrepreneurs Entrepreneurs are defined by the OECD-Eurostat Entrepreneurship Indicators Program as those persons (business owners) who seek to generate value, through the creation or expansion of economic activity, by identifying and exploiting new products, processes or markets. In this report, the focus is on “employer enterprises,” which are more closely related to the notion of entrepreneurship as a driver of job creation and innovation than micro enterprises (those that provide some form of subsistence to the owner, usually self employed and without employees). Youth unemployment The International Labor Organization defines youth unemployment rate as the number of unemployed youth (typically those 15 to 24 years old) divided by the youth labor force (employment + unemployment). Specifically, the unemployment rate is a measure of the inability of an economy to generate employment for those persons who are not employed but are available and actively seeking work.
  • 74. Chapter 1: Entrepreneurs thrive on digital open innovation “Innovation is not only in the entrepreneurs’ culture, it is the primary force underpinning company creation. What is at stake is to maintain creativity in the long run.” — François Bieber, CEO, Kwanko Innovation is critical to the long-term success of any business. Without a steady stream of new ideas, enterprises risk being passed by and eventually may face difficulties in growing. Innovation boosts a company’s top line by increasing competitive advantage and customer satisfaction and diminishing the chance of disruption by more forward-thinking companies. Operationally, innovation helps enhance the bottom line by increasing efficiencies that save time and money. But beyond being an engine of profitable growth for companies, innovation benefits the larger community. It plays an important role in increasing the vitality of an industry and society by creating jobs and raising the standard of living. Open Innovation—facilitated by digital technologies—is the fuel for entrepreneurs’ growth Perhaps nowhere is innovation more critical than in the entrepreneurial world. Innovation is the driving force for entrepreneurs, who view innovation as critical to their ability to grow and create jobs. Indeed, in Accenture’s survey of entrepreneurs across G20 countries, 83 percent said innovation is vital to grow their business and create jobs. More than 70 percent leverage or plan to leverage mobile technologies (73 percent) or social media technologies (72 percent) to develop their business and more than 60 percent do the same with data analytics (64 percent), cloud technologies (60 percent) or the Internet of Things (62 percent). To a large extent, every entrepreneur is a digital entrepreneur4 . Increasingly, innovation as practiced by entrepreneurs is largely collaborative and open in nature. Seventy-six percent of entrepreneurs surveyed by Accenture see open innovation as an enabler of innovation in their business (Figure 1). Interestingly, those who consider that open innovation is a major enabler of innovation are also enjoying higher revenue growth than the rest of entrepreneurs. This sentiment reflects the broader evolution of innovation—from structured and closed to something very entrepreneurial that extends far outside the walls of the organization. 34% 42% 24% 76% Open innovation is an enabler but not a major one Open innovation is a major enabler of innovation in my business Open innovation is not an enabler of innovation in my business Sample base = All respondents (N=1,080) Create new jobs in 2014 Increase in revenue growth 89% 91% Create new jobs in 2014 Increase in revenue growth 39% 54% Chapter 1: Entrepreneurs thrive on digital open innovation 13 Figure 1: Entrepreneurs who embrace Open Innovation create more jobs
  • 75. 14 For decades, innovation was primarily the domain of big institutions: governments, formal labs and large corporations. However, as technology evolved and speed became more critical, companies began involving more parties in their innovation efforts—a shift that became known as “open innovation,” the term coined by Henry Chesbrough in 2003. “The prevailing logic was … if you want something done, do it yourself,” Chesbrough said in 2011. “This logic of open innovation turns that completely on its head. Competitive advantage now comes from having more people working with you than with anyone else.”5 Large-scale open innovation is now possible because the technology, especially social media and the cloud, exists to support participation by a large number of geographically dispersed participants. Such technologies also allow entrepreneurs to test multiple forms of collaboration involving a wide range of players. As shown in Figure 2, the largest percentage of participants in the Accenture survey (86 percent) indicated they collaborate with customers to co-create offerings, while between one-half and two-thirds said they collaborate with a variety of organizations—including public institutions or governments, academics or universities, R&D institutes, incubators or accelerators or non-profit organizations (such as foundations). Just under three- quarters said they collaborate with peers or other small businesses or with large companies. In a workshop with entrepreneurs in Bangalore, the concept of the “angel customer” emerged as an especially important party with which entrepreneurs can collaborate. “People generally speak of angel investors, but it’s very difficult to get the angel customer,” said one participant. “You can also call him a risk-taking customer because he is experimenting with you. Customers who can actually, even if you only have a prototype, take it to a level where they help you, they work with you.” Figure 2: Entrepreneurs collaborate with a large variety of partners to innovate 47 %39%14% 30%43%27% 29%43%28% 28%40%32% 26%40%34% 21%43%36% 23%37%40% 21%34%45% Customers (E.g., co-creation) Peers / Other SMEs Large companies Academics / Universities, etc. Public Institutions / Government Non-profit organizations (e.g., foundations) R&D institutes Incubators / Accelerators Key partner for innovation Some experience of collaboration No experience of collaboration Sample base = All respondents (N=1,080)
  • 76. Chapter 1: Entrepreneurs thrive on digital open innovation 15 Bridgemakers—especially large companies—play a critical role in today’s open innovation ecosystem One of the hallmarks of open innovation is the ecosystem that develops to foster and support ongoing efforts to conceptualize, develop and commercialize new ideas. This ecosystem, which is illustrated by the framework on page 16, encompasses three key parties: those that demand innovation, those that supply it and the parties that link the two groups, called the “bridgemakers.” Bridgemakers play a critical role in today’s open innovation ecosystem: they connect innovation supply with demand to help entrepreneurs take a promising idea from concept to reality. Two types of bridgemakers—business incubators/ accelerators (see page 17) and large companies—are especially important in helping entrepreneurs translate their ideas into marketable offerings that customers can purchase. Large companies, in particular, are extending their partnerships with entrepreneurs to accelerate impact. Many continue to collaborate with entrepreneurs on innovation. For instance, 29 percent of entrepreneurs surveyed said large companies are key partners for innovation and another 43 percent have some experience of collaborating with large companies. For large corporations, collaboration on open innovation efforts can provide greater access to new technologies and highly skilled talent and decrease the cost of R&D. In the process, it helps boost competitive advantage and lower the risk of being disrupted. For start-ups, advantages include access to greater production and distribution scale, as well as finance, mentoring, potential “charter clients” and more robust marketing and sales resources, including additional credibility. It also gives start-ups a connection to established brand names with market recognition and massive potential for increased revenue generated due to an influx of new and diverse ideas. Procter & Gamble is well known for its leadership in open innovation.7 However, other major companies across industries increasingly are providing entrepreneurs with opportunities to collaborate on innovation. For instance, General Electric hosts an “Ecomagination Challenge” and “Healthymagination Challenge,” open innovation platforms that collect ideas for new projects from any potential partner, including individuals and small enterprises. Philips’ open innovation program draws on the capacities of individuals, organizations and even small start-ups from around the globe to gain new insights and access to new technologies. Arla Foods collaborates closely with universities, particularly many of the schools their researchers come from, by awarding young scientists at these schools an opportunity to get “pre- competitive knowledge” that can prepare them for their jobs after graduation. And Danone Baby Nutrition focuses on finding partners that can bring relevant solutions to a pressing consumer need increase convenience to the consumer, differentiation and competitive advantage.8 Some corporations are going even further in their efforts to partner with entrepreneurs by leading or participating in an accelerator program (see page 19).
  • 77. 16 Demand The demand side of the innovation equation includes the groups that require a constant, fresh supply of innovation. While interest in the “new and improved” has always been high, demand for innovation arguably has never been greater among the two primary groups that benefit from it: consumers, who are looking for new products and services from companies to improve their lives; and governments, which are seeking ways to help move society forward through economic growth and job creation and serve their constituents better through the use of innovative technologies and practices. Supply On the supply side are the entities and people responsible for developing innovations that meet the needs of the market. Supply of innovation is no longer limited to “ivory tower institutions”—labs, universities and corporate R&D units, although those remain powerful suppliers of innovation. It now can come from many different sources. In fact, the supply side of the innovation marketplace has never been more varied or more vibrant. Traditionally defined entrepreneurs and start-ups are major innovation suppliers, as are universities and companies that employ teams of people to pursue promising new ideas. Today, with the growing use of open innovation, individuals themselves, acting as a customer, citizen or student, also can be a significant source of innovation. Bridgemakers Bridgemakers are the vehicles that facilitate the transfer of innovation from the creative side to consumption side; in other words, they help bring ideas to market. There are many different types of bridgemakers across the innovation spectrum: • Traditional venture capitalists (VCs) may provide funding to help get start-ups off the ground. • Non-government organizations (NGOs) also can be powerful catalysts for innovation, forging relationships between the public and private sectors to advance a particular goal. • Foundations increasingly are playing a more active role in fostering innovation— moving from simply providing funding in support of innovation and entrepreneurship to making broader commitments to doing hands-on work on innovation-related initiatives. • Universities increasingly are complementing their role as a supplier of innovation with bridgemaking assistance in the form of various programs. • Business incubators and accelerators have both become vital resources for start-ups. They offer a wide range of resources, such as office space, professional services and business advice, and hands-on assistance that entrepreneurs need to succeed. • Corporations have broadened their role from simply a supplier of innovation to bridgemaker. They can play different roles from traditional corporate funding to participant or leader of an accelerator program. ENTREPRENEURS • High risk • High change velocity • Delayed economic value • Seek disruption THE NEW BRIDGEMAKERS • Corporations • Global reach and distribution • Access to local talent and skills • Economies of scale INNOVATION SUPPLY BRIDGEMAKERS INNOVATION DEMAND • Labs • Universities • Corporate R&D • Start-ups/entrepreneurs • Individuals (customers, citizens, students) • Venture Capitalists • NGOs • Foundations • Universities • Incubators/accelerators • Corporations • Customers (consumers and businesses) • Governments CAPITAL RESOURCES EXPERTISE The framework for capitalizing on open innovation: bridgemakers connect supply with demand
  • 78. Incubators/accelerators endure as vital resources for entrepreneurs Business incubators/accelerators have long become vital resources for start-ups. They offer a wide range of resources such as office space, professional services and business advice, and hands-on assistance that entrepreneurs need to succeed. In some cases, they may act as early-stage investors by taking a small financial stake in the companies they are helping. One example of an accelerator is RocketSpace, based in San Francisco, which provides technology co-working spaces that connect tech start-ups, global brands and entrepreneurs through innovative community and accelerator programs. As Scott Armanini from RocketSpace said, “In order to achieve mass-market acceptance, start-ups need to be well connected to corporations. Corporations have millions or tens of millions of customers that these start-ups need in order to get validation, get that level of traction. Our role is to help them connect with global brands, members of our corporate innovation program who can then help them with that mass-market adoption. And so we’re working on consulting partnerships between start-ups and the global brands to make that magic happen.” Another example, Singularity University, is a hybrid accelerator: a school, a fund and future model of innovation. Singularity is an unaccredited university in Silicon Valley that “provides educational programs, innovative partnerships and a start-up accelerator to help individuals, businesses, institutions, investors, NGOs and governments understand cutting-edge technologies, and how to utilize these technologies to positively impact billions of people.”6 In developed markets, the benefits of such incubators/accelerators is well documented. In emerging markets, where institutional voids often prevent economic growth, they also play a very critical role in shaping the entrepreneurial ecosystem. That’s the outlook from Rajesh Sawhney, founder of GSF Accelerators, the Indian start-up accelerator behind Little Eye Labs, which was acquired by Facebook in early 2014. ”I think in a globally connected world it’s important that equal opportunities are provided to talent across the world to create change, especially the changes that affect a large part of humanity,” Sawhney said. “That’s the mission we have at GSF. We want to provide talented, innovative technology start-ups not just from India but from an emerging world with the same opportunities that start-ups have in Silicon Valley and elsewhere. I think that will be the biggest homogenizing change in a connected world powered through technology.” Chapter 1: Entrepreneurs thrive on digital open innovation 17
  • 79. 18 These company-led accelerators rarely provide funding but, rather focus on mentoring, providing access to a network, co-designing products and co-selling. Purchase of the start-up by the larger company is not necessarily part of the initial ambition of these accelerators, although it may be part of the outcome. Another distinctive feature of these accelerators is their international dimension: They provide access to a global network of accelerators that is highly valued by entrepreneurs. Companies such as SAP and Unilever have established independent venture organizations that provide entrepreneurs with capital, as well as access to resources and expertise of the parent company, to help promising businesses scale and grow. Such venture organizations can play a key role, especially in emerging markets. “What [India] suffers from is the lack of exits,” explained Parag Dhol of Inventus Capital Partners, an India venture capital firm. “The venture capitalist ecosystem, angel ecosystem, is crying for exits. While exits can happen through IPO and secondary sales (to other larger VC/private equity funds), strategic sales would be a significant portion of overall exits. The only way these strategic sales can happen is when large companies interact and partner with some of these smaller companies and consequently do M&A activity for start-ups.” Although there is no “best” collaboration model, it appears that entrepreneurs benefit most when large companies play the role of bridgemaker in a truly holistic way. “Larger companies and start-ups are interdependent,” noted Apurva Shetty, co– founder and COO of Sensegiz, an innovative entrepreneur in the wearable technology space. “If we have to grow in this digital world, we have to walk hand-in-hand to save time and reach the market in time because it is a global marketplace.” This means going beyond mere funding and addressing several dimensions of the relationship, including a clear commitment to mentorship at a senior management level and alignment with the large corporation’s strategic agenda.
