The roughly 10% of the world’s adults who are entrepreneurs have, for some time, been recognised as significant drivers of economic growth. In a world where numerous countries are struggling to tame unemployment, their potential as job creators will make them all the more important. Many would-be entrepreneurs, however, will fall by the wayside. Although entrepreneurship inevitably involves difficulties and a large number of failures, too often their efforts are hampered by unnecessary barriers.
This UKTI report, written by The Economist Intelligence Unit (EIU), looks at how to foster an entrepreneurial mindset both through education systems and business experience, and what makes entrepreneurs thrive. Drawing on seven in-depth interviews of entrepreneurs and other experts, substantial desk research and two surveys—one of established entrepreneurs and another of young people aged 18 to 25—its key findings include the following.
Entrepreneurship is a highly attractive job option for young people. In the global survey of young people, 30% say that their preferred occupation by 2020 would be running their own business—the most common choice for that question. More generally, 75% are open to starting a company one day, and a further 7% have already done so. A significant proportion of student respondents look to running one’s own business as a source of personal satisfaction in their work (37%) and a way to create something new / innovative (35%). Part of this willingness or desire to become an entrepreneur, however, may be a lack of understanding of the difficulties: over half (57%) of respondents running their own business say that aspiring entrepreneurs underestimate how hard it will be.
Existing entrepreneurs are crucial in developing aspiring ones through mentorship and employment-based learning. Entrepreneurs believe that having mentors who have built up their own firms is vital for success. The growing number of mentorship schemes is testament to the value of such activity. The inevitable constraints of running a business can restrict the time available for external mentoring. Even more helpful, therefore, is running a company in ways that instil and develop entrepreneurship in employees: 81% of entrepreneurs say that they acquired more entrepreneurial skills through work experience than through education.
Personal qualities matter greatly for success, but entrepreneurs are not simply born. Respondents from both surveys for this report rank passion and determination as the most important attributes for entrepreneurial success. Such qualities are difficult or impossible to teach outright—entrepreneurs certainly cannot be manufactured to a template—which helps to explain why those who have started businesses are more likely to say entrepreneurs are born rather than made. On the other hand, those interviewed for this study point to the numerous other factors needed to become successful. Policy choices and the cultural environment can clearly support entrepreneurship by helping aspiring entrepreneurs understand what they need to know to avoid some of the many pitfalls of starting a business.
Education has some positive influence on entrepreneurial success, but this is currently limited. Those surveyed for this report have seemingly contradictory views about the role of education in their development. Among entrepreneurs, for example, 79% say their university education aided them to start their own business. However, very few cite their primary and secondary schooling as a top influence in helping them launch their business. Similarly, nearly half of the 18-25-year-olds surveyed think an academic degree is important to entrepreneurial success (with that share rising to two-thirds in North America), but just 19% say their university is effective at giving students the skills they need to start a business. Successful entrepreneurs, then, can make use of education, but traditional teaching methods risk undermining attitudes conducive to entrepreneurship.
Entrepreneur-friendly education requires a shift not only in how schools and universities teach, but also in what they teach. Experts interviewed for this report recommend a greater focus on problem-solving, communication and networking skills. Rather than just helping those who may one day start a business at the expense of the rest of society, these so-called 21st-century skills are increasingly being promoted within educational circles and by business as beneficial for all students.