  • 80. Chapter 1: Entrepreneurs thrive on digital open innovation 19 Corporation-led accelerators are gaining prominence Target, the US-based retailer, chose India as the first country to kick off its global accelerator program, where it has selected a few start-ups.9 Target is backing start-ups that are focused on the five themes relevant to Target’s business: search, personalization, data, social and mobile. Coca-Cola, as well, has unveiled accelerators in Sydney and San Francisco as part of its own nine-city accelerator program.10 The objective is to co-design and build new products and services and with start-ups and bring them the ability to scale businesses at the global level. Microsoft Ventures, also launched in 2013, counts several accelerators worldwide and offers workshops on customer development, branding and strategy, as well as the chance to meet venture capital investors, angels and other entrepreneurs.11
  • 81. 20 The exponential growth of the “sharing economy” illustrates the momentum of digital open innovation across the globe In the past few years the entrepreneurial world has seen the explosion of start-ups with an innovative business in the so- called sharing economy. Although it lacks a common definition,12 the sharing economy generally includes three key elements: passive consumers turned into active ones (“prosumers”), the disintermediation of the middle man and new technologies unlocking the value of under-utilized assets. The impact of the sharing economy on the global economy is already being felt (Figure 3). Forbes estimates that $3.5 billion in revenue will have flowed through the sharing economy as a whole in 201313 and the exponential growth in the sharing economy can be seen in a variety of areas. In the lodging industry, pioneer AirBnB reached the 10 million customer mark in December 2013, just six years after its launch—much faster than it took for well-known hotel brands to do the same. Blablacar has now topped 6 million users. In the food-service sector, the online marketplace Shareyourmeal, founded in 2012, provides “home cooks” with the opportunity to sell their home-cooked meals to interested neighbors. Shareyourmeal’s pool of users is growing at a rate of 60 to 120 members per day, with more than 35,000 users in the Netherlands and 8,000 in Belgium.14 Furthermore, money raised through crowd-funding platforms in 2013 was expected to double, reaching $5.1 billion.15 This represents approximately one-sixth of venture capitalists’ investment, which only grew by 7 percent in 2013.16 Kickstarter, one of the major crowdfunding platforms, has reached $1 billion in total dollars pledged to Kickstarter projects by more than 6 million backers. Figure 3: The exponential growth of the sharing economy: an illustration through AirBnB, Blablacar and Kickstarter Unit: million of users Source: Accenture Research analysis based on public information 2006 2007 2008 2009 2010 2011 2012 2013 2014 16 14 12 10 8 6 4 2 0 AirBnB Blablacar Kickstarter SIZE OF SHARING ECONOMY IN 2013 $3,5BN
  • 82. The phenomenon is spreading across the world, from the US to Europe and Asia. In India, more than a dozen crowdfunding platforms have sprung up in the past year to 18 months, riding the rising wave of entrepreneurship and the internet to become magnets for people looking for money—and those willing to donate for a cause. Initiatives in the arts and social causes, as well as technology start-ups seeking funding and even projects at university labs, are all flocking to these platforms. New business models also attract large companies, which can develop collaborative arrangements with entrepreneurs in the emerging sharing economy. For example, General Electric is teaming up with Quirky, a well-funded start-up for crowdsourced inventions, to create a platform that enables consumers to control all of their internet-connected devices. Dubbed Wink, the app is being positioned as a “command center” that “makes sure all of [consumers’] connected things work with all of their other connected things,” explained Quirky CEO and Founder Ben Kaufman. “With GE’s scale and Quirky’s speed, we have the ability to connect a lot of things super quickly.”17 Another example is the relationship between eBay and Patagonia, known as the Common Threads Partnership, which operates a marketplace for the outdoor clothing maker’s used jackets, fleeces and other gear. Rather than buying new Patagonia goods, eBay users can buy and sell old Patagonia products to each other. The Common Threads Partnership launched in 2012 in the US, where it now has 60,000 members selling more than 53,000 items. The two companies launched a similar program in London in 2014, establishing its presence in Europe.18 There are, however, still many unanswered questions when it comes to how the sharing economy will affect established markets and companies and what existing enterprises should do in response. Some, like Jeremy Rifkin, think the sharing economy illustrates a paradigm shift in which new internet platforms open opportunities for a new generation to think of themselves as “social entrepreneurs.” For these people, he said, “being both entrepreneurial and social is no longer an oxymoron but rather, a tautology.”19 Others highlight that business models are still being tested and refined to ensure long-term viability: more and more entrepreneurs are moving away from the all-free business model to a “freemium” or, more frequently, a service fee platform business model. In the service fee platform business model, the company gets compensated for successfully matching two parties: buyers and sellers, hosts and guests, borrowers and lenders. The fee taken varies across marketplaces—from 5 percent to 40 percent, depending on the value of the transaction and the services offered. Despite the uncertainty around regulations and around which business models will eventually succeed, the trend seems large and strong enough to ensure some sustained successes. Companies that might think the sharing economy is a passing fad risk suffering the same fate as the retailers that refused to believe people wanted to purchase things online a decade ago. As entrepreneurs participating in the Accenture survey indicated, innovation— and especially open innovation—is vital to their success. Countries that are able to create an environment that nurtures and supports entrepreneurial innovation— especially in the area of the sharing economy—will be better positioned to create jobs, restore growth and enhance the overall quality of life for their citizens. Chapter 1: Entrepreneurs thrive on digital open innovation 21
  • 83. 22 Chapter 2: The rise of entrepreneurs that are “born global” Innovation clearly is critical to entrepreneurs’ ability to grow and create jobs. Many of these entrepreneurs see opportunities to bring innovation to customers outside of their home markets and these individuals expect their firms to grow even faster and create more jobs than those whose sights are set primarily on their local market. Yet firms, especially small ones, face considerable barriers to expanding abroad—barriers that bridgemakers can help entrepreneurs overcome. International expansion is on the minds of most entrepreneurs Overall, six in 10 entrepreneurs surveyed indicated international expansion is a key priority for their business (Figure 4). One might expect larger firms to be likely to hold that view and that is indeed what Accenture found in its survey: more than 75 percent of larger firms (those with 100 to 250 employees) considered international expansion important to growing their business and creating jobs. What was remarkable was that a similar percentage (76 percent) of smaller firms (with 10 to 99 employees) had the same aspirations. While smaller firms certainly face more challenges in expanding outside their home markets than their larger counterparts do, it is worth noting that smaller firms are thinking seriously about targeting overseas markets. One of the reasons so many entrepreneurial firms of all sizes are looking outside their home markets is better revenue growth opportunities: firms that considered international expansion a priority expect faster revenue growth than their locally focused peers. Accenture’s survey showed that of the entrepreneurs who expected hyper revenue growth in 2014 (that is, greater than 15 percent), a vast majority (73 percent) also considered international expansion as either critical or important to growing their business. On the contrary, the majority of firms (66 percent) that expected revenues in 2014 to decrease or remain stable considered international expansion as not very important or not important at all. Figure 4: Sixty percent of entrepreneurs believe international expansion is important Importance of international expansion to grow business and create jobs 14% 22% 46% 18% 60% Critical Important Not very important Not important at all Sample base = All respondents (N=1,080)
  • 84. Interestingly, the tenure of the firm—how long it had been in business before deciding to expand outside its home markets—is not directly correlated to a desire for global expansion. In fact, surprisingly, a very high proportion (70 percent) of younger firms—those launched in the past 12 months—are already thinking of international expansion. These are the “born global” entrepreneurs. Conversely, a smaller percentage (only 49 percent) of firms that are more than 10 years old considered international expansion as important to growing their business (Figure 5). These results indicate that the new generation of entrepreneurs thinks much more globally than their predecessors. This is especially true for entrepreneurs in the sharing economy, where achieving critical mass and being the first entrant is a primary criteria of success and viability (as is the case in similar “winner take all” markets, where the value of the network is a predominant value creation factor). Internationalization increases the size of their addressable market, reduces revenue source risks and increases the value of their firms.20 Accenture’s survey also revealed that going global can have a huge impact on a firm’s job-creation potential. Firms with international activity were more likely to expect to create jobs than firms that were primarily locally focused. Importantly, international expansion does not mean jobs will be created only in overseas markets. On the contrary, more of these new jobs would be created at home: more than 80 percent of these firms expected to increase the workforce in their home country at a faster pace than the workforce outside the home country. Figure 5: New entrepreneurs are born global The percentage of entrepreneurs saying that international expansion is important or critical to grow business and create jobs—by age of firm 70% 63% 49% LESS THAN 1 YEAR OLD LESS THAN 5 YEARS OLD 10 YEARS OLD Chapter 2: The rise of entrepreneurs that are “born global” 23
  • 85. 24 Digital technologies open up markets and dramatically reduce the costs of international expansion More and more, entrepreneurs are taking advantage of digital technologies to help them achieve their global expansion goals. Indeed, digital provides a global springboard for entrepreneurs with innovative products and solutions to launch themselves in the world’s leading markets. It not only offers access to cross-border financing, but also a deep immersion into global ecosystems. Almost three-quarters of entrepreneurs in the Accenture survey felt that digital technologies were important to the success of their international expansion (Figure 6). Firms now can access digital technologies and are leveraging them in international expansion—for example, to create virtual offices, digitalize key business processes and engage in e-commerce at scale and at speed. As an entrepreneur from the UK put it, “Mobile technologies, cloud technology, email, instant messaging, videoconferencing, etc., have ensured that we can disseminate information on any facet of our business to all four corners of the globe instantaneously. Business decisions can be made there and then, resulting in cost savings and the ability to capitalize on opportunities. The importance of technology can never be underestimated.” However, while digital technologies are in many ways the key enabler of entrepreneurs’ global expansion and provide entirely new opportunities, the current paradox is that the mobility of data across national boundaries is often more difficult than the mobility of goods or services. Considerable obstacles can impede progress and partially inhibit crucial innovation and revenue growth (see page 25). “New technologies have opened up the markets and completely sped up internationalization.” Jenny Tooth, Chief Executive of UK Business Angels Association Figure 6: Digital technologies are critical to the success of international expansion Importance of digital technologies in the success of your international expansion 20% 20% 53% 7% 73% Critical Important Not very important Not important at all Sample base = All respondents (N=1,080)
  • 86. Chapter 2: The rise of entrepreneurs that are “born global” 25 The mobility of data: what is at stake? The digital universe is doubling every two years and is expected to grow to 40 trillion gigabytes—more than 5,200 gigabytes for every man, woman and child—in 2020. To truly unlock the value of data, companies need to start treating data as a supply chain, enabling it to flow easily and usefully through the entire organization and throughout each company’s ecosystem of partners, at the country and at the international level.21 Data are the core of many “born global” entrepreneurs’ business models and, therefore, regulations of international data flows will have a critical impact on their development and ability to create jobs. Data regulations are generally not anchored on a common global standard and are often outdated. In today’s globalized and data-driven world, traditional regulatory approaches are being challenged as the evolution of technology outpaces the regulatory response. Consider the adoption of cloud computing in the EU. The current regulatory framework—particularly regarding data protection— poses several barriers for both cloud users and providers. A lack of harmonized requirements across the EU means that cloud users—and by extension, their cloud services providers—are subject to many country-specific data protection and data security obligations, with many countries placing restrictions on data location. The associated compliance and liability concerns mean that the cloud market in the EU is not reaching its full potential or scale, thus limiting the benefits of cloud, including lower IT costs and flexibility in IT usage, greater speed and the ability to fully leverage new and innovative technologies and services.
  • 87. 26 Yet significant challenges to global expansion remain As attractive and promising as international expansion is, entrepreneurs still face major challenges in supporting it. According to the Accenture survey, several challenges are particularly prevalent (Figure 7): logistics costs, finding local partners, access to finance and lack of local market knowledge to identify opportunities. Contrary to some expectations, the global Internet village is not becoming flatter for many companies, hence the need to understand and adapt offerings to the diversity of contexts.22 Ability to handle logistics at scale This was ranked as the number-one concern by entrepreneurs across geographies, in mature and emerging markets, but especially by smaller firms. Of the firms ranking this as their top concern, most were either small or micro firms. These concerns are understandable. Overseas customers often demand strong proof of concept at home and smaller entrepreneurs often have to furnish high- profile endorsements from established local customers, whether from the private or public sector. Entrepreneurs can therefore struggle to build trust with overseas prospects. In Accenture’s interview with TechStars, the company’s CEO Jon Bradford echoed this point: “Start-ups often underestimate how hard it is to globalize and the importance of their local market,” he explained. “Start-ups have an inherent advantage in their local markets and are ordinarily less competitive at the international level.” Figure 7: Main obstacles faced by entrepreneurs in their international expansion 35% Challenges to find local partners-alliances Sample base = All planning to expand internationally TOP TEN OBSTACLES 32% Access to international finance-funding 32% Lack of sufficient local market knowledge to identify opportunities 28%Specific local regulations 27%Trade barriers 27% Cultural differences (especially in negotiations) 27% Finding local skilled resources to support the local–regional markets 20% Foreign direct investment restrictions 19%Concerns on intellectual property 37%Logistics costs
  • 88. Finding the right partners and talent abroad and developing local markets insights Among entrepreneurs planning to expand internationally, challenges in finding local partners and talent abroad was the second most frequently identified key challenge, often combined with the lack of sufficient local market knowledge to identify opportunities. This was especially true of smaller firms: Forty-nine percent of the firms that struggled in this area were micro firms (fewer than 10 employees) and 40 percent were small (10 to 99 employees). This was again true across geographies, suggesting the potential need for better cross-country partnerships enabled by appropriate policies. Entrepreneurs need help to develop specific foreign-market knowledge, learn how to position their own internal capabilities and assess whether or not investments made in one region can easily be deployed in other regions. “The main obstacle we face is the lack of knowledge of foreign markets due to the fact that they evolve continuously and spontaneously and only companies on the ground can know the true internal dynamics,” noted one entrepreneur in France.”23 The value of local partners’ knowledge is reinforced by the experience of another entrepreneur, this one in the apparel business, who collaborated with local experts with knowledge of specific global markets. “Without the assistance of these experts, we would have faced insurmountable difficulties in gaining a foothold in these markets,” the entrepreneur explained. “As the scope of our company changes, there may be a greater need for such workers employed, especially in foreign markets in the future.”24 Access to international finance and funding A third key international expansion challenge is gaining access to funding, although this was deemed a bigger issue by entrepreneurs in Latin America, Asia and Africa than in North America or Europe. And funding challenges are not limited to younger firms. In fact, of the firms ranking access to funding as their number-one concern, less than half (45 percent) had launched in the past three years. The majority of firms (55 percent) facing this problem have been in business for more than three years. To be sure, there are very few incentives for investors to co-invest across borders. Emphasizing the challenge was the observation from one entrepreneur, who lamented the lack of international partners who “do not want to risk investing in a foreign market because they do not know if they are going to have a real return on investment.”25 Chapter 2: The rise of entrepreneurs that are “born global” 27
  • 89. 28 Multinational companies are key bridgemakers to accelerate entrepreneurs’ international expansion As described in chapter 1, bridgemakers provide the critical link between innovation supply and demand. But they also can play a valuable role in helping entrepreneurs establish international business relationships. Whether they are large corporations, cross-country business accelerators, trade bodies or international networks of VCs, these bridgemakers can help entrepreneurs launch new products in target markets and increase credibility by connecting entrepreneurs with peers, mentors and potential long-term advisors from around the world. They can also involve entrepreneurs in high-profile activities related to foreign investment and even help entrepreneurs gain vital endorsements from established companies. One example of such bridgemaking is the increasing development of partnerships between multinationals and smaller start- ups to leverage digital technologies in overseas expansion. As large companies grow, they sometimes lose the ability to stay on top of cutting-edge innovation. By teaming with start-ups, they can take advantage of these firms’ nimbleness and innovation to make forays into newer regions, using newer digital channels. Unilever recently declared it would back seven innovative digital companies as part of its “Go Global” program. Unilever will give each company funding, mentorship and a range of services in exchange for a customized digital marketing pilot for its brands, covering the areas of content, mobile or connected devices. The campaigns will go live across Africa, Asia, Europe and North America.26 Unilever’s approach reflects a broader focus among larger firms on finding more innovative technology solutions from start-up ecosystems across the world. For example, the chief information officers (CIOs) of top global companies such as Colgate-Palmolive Co., Procter & Gamble Co. (P&G) and Citigroup Inc. convened in India recently to explore the possibility of doing business with the country’s fledgling software product ecosystem—the first such concerted initiative. For these large companies that are looking to expand in markets like India and China, it makes sense to consider some of the innovative solutions that are emerging from the ecosystems in such countries. In addition, multinational companies, including Microsoft and Google, are setting up a global constellation of accelerators in such cities as Paris, Beijing, Bangalore and Tel Aviv to help entrepreneurs bring their innovations to a global audience. Another notable effort designed to support entrepreneurs’ global expansion is Piano Destinazione Italia, which is considering incentives to spur large Italian corporations to escort Italian spin-off companies through the globalization process by taking them “on board” in international trade missions.27 Growing and creating jobs can be difficult for any entrepreneur. It’s especially challenging for those who seek to expand beyond their home market. Indeed, global expansion carries with it numerous barriers that are often hard for entrepreneurs to overcome. But if they can work through the challenges—with the support of digital technologies and bridgemakers—the payoff will be worth the effort: faster growth and more robust job creation, both in entrepreneurs’ home country and in the foreign markets they serve.
  • 90. Chapter 3: Entrepreneurs can create 10 million new youth jobs in G20 countries Entrepreneurs are playing a critical role in the creation of jobs for youth in the G20 countries. They can potentially create 10 million more jobs if several significant barriers to job creation were removed. The youth unemployment challenge While the global economy is growing stronger, unemployment levels are still high in many countries and obstacles to employment growth remain, especially for young people. For the G20 as a whole, the International Labor Organization estimates that during 2013 employment figures were 62 million lower than they would have been had pre-global financial crisis trends in output and employment continued. The drop in employment during and after the crisis disproportionately affected young and disadvantaged people. According to the ILO, more than 44 million young people in the labor force in G20 countries are unemployed. In 20 years, the youth unemployment rate rose by nearly 3 points to a 2013 peak of 13.3 percent (Figure 8).28 Figure 8: Youth unemployment has dramatically increased since 1992 Youth unemployment rate trend 1993–2013 Source: ILO Global Employment Trends 2014 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 10.5 11.0 11.5 12.5 13.5 12.0 13.0 14.0 10.9 11.2 11.4 11.8 12.0 12.5 12.6 12.7 12.2 11.8 13.0 13.0 13.3 13.1 12.4 12.3 % 2014 10.9 11.911.9 11.3 12.8 Chapter 3: Entrepreneurs can create 10 million new youth jobs in G20 countries 29
  • 91. 30 Entrepreneurs are the G20 countries’ job creators Entrepreneurs play a central role in combating youth unemployment in the G20 countries While there are no easy answers to the youth unemployment challenge, there is plenty of evidence to suggest that entrepreneurs can play a vital role in re-energizing youth employment. Entrepreneurs themselves believe they can have an impact on unemployment: entrepreneurs create jobs for themselves (see page 31 on under-served young entrepreneurs), and a large majority of entrepreneurs (85 percent) surveyed were very confident of the role they can play in creating jobs in their country. Several studies have confirmed the fact that young firms, predominantly created and developed by entrepreneurs, have a critical role in job creation. John C. Haltiwanger, Ron S. Jarmin and Javier Miranda concluded in a paper published by the National Bureau of Economic Research (NBER)29 that start- ups in the United States continue to ramp up, growing faster than more mature companies and creating a disproportionate share of jobs relative to their size. The Kauffman Foundation, which regularly publishes detailed data on the US economy and recently the State of Kansas, both point towards the same direction.30 The OECD looked at a wide set of countries and found similar results. Its research31 across 15 countries, published in 2013, shows that new firms (those five years old or younger) generated nearly half of all new jobs in the past decade (Figure 9), although they accounted for only about 20 percent of non-financial business sector employment. This was true in nearly every period and country considered32 , especially during the crisis, when most of the jobs destroyed were the result of older businesses downsizing while net job growth in young firms remained positive. Young Firms (5 years old or less) Old Firms (6 years old or more) Total % -6 6 -4 4 -2 2 0 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 Figure 9: In the past decade young firms have increased jobs every year Net job growth, younger versus older firms, 2001–11 (Average across 15 countries—% net job growth) Source: OECD (2013), OECD Science, Technology and Industry Scoreboard 2013: Innovation for Growth, OECD Publishing.
  • 92. Chapter 3: Entrepreneurs can create 10 million new youth jobs in G20 countries 31 Youth Business International: enabling job seekers to create their own job throughout the world.33 Youth Business International is a global network of independent non-profit initiatives helping young people start and grow their own business and create employment. YBI members assist under-served young entrepreneurs with a combination of training, access to capital, mentoring and other business development services. In 2013, YBI’s members helped 14,406 young people start their own business and gave entrepreneurship training to nearly 200,000 young people. The interventions depend on the local context. For example, Aosite Education was founded by a young entrepreneur supported by YBI’s member, Youth Business China. This after-school tutoring company operates across the Chinese city of Chengdu. The founder, Huaping, worked in a teaching institution and was determined to pursue his vision of opening his own center. However, he could not find support from the banks. Where commercial lenders had seen unacceptable risk, Youth Business China (YBC) saw potential and stepped in to support the young entrepreneur. YBC provided a low- interest loan and matched Huaping with an expert mentor with highly relevant experience in the education sector. Huaping now runs more than 11 training centers and employs more than 100 part-time and 50 full-time staff. Going forward, YBI aims to support 40,000 young entrepreneurs in starting and growing a business per year by 2017 in at least 60 countries. Increasingly, organizations are collaborating to advance entrepreneurship. In its role as bridgemaker, Accenture convenes strategic partnerships for its Skills to Succeed initiative, which will equip 700,000 people around the world by 2015 with the skills to get a job or build a business. One of those partners is YBI.
  • 93. 32 Entrepreneurs are confident in their ability to generate revenues and create jobs in the future, within their companies and beyond. Eighty percent of entrepreneurs surveyed expected positive revenue growth in 2014 and 33 percent expected double- digit revenue growth—well above general economic trends. Seventy-four percent of entrepreneurs surveyed say they will recruit young talent in 2014 (Figure 10). The more innovative, the more likely entrepreneurs are to create jobs: ninety- one percent of those who said innovation is critical or important to them also plan to create jobs in 2014—compared with 61 percent of those who don’t find innovation critical or important to their business. Overall, most entrepreneurs are optimistic about their ability to create jobs for youth in their company. The creation of jobs by entrepreneurs does not stop at the doorstep of their companies. In fact, to a large extent, counting the number of jobs created by the number of workers on the payroll is under-estimating the number of jobs created by young firms. An increasing number of these companies also employ freelancers, contractors or leverage crowdsourcing to complement their needs. Just under 70 percent said they plan to leverage external collaboration mechanisms such as crowdsourcing, freelancers and contractors as a complement to formal recruitment (Figure 11). Such mechanisms are becoming more prominent as online global networks are developed and offer access to diversified talent through flexible working arrangements. Using such collaboration platforms offers entrepreneurs access to a significantly larger pool of resources they can deploy to help them find new customers and opportunities and keep their operations very efficient. As described by a participant to one workshop: “We’re the brand in front of the customer but we now have this kind of unlimited resource pool that’s available on demand, that we can tap into, similar to the cloud environment for highly skilled engineers.” Figure 10: Three-quarters of entrepreneurs expect to create jobs Do you expect to create new jobs in 2014? Figure 11: Sixty seven percent of entrepreneurs complement their work force Plans to develop external collaboration (e.g., crowdsourcing, freelancers, contractors) as a complement to recruitment in 2014 24% 43% 33% 67% Sample base = All respondents (N=1,080) To a large extent—external collaboration will be broadly leveraged To some extent—external collaboration will be leveraged but remain limited We do not plan to develop external collaboration 26% 74% NO YES Sample base = All respondents (N=1,080)
  • 94. Chapter 3: Entrepreneurs can create 10 million new youth jobs in G20 countries 33 Are entrepreneurs becoming “social entrepreneurs”? The relationship between entrepreneurs and the ecosystem in which they operate is a complex, multifaceted relationship, as companies can only thrive in the long run if their ecosystem is flourishing, and the development of the ecosystem depends to a large extent of the way companies contribute to an inclusive, environmentally and socially responsible growth. Interestingly, 70 percent of surveyed entrepreneurs (Figure 12a) consider themselves as “social entrepreneurs” either because they have a direct impact on their local community or because in their company profits are reinvested in the business itself (Figure 12b). In other words, many entrepreneurs who manage “for profit” businesses believe their mission goes beyond generating profits for shareholders. This applies to a large extent regardless of the location of entrepreneurs. Except in the US, UK, Australia and Germany, a large majority of entrepreneurs, whether based in mature markets or emerging markets, consider themselves social entrepreneurs. Such a finding is contrary to the conventional wisdom that entrepreneurs collaborating for the good of their country or society are much more prevalent in emerging markets than in mature ones. Given the size of the challenges, especially related to youth unemployment, most entrepreneurs are willing to contribute to the development of their local community beyond their traditional commitment to grow their business and create jobs. Figure 12a: Would you define yourself as a social entrepreneur? Figure 12b: What best describes your definition of a social entrepreneur? 30% NO YES 70% Sample base = All respondents (N=1,080) Sample base = All respondents (N=1,080) 30% Financially self-sustainable company in which profits are reinvested in the business itself 14%Non-profit activity 56%Actively contribute to build the local community and/or develop solutions to social problems
  • 95. 34 Can entrepreneurs create more jobs? Skills shortage and lack of labor market flexibility are particularly important barriers to creating more youth jobs. Several barriers prevent entrepreneurs from doing more to spur youth employment across the G20 countries. Barriers differ across countries due to the unique characteristics of local labor markets (Figure 13). Skills shortage hits entrepreneurs particularly hard. Whether the firm is large or small, availability of appropriate skills is the single most important barrier to recruiting more young people. In geographic terms, entrepreneurs in the US, Indonesia, Turkey and India expressed particularly high concerns. Overall, six in 10 (62 percent) entrepreneurs said difficulty accessing the right talent was one of their top recruiting concerns, regardless of their industry (manufacturing or services) or size. Small and large firms face similar skills shortages, because they are competing more and more for the same underdeveloped talent pool, especially STEM (Scientific, Technology, Engineering, Mathematics) skills, which are very much in demand around the world. Entrepreneurs’ specific needs also make it difficult to fill key roles. Participants in a workshop in Paris described their hunt for talent as “looking for five-legged sheep”— employees who can do everything with successfully. Small-company employees must be very flexible, be willing to take on a multitude of responsibilities and be able to develop and implement processes from scratch—in short, be very entrepreneurial employees. As an entrepreneur in the UK puts it: “The ability for young talent to perform in all dimensions is rare and can be inconsistent with frequent highly specialized graduate curriculum.” Figure 13: Main barriers that prevent your company from recruiting more young people Sample base = All respondents (N=1,080) 62% 54% 54% 48% 43% 39% Lack of availability of appropriate skills BARRIERS RANKED HIGHEST BARRIERS RANKED LOWEST Lack of incentives Access to finance-capital Labor market inflexibility Government regulation and compliance requirements Support for innovation ARGENTINA AUSTRALIA CANADA CHINA FRANCE GERMANY INDIA INDONESIA ITALY JAPAN MEXICO RUSSIA SOUTH AFRICA SOUTH KOREA TURKEY UK US
  • 96. Chapter 3: Entrepreneurs can create 10 million new youth jobs in G20 countries 35 The lack of labor market flexibility is also a significant barrier to hiring more young employees, especially for entrepreneurs in countries such as France, India, China or Italy. Entrepreneurs sometimes feel that the investment in training young people and building their business skills is too high given the lack of senior employees’ time to train and coach new recruits in small firms. One entrepreneur succinctly described the challenge: “People who have just arrived on the job market after graduating are usually skilled enough. What they lack is experience, which is part and parcel of the business acumen. They have to build their communication and business skills alongside their different work experience or temp positions.” To help them compensate for some of the specific investment required to give young people the required skills to be productive, a large number of entrepreneurs would appreciate incentives and a direct role in youth education Entrepreneurs could create 10 million new youth jobs A large majority of surveyed entrepreneurs are confident that they could create more jobs in the future than they are already doing. This would require a new paradigm described by the “3+1” formula: an active and sustained collaboration among entrepreneurs, large companies and bridgemakers, enabled by government through relevant public policies. Collaboration among these parties can take different forms, depending on the characteristics and most pressing issues of the local ecosystems (such as open innovation, globalization, education or more general technology development priorities). A large majority of entrepreneurs want more support from governments, large businesses and bridgemakers to help them sustain their contribution to economic growth and job creation. In fact, entrepreneurs view collaboration across the public and private sectors as a potential game changer that may trigger a new wave of competitiveness and sustainable growth. Digital technologies make this game change possible, especially given the substantial possibilities offered by technology-enabled, open innovation. But for this to happen, adequate policy frameworks must be implemented and the necessary technology investment must be deployed at speed and scale (which we discuss in more detail in chapter 4). In this context—assuming entrepreneurs’ expectations are met—entrepreneurs’ job creation potential would be unleashed, resulting in 10 million new youth jobs potentially created across the G20 countries, according to an Accenture estimate (Figure 14)34 . This would help drive the reduction of youth unemployment from 13 percent to 10 percent35 . (See page 36 for details on Accenture’s job creation model.) Figure 14: The promise of digital entrepreneurs: creating 10 million youth jobs in the G20 countries UNEMPLOYED YOUTH (MILLIONS) Unemployed youth — million (ILO historical) Unemployed youth — million (ILO forcasts) 2011 26 28 30 32 34 36 38 40 42 44 46 48 44.3 44.3 44.9 31.3 41.8 10M NEW JOBS IF BARRIERS WERE REMOVED If barriers were removed (Accenture estimates, millions) 44.2 2012 2013 2014 2015 2016 2017 Source: Accenture Research scenario based on historical ILO Global Employment trends2
  • 97. 36 Job creation model The job creation model combines population and labor force statistics published by the World Bank, ILO and OECD and insights derived from Accenture’s primary research and modeling. The model is based on the following input for each G20 country and for the G20 countries as a whole: • Current number of youth and evolution trend. This comprised all persons between the age of 15 and 24, based on World Bank data • Participation rate: percentage of the young population that is part of the labor force, based on ILO data • Youth jobs and youth unemployment data in the youth active population, based on ILO data • Portion of youth labor force that is employed by entrepreneurs/SMEs based on World Bank data • Expected youth job growth and youth unemployment, based on ILO macro assumptions (macro economic trends, labor productivity trends) • Expected youth job creation declared by surveyed entrepreneurs • Comparisons of surveyed entrepreneurs’ expectations regarding job creation in “business as usual” scenario vs. “if barriers were removed” scenario • Assessment of job creation direct impact in second scenario at G20 level and in the G20 countries, compared to current trends • Projections at G20 level and in G20 countries, including test of results with ILO and OECD data and qualitative cross-check with experts to ensure technical and economic plausibility of results NB: The enclosed model does not take into account another critical dimension of youth job creation: the creation of jobs by young people for themselves, when they create their own business. Although this potential is hard to quantify precisely, concrete examples such as the jobs created by entrepreneurs prove its importance.
  • 98. Chapter 4: Entrepreneurs expect G20 budding reforms to be amplified Since 2013, there’s a new momentum for public policies dedicated to entrepreneurship, as more countries adopt entrepreneur-friendly policies. Governments recognize the important role innovative entrepreneurs and start- up ecosystems play in boosting an inclusive and job-rich economic growth, as illustrated by the fact that the G20 heads of state and governments recognized the role of entrepreneurs in youth job creation in their final communiqué of the 2013 Summit. Innovative legislations include: 1. Access to funding: acknowledging the need for a strong legal framework around crowd-funding, ‘fail fast’ procedures to alleviate liquidation procedures and remove the stigma from failing to gain future access to finance 2. Help in going global more quickly: thinking beyond traditional finance- oriented export policies to set facilitation programs such as start-up visas 3. Access to digital infrastructure: investment in broadband infrastructure, rules and regulations to encourage the private sector to expand connectivity 4. Access to innovative talent: taxation policies on stock options are becoming more accommodating and several countries introduced more flexible labor contracts Chapter 4: Entrepreneurs expect G20 budding reforms to be amplified 37
  • 99. 38 Australia helps young entrepreneurs’ ideas flourish Australia has been described as the 11th easiest country in which to start a business. Australia has a number of innovative programs designed to help young start-ups become successful. One Australian organization working in this direction is UNSW Australia and its technology transfer company, NewSouth Innovations (NSi). NSi recently launched two programs to help drive new innovations into society and the economy: Easy Access IP and the Student Entrepreneur Development program. The Easy Access IP program offers UNSW research outputs to society for free. What is unique about this program is that the university forgoes any claim to license revenues and does not collect any royalties from commercialization. In return for the free license, the partner must agree to do something with the intellectual property, must acknowledge that the intellectual property came from UNSW and must agree to let the university continue to do research on the intellectual property. Student entrepreneurs are encouraged to develop Easy Access IP opportunities. The Student Entrepreneur Development program at NSi encourages and facilitates UNSW students to become entrepreneurs and leaders of the future. It does this by providing students with a suite of free business support services and access to its industry networks. Thus far, the program has been a resounding success: More than 200 student-led start-up opportunities have been through the program in its first two years. These two programs are good examples of how a university technology transfer office has found a way to capture ideas from young entrepreneurs and give them the tools and support to flourish. The programs can serve as a model that can be used to help young entrepreneurs outside the university system to more easily navigate the entrepreneur ecosystem and find a market for their promising new ideas.
  • 100. Chapter 4: Entrepreneurs expect G20 budding reforms to be amplified 39 Accenture’s survey found that entrepreneurs who started their business in the past 12 months are more confident in the actions taken by their country’s government to support youth job creation than “older” entrepreneurs. However, most public policies are still largely fragmented and considered as not sufficient by entrepreneurs surveyed. Only about one-fourth of all entrepreneurs think that actions taken by their government to support entrepreneurial innovation are relevant and efficient, one-fifth of entrepreneurs feel that their government has done enough to support their international expansion and only one-fourth of all entrepreneurs consider the actions taken by their government to support youth job creation as relevant and efficient (Figure 15). Entrepreneurs in the Accenture survey also have their own thoughts on what governments can and should do to help them succeed. They identified a number of policy actions entrepreneurs believe can help them boost innovation, expand globally, and create more jobs. Five policy expectations to foster open innovation Although entrepreneurs’ expectations regarding innovation may vary from country to country and region to region due to unique local differences, five priority themes emerged from the Accenture survey and discussions with local experts (Figure 16). 1. Simplify regulation. “Red tape” is still a major obstacle to growth in many countries, despite government commitments to address this topic, from reducing the number of days required to start a business to greater tolerance for failure. A typical example is the “sharing economy” where new entrants that create new business models face complex regulations that are slowing the rise of sharing economy players and impeding the creation of new activities and jobs. 2. Develop tax incentives to encourage open innovation. Tax incentives for innovation are frequently mentioned as critical elements to support the development of new businesses—such as the tax R&D credit and tax reduction for “young innovative firms” in France, tax relief for early-stage investments through the “seed enterprise investment scheme” in the UK, and the R&D tax incentive in Australia. At the employee level, stock options—still favored by many start-ups—do not benefit from a stable and encouraging environment in all G20 countries, which is hampering entrepreneurs’ efforts to attract and retain the top young talent. Figure 15: What do you think of the actions taken by your country’s government? 26% 45% 29% 21% 44% 35% 25% 44% 31% Relevant and efficient actions are taken Actions are taken but they are not relevant or efficient No real action taken ENTREPRENEURIAL INNOVATION ENTREPRENEURIAL INTERNATIONAL EXPANSION JOB CREATION Sample base = All respondents (N=1,080)
  • 101. 40 3. Focus on Small Business Acts and other similar mechanisms to open public procurement to innovative small players and encourage open innovation with the participation of small companies. SBIR-like programs may enhance the investment made by start-ups in new technologies and DARPA-like programs can enable innovation through a bottom-up, government-directed network of agencies.36 Although frequently mentioned, SBIR and DARPA still have few equivalents across G20 countries. 4. Develop better access to affordable financing, including through a flexible approach to crowdfunding and an improved venture capital ecosystem. Financing for innovative start-ups is complex, as different financing instruments are needed for various stages of a firm’s development. Policymakers in a number of countries have sought to address the prevailing seed and early-stage financing gaps by intervening in multiple areas simultaneously. A systems approach is needed that covers both supply- and demand-side intervention as well as framework conditions (see page 45). Equity crowdfunding is a particularly promising field for start-ups and should be encouraged by G20 governments through policies that facilitate market development while protecting household investors. 5. Encourage systemic approaches that enable entrepreneurs, large businesses, bridgemakers and government to foster open innovation and youth job creation at the local level. Investment in digital infrastructures to enhance access to reliable and low-cost broadband, combined with adapted regulation on data and cloud, are typical examples of urgent reforms expected by a growing number of entrepreneurs. Such reforms require deep cooperation between various stakeholders of the entrepreneurial innovation ecosystem. Figure 16: What priority actions do you expect from the government in your country to support your innovation agenda? Sample base = All respondents (N=1,080) RANKED WITHIN TOP 3 35%Small business act 30% Reducing red tape and regulation for entrepreneurs 25% Development of public bank to finance entrepreneurs & small & medium enterprises 24% Opening of public procurement to innovate small & medium enterprises 23% Development of technology education & training 23% Supportive environment for business angels & venture capital funds 20% Public investment in technology infrastructure 18% Development of local innovation ecosystems 17%Public investment in R&D 41%Tax incentives
  • 102. Policy expectations to foster entrepreneurs’ global development Entrepreneurs’ expectations regarding trade and globalization converge frequently on key topics (see page 44), regardless countries of origin, as entrepreneurs who aim at developing their business at the international level face similar issues and challenges. The priority themes can be broadly grouped in four topics: 1. Support the conclusion of Global Trade agreements and implement the recent trade facilitation agreement, with an increasing focus on digital matters, to facilitate the rise of digital businesses across borders. Entrepreneurs support the development of global trade through the reduction of tariff and non-tariff barriers. In this context, the rapid implementation of the Bali package agreement on trade facilitation is viewed as a step in the right direction by many but far from sufficient. Due to the rising importance of digital businesses and especially the businesses based on big data and analytics, the topic of “mobility of data” through national boundaries is a critical one as regulations in this field are considered to be largely outdated. Progress towards greater flexibility of data mobility, with a balanced approach toward innovation and the respect of privacy of individuals and a harmonization of cloud regulation and standards, will be key to further enhance the development of young firms at the global level. 2. Boost international financing of young firms. International financing—particularly, its scarcity—was mentioned again and again as impeding the international development of young companies. Many entrepreneurs are concerned that trade financing, for instance, may be significantly inhibited by Basel III requirements and, therefore, want a renewed emphasis to ensure a dynamic trade financing sector. 3. Encourage the mobility of talent by lowering barriers to immigration for entrepreneurs. Several countries have adopted programs to facilitate talent mobility. For instance, Canada’s “Start up Visa program” will offer several thousand visas per year to entrepreneurs who secure funding from designated Canadian investors, whether VC or business angel. The US “Skills Visa” act will also aim to expand the local talent pool by allowing selected entrepreneurs to remain in the US for three years if they demonstrate significant investment or create more than four jobs. At the G20 level, a commitment to facilitate the mobility of entrepreneurs and workers with in-demand skills (such as digital expertise) though an accelerated visa scheme will help support entrepreneurs’ international development. 4. Create more active communities and cross-pollination between G20 entrepreneurs through a formal “exchange” program. In many countries, entrepreneurs can benefit from specific local technology clusters; however, in most cases, these clusters are not connected internationally to other equivalent clusters. At the bare minimum, the openness of clusters to “visiting” entrepreneurs—similar, to some extent, to the Erasmus program developed in the EU for students—might provide new opportunities for cross-pollination and ways to make G20 initiatives concrete to entrepreneurs. Already, communities of expatriates in Silicon Valley are helping entrepreneurs with similar origins, such as the South African expatriates grouped in the Sable Accelerator that help South African entrepreneurs expand in global markets. Beyond such targeted measures, the development of online and offline communities may greatly reinforce the sense of belonging to the entrepreneurs’ ecosystem and enhance the development of international businesses. Chapter 4: Entrepreneurs expect G20 budding reforms to be amplified 41
  • 103. Access to finance for young innovative firms Karen E. Wilson, OECD and Bruegel Young innovative firms face many difficulties accessing seed and early-stage finance and these difficulties have increased over the past several years. Banks have been reluctant to provide loans to start-ups as a result of the financial crisis. Meanwhile, venture capital firms have become more risk averse and, in many cases, have focused on later-stage investments. Angel investors have become more visible and active through groups, syndicates and networks and increasingly are playing an important role in seed and early-stage finance.37 There has been increasing concern from policymakers around the world about the growing financing gap for high-growth firms, particularly in the seed and early stage. As a result, governments in many countries have sought to address the financing gap and perceived market failures by supporting the seed and early-stage market.38 However, the objectives behind these interventions often go beyond addressing financing gaps. Many countries recognize the critical role that young, innovative firms play in creating jobs and economic growth and are seeking ways to facilitate the creation and growth of these firms.39 Many policy measures have been on the supply side, ranging from grants, loans and guarantee programs to tax incentives and equity instruments. Support for all of these programs increased from 2007 to 2012 as a result of the financial crisis. However, in equity instruments, there has been a shift in focus in OECD countries from government equity funds that invest directly in start-ups to more indirect models such as co-investment funds and fund-of-funds. These later approaches seek to leverage private investment through various incentive structures. The demand side is critical to success of seed and early-stage financing; however, it is often overlooked in favor of supply-side actions. For firms to launch and grow successfully, human capital development is important. This could be in the form of education, training and/or on-the-job experience. Many successful entrepreneurs are serial entrepreneurs, starting more than one company. As they start new companies, they share their experience, knowledge and networks with others. There is increasing evidence of the importance of social capital, both local and global, as high-growth firms need to grow beyond national borders. International expansion and investment can be critical to the success of these firms. The framework conditions in a country can perhaps have the most impact on the provision of seed and early-stage finance. The development of financial markets and exit opportunities, whether through IPOs on a stock exchange or mergers and acquisitions by other firms, directly influences the availability of seed and early- stage financing. Bankruptcy regulations, labor market restrictions and other framework conditions also impact the creation and growth of innovative firms. Regulatory barriers and administrative burdens on institutional investors, venture capital funds, angel investors and high-growth firms can have a direct result on the provision of seed and early-stage finance. In particular, securities legislation and more stringent capital requirements on institutional investors could reduce the supply of investment in venture capital from banks, pension funds and insurance companies, traditionally three of the largest types of private institutional investors. Financing for innovative start-ups is complex, as different financing instruments are needed for various stages of a firm’s development. Policymakers in a number of countries have sought to address the prevailing seed and early-stage financing gaps by intervening in multiple areas simultaneously. Therefore, policy interventions should not be seen in isolation, but as a set of interacting policies. A systems approach is needed that covers both supply-and demand-side intervention as well as framework conditions. Evaluation and periodic adjustment of the specific policy instruments as well as the full policy mix is important, although it can be challenging in practice. 42
  • 104. Chapter 4: Entrepreneurs expect G20 budding reforms to be amplified 43 Policy expectations to foster access to talent and creation of jobs Entrepreneurs face many challenges in creating jobs. Often, these challenges can be unique to a specific country or region due to prevailing public policies and regulations. However, entrepreneurs and local experts agreed on six broad policy themes that could help entrepreneurs find and hire talent and, in the process, significantly boost the number of jobs they create (Figure 18). 1. Support vocational training and apprenticeship. Vocational training and apprenticeships are now recognized as critical to helping develop new skills in existing talent pools. However, entrepreneurs believe current programs must be amplified, except in a few countries where they are either recognized as well developed (such as Germany) or as being developed at scale (in the UK, for instance). 2. Develop STEM graduates. Entrepreneurs need access to a greater talent pool for STEM graduates; hence, the expressed need for the development of STEM graduates at an accelerated pace in the G20 countries. The gap between supply of and demand for STEM is widening and impeding the development of entrepreneurs’ businesses—whether focused specifically on digital goods and services or not. 3. Increase labor market flexibility. Greater policy attention to the cost of labor and labor market flexibility is particularly important to entrepreneurs, who seek to boost youth employment but have no guarantee that their business will succeed. Italy, for instance, recently adopted new legislation that recognizes, for the first time, the unique needs of the start-up ecosystem by allowing flexible labor contracts (fixed terms lasting six to 36 months), specific variable pay packages, and tax benefits. Thus, a better match between skills supply and demand for skills is wanted by many entrepreneurs.40 4. Encourage entrepreneurship culture through new methods of education/learning. Many entrepreneurs are looking for new approaches to education, and learning can be developed at scale to further enhance an entrepreneurial culture throughout G20 countries. Examples include dedicated Massive Online Open Courses (MOOCs); specific university programs, such as the EXIST program in Germany (which facilitates the development of new businesses through financial grants for tech infrastructures created for start- ups by universities); and courses given by entrepreneurs in universities to encourage potential young entrepreneurs to create their own businesses. Sample base = All respondents (N=1,080) RANKED WITHIN TOP 3 37% Develop access to international finance-funding 37% Facilitate identification of local partners-alliances 32%Reduce red tape for exports 30% Remove foreign direct investment restrictions 30% Strengthen international rule of law (e.G., Intellectual property rules) 30%Facilitate mobility of talents 21% I do not know—I am lacking visibility on this issue 39%Reduce trade barriers Figure 17: What priority actions do you expect from G20 governments to support your international expansion?
  • 105. 44 Figure 18: What priority actions do you expect from the government in your country to support youth job creation by your company? Sample base = All respondents (N=1,080) RANKED WITHIN TOP 3 33% Promote vocational training— improve apprenticeship 29%Increase labor market flexibility 29%Develop entrepreneurial skills 29%Improve equity and access for job seekers 27% Enable lifelong learning & development skills 25% Promote direct involvement of businesses in tertiary educational system 25% Increase science-technology-engineering & maths graduates 22%Remove red tape 22%Facilitate mobility of talents 38% Develop financial incentives (e.g., tax reduction) 5. Encourage development of more agile types of working environment and forms of employment. Innovative companies seek to develop a more agile and flexible working environments that allow them to tap into the best global talent while retaining flexibility to adjust. Regulations have often not fully kept pace with such arrangements. Examples of more agile environments include the use of freelancers and sub- contractors, easier access to visas to tap into globally scarce skills and homeworking or job-sharing agreements. 6. Facilitate development of new categories of companies focused on social outcomes as much as on economic and financial ones. In the US, “benefit corporations,” which are now recognized in 18 states, operate as for-profit companies but are also enabled to develop social and environment commitments. Around the world, new types of companies are needed to recognize and strengthen social businesses as a specific and promising type of business.
  • 106. Chapter 4: Entrepreneurs expect G20 budding reforms to be amplified 45 What should Large Companies do: Define their strategy for Digital Open Innovation How to implement Digital Open Innovation in large companies As large companies test different approaches to technology- enabled open innovation, they can benefit from a rigorous framework that can help maximize the impact of their open innovation program and their relationships with start-ups. One example is the Accenture Open Innovation program, which operates as a bridgemaker. This framework, which includes three different phases (Discover, Engage and Success) can accelerate the open innovation process, enable entrepreneurs to achieve concrete outcomes at speed and scale, and ensure mutually beneficial connections with other companies at every stage of the process. OUTCOMES Identify high quality Start-ups Build awareness & presence Establish ecosystem relationships OUTCOMES Drive towards commercial validation Engage, de-risk & scale early stage technologies to large companies OUTCOMES Strategic engagement between bridgemaker (eg: Accenture), Start-up and large companies Criteria, Filter, Score Education, Workshop, Experience Scan, First Meeting, Thesis Accelerator Engagement Universities VentureCapital DISCOVER ENGAGE SUCCESS OPEN INNOVATION ENDORSEMENT ENGAGEMENT AGREEMENT Database Conference & Events Hackathons Accelerator Incubator Referrals QUALIFIED INNOVATION PRESENTED SOLUTION REQUIREMENTS OPEN INNOVATION CLIENT (B2B) START-UPS QUALIFIEDINNOVATION PRESENTED INNOVATION REQUESTED DEMAND FULFILLMENT CO-INVEST &SCALE INVESTMENT WIN M&A PROOF OF CONCEPT PILOT Open Innovation Process
  • 107. 46 About the research To identify entrepreneurs’ views on the opportunities and challenges related to innovation within their business and understand their expectations related to G20 governments’ policies to support them in their growth and job creation, Accenture conducted a comprehensive research effort in close cooperation with the Young Entrepreneurs’ Alliance. The research comprised six streams: • An exclusive online survey of more than 1,000 entrepreneurs across G20 countries* • An online collaborative forum of entrepreneurs powered by crowdsourcing • Four workshops with entrepreneurs in the US, France, India and China • More than 20 in-depth qualitative interviews with subject matter experts • Analysis of the entrepreneur landscape in all G20 countries • Modelling analysis of job-creation opportunities US 164 INDIA 63 AUSTRALIA 59 ITALY 58 FRANCE 57 MEXICO 55 CANADA 54 CHINA 53 GERMANY 53 SOUTH AFRICA 53 ARGENTINA 51 RUSSIA 51 TURKEY 51 UK 51 INDONESIA 51 BRAZIL 50 JAPAN 50 SOUTH KOREA 50 SAUDI ARABIA 6 Online survey of more than 1,000 entrepreneurs The fieldwork for the online entrepreneur survey was conducted by Harris Interactive in G20 countries between March 2014 and April 2014. The detailed breakdown by country is as follows: Number of survey respondents
  • 108. Online forum powered by crowdsourcing An online forum was created and maintained by Accenture in collaboration with Harris Interactive to give entrepreneurs an opportunity to express their opinion and share ideas with other entrepreneurs on the opportunities and challenges they face regarding innovation, with a focus on expectations for public policies and youth job creation. This online collaborative blog was active for the period throughout May 2014. Interviews with subject matter experts Accenture conducted more than 20 in-depth C-level interviews with venture capital firms, accelerators, business angels, universities and large corporations, as well as with experts in institutes, across G20 countries. Four local workshops with entrepreneurs To deepen the qualitative analysis, gather relevant country examples and develop actionable recommendations, Accenture conducted four workshops in April 2014 and May 2014, in San Jose (Silicon Valley), Paris, Bangalore and Beijing. Each workshop included between eight and 12 entrepreneurs. Country analysis Accenture created country profiles focused on recent initiatives supporting entrepreneurship in each G20 country, with a particular emphasis on innovation, trade/globalization, skills/employment and ecosystem/funding mechanisms. Accenture also cross-checked and reviewed its findings with many of the local representatives from the YEA, who were able to provide additional insights. Job-creation model The methodology combines population and labor force statistics and insights derived from Accenture’s primary research. The process combines the following analysis: • Analysis of long-term trends related to youth jobs, youth unemployment and role of entrepreneurs in creating youth jobs in G20 countries, based on publicly available data from sources such as World Bank, OECD and ILO • Views of surveyed entrepreneurs on barriers that prevent them from recruiting more young people and on-job creation potential, should those barriers be removed • Projections at G20 level and in G20 countries, including test of results with ILO and OECD data and qualitative cross-check with experts to ensure technical and economic plausibility of results About the research 47
  • 109. 48 Acknowledgements This report and the research would not have been possible without the generous participation of many people. Project team Bruno Berthon: Managing Director– Accenture Strategy, Cross-Industry Strategy Lead Laurence Morvan: Managing Director, Office of the CEO Francis Hintermann: Global Managing Director, Accenture Research Jitendra Kavathekar, Managing Director, Accenture Open Innovation Sybille Berjoan, Charlotte Raut, Anton Pichler, Ajay Garg, Jonathan Anchen, James Dickerson, Ajit Kallahally, James Hogarth, Paul Johnson, Georgina Lovati and Edvina Kapllani from Accenture Research Barbara Mulert, Accenture Marketing & Communications Also from Accenture we would like to recognize the significant contributions from Accenture Technology Labs and Accenture Open Innovation: Prith Banerjee, Sanjoy Paul, Dong Liu, Christine Nguyen, Masoud Loghmani, Elizabeth Reynolds, Namrata Rao, Smriti Metikurke and Ester Li Wang. From OECD/Bruegel, we would like to thank Karen Wilson for her contribution to the specific topic of “Access to finance for young innovative firms.” Karen Wilson authored the page dedicated to this topic. Queries relating to this report should be directed to: bruno.berthon@accenture.com francis.hintermann@accenture.com s.berjoan@accenture.com Young Entrepreneurs’ Alliance Executives From the G20 YEA Thought Leaders Committee, we would like to recognize the significant contributions of: Jeremy Liddle, CEO, Entreprise Network for Young Australians—Australia Igor Egorov, Sherpa, Center for Entrepreneurship—Russia Kevin Langley—Global Strategic Alliance Committee—Entrepreneurs’ Organization—USA Marsha Josephs, Director, Government Relations at Futurpreneur—Canada Helen Osborne, Director Strategy and Performance—The Prince’s Youth Business International (YBI) Ozan Safkan, Deputy Secretary General, TUGIAD Grégoire Sentilhes, President Citizen Entrepreneurs—France Jean-Louis Grégoire, Partnership and Thought Leader Committee Chair and Sherpa, Citizen Entrepreneurs—France From the G20 YEA local networks, we would also like to thank Gene Lim, Kumara Guru, Luca Donelli and Başak İlisulu. More broadly, this research would not have been possible without the support of the local members of the YEA. Entrepreneurs and Experts Our research would not have been possible without the contribution of more than 50 entrepreneurs, including those in San Jose, Paris, Bangalore and Beijing. We also would like to thank the following people who kindly spent time with us during one-on-one interviews: Jenny Tooth (UKBAA), Jessica Stacey (NESTA), Jon Bradford (Techstars), Molly Nicolas and Nicolas Pinaud (OECD), Richard Anton (Amadeus Capital), Éric Adam, Pascal Portelli and Benoit Joly (Technicolor), Steve Brodie and Joshua Flannery (New South Innovations), Hamish Hawthorn (ATP Innovations) and Marc Jalabert and Roxanne Varza (Microsoft Ventures).
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Open Innovation is defined as “the use of purposive inflows and outflows of knowledge to accelerate internal innovation and expand the markets for external use of innovation, respectively” 6. http://singularityu.org/overview/ 7. Procter & Gamble is well known as one of the pioneers of open innovation. P&G’s use of open innovation led to the development of many highly successful products that have since contributed millions of euros to P&G’s top line. 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Details in “The Zero Marginal Cost Society – the Internet of Things, the Collaborative Commons and the Eclipse of Capitalism”. Jeremy Rifkin, Palgrave Macmillan, 2014 20. “Technology Innovation Management Review, What Technology Start-ups Must Get Right to Globalize Early and Rapidly.” Tony Bailetti, October 2012 21. Accenture, Technology Vision, 2014 22. Details on the diversity of “internets” in “Smart.” Frédéric Martel, Stock, 2014 23. Quote collected from online forum 24. Quote collected from online forum 25. Quote collected from online forum 26. Unilever: http://www.prweek.com/article/ unilever-puts-cash-behind-digital-global- expansion-marketing/1285223 27. Piano Destinazione Italia – 27. http://destinazioneitalia.gov.it/ wp content/uploads/2013/10/ destinazioneitaliaEnglishVersion.pdf 28. ILO Global Employment Trends 2014. http://www.ilo.org/global/research/global- reports/global-employment-trends/2014/ WCMS_234879/lang--en/index.htm 29. “Who Creates Jobs? Small vs. Large vs. Young” (NBER Working Paper No. 16300), John Haltiwanger, Ron Jarmin and Javier Miranda. http://www.nber.org/papers/w16300 30. www.kauffman.org 31. OECD (2013), OECD Science, Technology and Industry Scoreboard 2013: Innovation for Growth, OECD Publishing. http://www.oecd-ilibrary.org/docserver/ download/5jz417hj6hg6.pdf?expires=1405079 341&id=id&accname=guest&checksum=11C7 CFFBF91142BCB39ABDE4328F2A26 32. Based on ‘Criscuolo, C., P. N. Gal and C. Menon (2014), “The Dynamics of Employment Growth: New Evidence from 18 Countries,” OECD Science, Technology and Industry Policy Papers, No. 14. OECD Publishing. http://dx.doi.org/10.1787/5jz417hj6hg6-en’ 33. http://www.youthbusiness.org/ 34. Accenture modelling based on ILO Global Employment Trends 2014. http://www.ilo.org/global/research/global- reports/global-employment-trends/2014/ WCMS_234879/lang--en/index.htm 35. Accenture modelling based on ILO Global Employment Trends 2014. http://www.ilo.org/global/research/global- reports/global-employment-trends/2014/ WCMS_234879/lang--en/index.htm 36. Cf detailed discussions on some of these levers in “The Entrepreneurial State.” Mariana Mazzucato, Anthem Press, 2013 37. OECD (2011), “Financing High Growth Firms: The Role of Angel Investors,” OECD Publishing. www.oecd.org/sti/angelinvestors 38. Wilson, K. and Silva, F. (2013), “Policies for Seed and Early Stage Finance,” OECD Science, Technology and Industry Policy Papers, No. 9. OECD Publishing. doi: 10.1787/5k3xqsf00j33- en 39. Wilson,K. (forthcoming, 2014), “Policy Implications of OECD Experience in Seed and Early Stage Finance” 40. Detailed recommendations in “Australia: For Richer, For Poorer? Government’s Role in Preserving Standard of Living.” Accenture, 2014 Sources 49
  • 111. 50 Survey results by country Argentina Australia Brazil Canada China France Germany India Indonesia Italy Japan Mexico Russia South Africa South Korea Turkey UK US How important is innovation to grow your business and create jobs? Critical 18% 27% 20% 30% 15% 11% 9% 27% 22% 19% 28% 24% 2% 38% 12% 16% 27% 22% Important 76% 46% 74% 48% 79% 65% 68% 70% 76% 72% 46% 69% 73% 55% 72% 69% 41% 49% Not very important 4% 20% 2% 11% 6% 19% 15% 3% 2% 7% 20% 7% 25% 8% 14% 12% 25% 21% Not important at all 2% 7% 4% 11% 0% 5% 8% 0% 0% 2% 6% 0% 0% 0% 2% 4% 6% 9% Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% What best reflects your views regarding the importance of open innovation as an enabler of innovation for your business? By open innovation, we refer to joint innovation with external partners including large companies, start-ups, universities, government agencies, etc. Open innovation is a major enabler of innovation in my business 41% 25% 46% 26% 38% 18% 28% 52% 63% 33% 28% 44% 31% 25% 22% 43% 37% 24% Open innovation is an enabler but not a major one 47% 49% 48% 35% 60% 51% 42% 43% 33% 41% 30% 29% 55% 45% 56% 39% 41% 37% Open innovation is not an enabler of innovation in my business 12% 25% 6% 39% 2% 32% 30% 5% 4% 26% 42% 27% 14% 30% 22% 18% 22% 39% Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% To what extent do you collaborate with each of the following organizations when it comes to seeking innovation for your business? Public institutions—Government To a great extent—key partner for innovation 31% 24% 24% 26% 32% 19% 25% 33% 51% 26% 28% 27% 33% 15% 24% 22% 18% 20% To some extent—some experience of collaboration 39% 46% 42% 22% 62% 49% 36% 32% 35% 33% 28% 40% 43% 43% 62% 57% 39% 32% Never—no experience of collaboration 29% 31% 34% 52% 6% 32% 40% 35% 14% 41% 44% 33% 24% 42% 14% 22% 43% 49% Academics—Universities, etc. To a great extent—key partner for innovation 35% 25% 30% 20% 36% 19% 19% 33% 51% 31% 22% 47% 27% 23% 22% 33% 22% 20% To some extent—some experience of collaboration 37% 37% 50% 20% 62% 42% 38% 46% 37% 33% 34% 36% 47% 36% 48% 45% 33% 40% Never—no experience of collaboration 27% 37% 20% 59% 2% 39% 43% 21% 12% 36% 44% 16% 25% 42% 30% 22% 45% 40% Social technologies (e.g., social media, social collaboration platforms, etc.) To a great extent—key partner for innovation 41% 49% 38% 30% 53% 32% 30% 62% 76% 48% 36% 51% 33% 62% 24% 41% 39% 40% To some extent—some experience of collaboration 43% 15% 36% 26% 42% 30% 30% 17% 18% 33% 22% 31% 35% 21% 44% 35% 22% 20% Never—no experience of collaboration 8% 25% 14% 31% 6% 26% 23% 16% 4% 9% 24% 13% 22% 17% 18% 16% 25% 30% R&D institutes To a great extent—key partner for innovation 18% 17% 22% 15% 42% 19% 21% 46% 47% 19% 24% 24% 22% 13% 22% 22% 20% 15%
  • 112. Argentina Australia Brazil Canada China France Germany India Indonesia Italy Japan Mexico Russia South Africa South Korea Turkey UK US To some extent—some experience of collaboration 43% 34% 52% 22% 47% 49% 43% 24% 35% 41% 34% 33% 41% 36% 54% 61% 25% 23% Never—no experience of collaboration 39% 49% 26% 63% 11% 32% 36% 30% 18% 40% 42% 44% 37% 51% 24% 18% 55% 62% Peers—Other SMEs To a great extent—key partner for innovation 24% 29% 30% 26% 45% 23% 23% 35% 41% 22% 32% 24% 24% 38% 20% 25% 31% 34% To some extent—some experience of collaboration 43% 53% 48% 41% 47% 40% 38% 41% 47% 38% 26% 40% 47% 42% 56% 59% 41% 41% Never—no experience of collaboration 33% 19% 22% 33% 8% 37% 40% 24% 12% 40% 42% 36% 29% 21% 24% 16% 27% 24% Large companies To a great extent—key partner for innovation 37% 25% 40% 19% 43% 21% 26% 44% 53% 24% 30% 31% 31% 25% 28% 31% 20% 14% To some extent—some experience of collaboration 35% 47% 46% 43% 45% 60% 40% 29% 35% 45% 38% 42% 49% 49% 50% 55% 45% 41% Never—no experience of collaboration 27% 27% 14% 39% 11% 19% 34% 27% 12% 31% 32% 27% 20% 26% 22% 14% 35% 45% Customers (e.g., co-creation) To a great extent—key partner for innovation 49% 54% 46% 37% 53% 23% 40% 49% 90% 38% 38% 38% 33% 62% 34% 55% 39% 49% To some extent—some experience of collaboration 37% 37% 40% 41% 43% 54% 40% 40% 10% 40% 40% 51% 47% 30% 50% 37% 45% 34% Never—no experience of collaboration 14% 8% 14% 22% 4% 23% 21% 11% 0% 22% 22% 11% 20% 8% 16% 8% 16% 16% Incubators—Accelerators To a great extent—key partner for innovation 22% 29% 34% 19% 34% 12% 13% 27% 35% 17% 26% 36% 22% 9% 14% 25% 16% 10% To some extent—some experience of collaboration 31% 15% 40% 17% 57% 47% 43% 38% 43% 41% 30% 25% 41% 26% 52% 49% 25% 18% Never—no experience of collaboration 47% 56% 26% 65% 9% 40% 43% 35% 22% 41% 44% 38% 37% 64% 34% 25% 59% 73% Non-profit organizations (e.g., foundations) To a great extent—key partner for innovation 29% 20% 18% 15% 38% 19% 19% 33% 25% 17% 18% 15% 22% 19% 18% 24% 24% 16% To some extent—some experience of collaboration 47% 42% 62% 26% 53% 44% 45% 30% 57% 36% 34% 40% 51% 42% 48% 57% 33% 37% Never—no experience of collaboration 24% 37% 20% 59% 9% 37% 36% 37% 18% 47% 48% 45% 27% 40% 34% 20% 43% 47% How important is international expansion to grow your business and create jobs? Critical 6% 15% 18% 13% 15% 14% 9% 22% 22% 14% 22% 11% 2% 15% 6% 20% 27% 9% Important 67% 44% 54% 39% 66% 42% 32% 54% 67% 53% 34% 60% 65% 38% 46% 51% 31% 29% Not very important 16% 22% 16% 22% 15% 21% 36% 22% 12% 21% 18% 20% 27% 19% 34% 24% 22% 26% Not at all important 12% 19% 12% 26% 4% 23% 23% 2% 12% 26% 9% 6% 28% 14% 6% 20% 37% Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Appendix 51
  • 113. 52 Argentina Australia Brazil Canada China France Germany India Indonesia Italy Japan Mexico Russia South Africa South Korea Turkey UK US How important are digital technologies in the success of your international expansion? Critical 22% 24% 24% 15% 13% 19% 11% 16% 25% 9% 18% 25% 6% 19% 6% 14% 27% 11% Important 53% 34% 60% 35% 62% 28% 30% 57% 63% 57% 34% 53% 53% 40% 44% 57% 33% 30% Not very important 12% 17% 6% 13% 15% 25% 32% 19% 10% 19% 20% 9% 25% 8% 32% 16% 12% 12% Not important at all 2% 7% 2% 7% 6% 9% 4% 5% 3% 10% 4% 12% 4% 8% 6% 4% 6% Not applicable—We do not plan to expand internationally 12% 19% 8% 30% 4% 19% 23% 3% 2% 12% 18% 9% 4% 30% 10% 8% 24% 41% Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% What are the main obstacles faced by your company in its international expansion? Logistics costs 33% 32% 30% 35% 15% 28% 36% 38% 41% 38% 28% 45% 18% 26% 32% 27% 24% 17% Challenges to find local partners- alliances 27% 27% 32% 24% 21% 26% 19% 41% 33% 33% 18% 31% 25% 25% 30% 31% 37% 20% Access to international finance- funding 37% 12% 32% 17% 17% 28% 17% 35% 35% 34% 20% 36% 31% 28% 26% 33% 20% 14% Lack of sufficient local market knowledge to identify opportunities 12% 32% 28% 24% 36% 23% 26% 30% 22% 21% 34% 31% 27% 17% 34% 14% 27% 20% Specific local regulations 27% 24% 30% 20% 28% 14% 17% 22% 27% 19% 22% 25% 25% 19% 28% 18% 16% 20% Trade barriers 25% 14% 36% 24% 23% 18% 15% 19% 22% 28% 22% 24% 37% 25% 18% 27% 24% 12% Cultural differences (especially in negotiations) 31% 15% 16% 17% 38% 23% 19% 14% 33% 21% 16% 16% 25% 23% 28% 27% 12% 18% Finding local skilled resources to support the local—regional markets 14% 20% 18% 13% 36% 21% 21% 19% 41% 31% 32% 13% 22% 17% 28% 25% 20% 12% Foreign direct investment restrictions 29% 8% 20% 7% 15% 19% 13% 16% 16% 16% 16% 18% 27% 13% 18% 22% 16% 9% Concerns on intellectual property 10% 19% 12% 11% 25% 12% 17% 10% 16% 12% 10% 11% 25% 11% 18% 20% 16% 15% Obstacles to mobility of talents 18% 10% 22% 13% 25% 19% 4% 17% 8% 17% 4% 11% 18% 6% 16% 20% 8% 12% At least one of these obstacles 88% 71% 92% 69% 92% 77% 68% 87% 98% 90% 74% 87% 94% 70% 92% 88% 73% 56% None of these obstacles 12% 29% 8% 31% 8% 23% 32% 13% 2% 10% 26% 13% 6% 30% 8% 12% 27% 44% Do you expect to create new jobs in 2014? No 22% 29% 16% 44% 13% 32% 30% 5% 4% 38% 42% 13% 16% 19% 16% 14% 49% 43% Yes 78% 71% 84% 56% 87% 68% 70% 95% 96% 62% 58% 87% 84% 81% 84% 86% 51% 57% Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% To what extent do you plan to develop external collaboration (e.g., crowdsourcing, freelancers, contractors) as a substitute to recruitment in 2014? To a large extent—external collaboration will be broadly leveraged 24% 25% 36% 26% 43% 16% 21% 32% 43% 28% 32% 24% 27% 13% 12% 22% 27% 13% To some extent—external collaboration will be leveraged but remain limited 41% 37% 48% 33% 51% 47% 34% 37% 49% 45% 32% 49% 55% 57% 62% 69% 31% 27% We do not plan to develop external collaboration 35% 37% 16% 41% 6% 37% 45% 32% 8% 28% 36% 27% 18% 30% 26% 10% 41% 60%
  • 114. Argentina Australia Brazil Canada China France Germany India Indonesia Italy Japan Mexico Russia South Africa South Korea Turkey UK US Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Would you define yourself as a social entrepreneur? Yes 80% 58% 88% 63% 87% 72% 53% 75% 84% 72% 72% 71% 69% 77% 66% 86% 55% 55% No 20% 42% 12% 37% 13% 28% 47% 25% 16% 28% 28% 29% 31% 23% 34% 14% 45% 45% What best describes your definition of a social entrepreneur? ‘Actively contribute to build the local community and/ or develop solutions to social problems 31% 59% 66% 52% 62% 63% 49% 62% 75% 66% 54% 60% 41% 62% 40% 59% 63% 51% ‘Non-profit activity 20% 15% 10% 7% 19% 11% 17% 2% 6% 9% 22% 18% 25% 2% 40% 22% 8% 13% ‘Financial self-sustainable company in which profits are reinvested into the business itself. 49% 25% 24% 41% 19% 26% 34% 37% 20% 26% 24% 22% 33% 36% 20% 20% 29% 36% What are the main barriers that prevent your company to recruit more young people (30 years old)? Ranked within top 3 Availability of appropriate skills 43% 47% 64% 61% 60% 42% 60% 71% 75% 50% 62% 56% 65% 64% 52% 71% 59% 76% Access to finance-capital 49% 54% 54% 65% 38% 60% 60% 44% 41% 60% 38% 51% 49% 81% 52% 57% 67% 57% Lack of incentives 59% 59% 54% 70% 43% 44% 36% 46% 41% 57% 64% 47% 67% 57% 50% 51% 57% 57% Labor market inflexibility 45% 46% 52% 48% 58% 65% 43% 59% 43% 55% 48% 44% 49% 47% 40% 37% 51% 41% Government regulation and compliance requirements 57% 54% 38% 26% 57% 47% 47% 35% 43% 48% 42% 58% 29% 30% 56% 29% 45% 40% Support for innovation 47% 39% 38% 30% 43% 42% 53% 44% 57% 29% 46% 44% 41% 21% 50% 55% 22% 29% What do you think of the actions taken by the government in your country to support entrepreneurial innovation? Relevant and efficient actions are taken 25% 15% 28% 22% 43% 25% 13% 35% 35% 22% 28% 29% 24% 13% 22% 29% 25% 23% Actions are taken but they are not relevant or efficient 37% 47% 52% 39% 47% 47% 58% 48% 55% 36% 30% 44% 53% 53% 64% 57% 37% 39% Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% With regard to supporting your innovation agenda, what priority actions do you expect from the government in your country? Ranked within Top 3 Tax incentives 47% 47% 36% 48% 23% 37% 49% 38% 37% 57% 44% 42% 37% 51% 20% 18% 45% 46% ‘Small Business Act ‘ 37% 34% 28% 50% 26% 26% 32% 27% 31% 47% 30% 31% 29% 42% 30% 31% 31% 43% Reducing red tape and regulation for entrepreneurs 25% 31% 24% 44% 13% 39% 34% 35% 10% 33% 18% 24% 25% 53% 10% 20% 35% 39% Development of public bank to finance entrepreneurs and small and medium enterprises 29% 14% 24% 20% 30% 33% 21% 22% 27% 36% 28% 24% 33% 28% 30% 24% 37% 15% Opening of public procurement to innovative small and medium enterprises 29% 22% 24% 19% 19% 16% 17% 19% 25% 17% 36% 33% 24% 28% 32% 37% 24% 19% Supportive environment for business angels and venture capital funds 22% 24% 22% 24% 34% 19% 21% 27% 35% 7% 26% 13% 24% 21% 36% 31% 20% 17% Development of technology education and training 27% 27% 28% 15% 9% 32% 15% 27% 31% 16% 22% 24% 16% 25% 22% 25% 14% 26% Appendix 53
  • 115. 54 Argentina Australia Brazil Canada China France Germany India Indonesia Italy Japan Mexico Russia South Africa South Korea Turkey UK US Public investment in technology infrastructure 24% 17% 22% 22% 13% 25% 28% 13% 18% 29% 18% 27% 18% 9% 20% 20% 18% 18% Development of local innovation ecosystems 12% 22% 18% 11% 34% 18% 11% 29% 14% 19% 16% 24% 22% 2% 24% 25% 25% 12% Public investment in R&D 10% 14% 18% 17% 23% 19% 17% 24% 16% 9% 18% 11% 18% 13% 22% 16% 27% 19% Improvement of Intellectual Property rights 16% 19% 18% 17% 30% 19% 17% 13% 20% 9% 8% 18% 27% 6% 16% 16% 10% 18% Open Data promotion 18% 10% 18% 7% 32% 11% 19% 14% 20% 14% 22% 18% 12% 17% 18% 25% 8% 15% Improve immigration policy for skilled workers 4% 20% 20% 6% 13% 7% 19% 13% 16% 9% 14% 13% 16% 6% 20% 12% 6% 16% What do you think of the actions taken by the government in your country to support entrepreneurs’ international expansion? Relevant and efficient actions are taken 14% 22% 28% 19% 43% 18% 13% 35% 35% 17% 20% 33% 14% 9% 18% 25% 22% 15% Actions are taken but they are not relevant or efficient 43% 39% 54% 31% 45% 44% 36% 41% 55% 45% 34% 42% 63% 34% 64% 53% 29% 37% No real action taken 43% 39% 18% 50% 11% 39% 51% 24% 10% 38% 46% 25% 24% 57% 18% 22% 49% 48% Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% With regard to supporting entrepreneurs’ international expansion, what priority actions do you expect from G20 governments? Reduce trade barriers 47% 31% 58% 39% 34% 37% 30% 41% 41% 43% 30% 47% 51% 49% 38% 43% 37% 30% Develop access to international finance-funding 41% 42% 32% 46% 32% 23% 17% 54% 41% 59% 32% 58% 49% 43% 46% 41% 27% 20% Facilitate identification of local partners-alliances 33% 37% 46% 31% 43% 33% 38% 49% 49% 43% 40% 47% 41% 30% 48% 45% 29% 19% Reduce red tapes for exports 33% 37% 32% 31% 26% 30% 26% 35% 45% 36% 24% 35% 43% 42% 28% 20% 37% 27% Remove Foreign Direct Investment restrictions 35% 29% 36% 22% 55% 28% 25% 40% 29% 34% 38% 27% 27% 28% 44% 37% 22% 18% Strengthen international rule of law 24% 32% 32% 19% 43% 28% 34% 29% 47% 24% 28% 29% 20% 25% 30% 43% 31% 28% Facilitate mobility of talents 39% 20% 46% 17% 43% 32% 34% 33% 35% 29% 24% 35% 33% 21% 36% 29% 22% 24% At least one of these actions expected 84% 76% 94% 69% 92% 70% 68% 94% 96% 90% 72% 93% 88% 79% 90% 86% 69% 55% None of these actions expected 16% 24% 6% 31% 8% 30% 32% 6% 4% 10% 28% 7% 12% 21% 10% 14% 31% 45% What do you think of the actions taken by the government in your country to support youth job creation? Relevant and efficient actions are taken 18% 25% 34% 20% 57% 18% 23% 41% 25% 17% 28% 33% 25% 11% 24% 37% 24% 13% Actions are taken but they are not relevant or efficient 45% 49% 52% 43% 28% 47% 42% 37% 63% 36% 28% 42% 57% 43% 50% 39% 39% 43% No real action taken 37% 25% 14% 37% 15% 35% 36% 22% 12% 47% 44% 25% 18% 45% 26% 24% 37% 43% Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
  • 116. Argentina Australia Brazil Canada China France Germany India Indonesia Italy Japan Mexico Russia South Africa South Korea Turkey UK US What priority actions do you expect from the government in your country to support youth job creation by your company? Ranked within top 3 Develop financial incentives, e.g., tax reduction 43% 49% 28% 33% 34% 47% 38% 41% 33% 53% 26% 38% 22% 40% 28% 37% 43% 37% Promote vocational training- improve apprenticeship 43% 41% 28% 31% 34% 21% 15% 40% 35% 28% 24% 40% 31% 32% 24% 25% 37% 41% Increase labor market flexibility 41% 25% 32% 19% 23% 40% 26% 32% 31% 40% 46% 38% 35% 23% 34% 24% 29% 18% Develop entrepreneurial skills 25% 24% 32% 43% 30% 39% 32% 29% 47% 29% 22% 22% 22% 45% 24% 10% 29% 24% Improve equity and access for job seekers 20% 32% 32% 33% 36% 19% 43% 25% 16% 28% 32% 29% 31% 17% 34% 31% 31% 27% Enable lifelong learning and development of skills 8% 27% 28% 26% 26% 19% 32% 27% 27% 16% 26% 22% 24% 26% 38% 31% 39% 34% Promote direct involvement of businesses in tertiary educational system 33% 25% 28% 20% 36% 25% 21% 25% 14% 33% 18% 27% 22% 17% 30% 25% 31% 22% Increase Science-Technology- Engineering and Maths graduates 29% 24% 18% 15% 21% 19% 17% 17% 29% 14% 34% 29% 33% 26% 20% 37% 6% 35% Remove red tape 16% 34% 16% 37% 11% 16% 19% 21% 12% 16% 18% 7% 25% 38% 20% 16% 27% 33% Facilitate mobility of talents 24% 5% 28% 22% 15% 40% 38% 21% 33% 28% 24% 24% 25% 11% 28% 25% 14% 12% Increase transferability of skills by standardizing certifications and qualifications 18% 14% 30% 20% 34% 14% 19% 22% 22% 17% 30% 24% 29% 25% 20% 37% 12% 18% Appendix 55
  • 117. About Accenture Accenture is a global management consulting, technology services and outsourcing company, with more than 293,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page is www.accenture.com. About Accenture Research Accenture Research is Accenture’s global organization devoted to economic and strategic studies. The staff consists of 200 professionals in economics, surveys and data modeling from Accenture’s principal offices in America, Europe, Africa and Asia/Pacific. About Accenture Technology Labs Accenture Technology Labs, the dedicated technology research and development (R&D) organization within Accenture, has been turning technology innovation into business results for more than 20 years. Our R&D team explores new and emerging technologies to create a vision of how technology will shape the future and invent the next wave of cutting-edge business solutions. Using our knowledge of the technology ecosystem, our Open Innovation team help clients connect to the leading innovative startups to identify relevant technology trends, fuel innovation internally and develop transformative programs. Technology Labs help clients innovate to achieve high performance. The Labs are located in Silicon Valley, California; Sophia Antipolis, France; Arlington, Virginia; Beijing, China and Bangalore, India. For more information follow us @AccentureLabs and visit www.accenture.com/technologylabs. Copyright © 2014 Accenture All rights reserved. Accenture, its logo and High Performance Delivered are trademarks of Accenture.

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