Global Leadership Conference Andrea Vogel EMEIA Market Leader, Strategic Growth Markets

Transcription

1 Global Leadership Conference 2014 Andrea Vogel EMEIA Market Leader, Strategic Growth Markets

2 The EY G20 Entrepreneurship Barometer 2013 The power of three Together, governments, entrepreneurs and corporations can spur growth across the G20

3 The EY G20 Entrepreneurship Barometer Our analysis of the entrepreneurial ecosystems across the G20 countries, set against five pillars, as co-developed with the G20 Young Entrepreneurs Alliance (YEA) 5 Pillars: Access to funding Entrepreneurship culture Tax and regulation Education and training Coordinated support Page 2

4 Supporting entrepreneurship a G20 imperative Entrepreneurs provide one of the main engines of growth in any healthy economy Entrepreneurs create jobs and drive growth. Today, their contribution is more important than ever. But they need to be given the tools and environment that will enable them to succeed. The power of three governments, entrepreneurs and corporations need to work together to foster sustainable growth. Page 3

5 A call to action the power of three For a thriving entrepreneurial ecosystem, governments, entrepreneurs and corporations must work together. Page 4

6 Introducing the EY G20 Entrepreneurship Barometer 2013 Page 5

7 The entrepreneurial development framework: five pillars that foster entrepreneurship Page 6

8 The EY guide to funding entrepreneurial businesses Page 7

9 Overall country rankings The following represents the overall ranking of the G20 countries by quartile.* Quartile 1 represents the countries that are leading in fostering entrepreneurship. Each of the five pillars (Access to funding, entrepreneurship culture, tax and regulation, education and training, coordinated support was weighted equally to provide an overall country ranking. * Note: Countries are listed in alphabetical order per quartile. Page 8

10 Access to funding G20 entrepreneurs views: 70% say that it is difficult for entrepreneurs to access funding in their country. Half say improved access to funding is the most effective way to accelerate entrepreneurship. Top-ranked country: Page 9

11 Access to funding key insights Banks need a new lending model for entrepreneurs. Government funding can help close the funding gap. Innovation is required to broaden the early-stage funding ecosystem. Capital without mentorship is lost capital. Corporations can be encouraged to help fill gaps in the funding ecosystem. Almost half (46%) of entrepreneurs that are aware of crowdfunding say that it has improved in their country. Page 10

12 Access to funding: a call to action Government action: where to focus Conduct a self-assessment of your entrepreneurial landscape Provide mentoring along with capital Boost access to funding Support stock markets The entrepreneur perspective: key issues to consider Ensure that your capital source is the right one Consider stock markets A corporate perspective Set up a corporate venturing unit Trade with entrepreneurs Page 11

13 Entrepreneurship culture G20 entrepreneurs view: Only 15% of entrepreneurs say their country has a culture that fully supports entrepreneurship. Top-ranked country: Page 12

14 Entrepreneurship culture key insights Greater emphasis should be placed on the benefits of entrepreneurship. Celebrating success is inspirational and effective. Helping entrepreneurs recover from failure removes a cultural barrier to business creation. Women and the young can accelerate entrepreneurship. Migrant talent should be welcomed. 84% think that raising awareness of entrepreneurs role as job creators would significantly improve attitudes to entrepreneurship. Two thirds (67%) view business failure as a negative experience, with only a quarter seeing it as an opportunity to learn. Page 13

15 Entrepreneurship culture: a call to action Government action: where to focus Promote the power and value of entrepreneurship as the engine of economic growth Remove the stigma of failure Create networking opportunities The entrepreneur perspective: key issues to consider Share your story Help the next generation of entrepreneurs A corporate perspective Sponsor incubators and accelerators Recognize the contributions and success of entrepreneurs Page 14

16 Tax and regulation G20 entrepreneurs view: 83% say that an increase in tax incentives focused on innovation would improve the health of entrepreneurship in their country. Top-ranked country: Page 15

17 Tax and regulation key insights It is becoming easier to start a business in many markets. Tax cuts and simplification top the entrepreneurial wish list. Policymakers must target tax and regulatory reform at every stage of the growth journey. Entrepreneurs want help in navigating regulation and a bigger voice in its development. 84% want tax systems to be simplified. 38% say they want the ability to voice their concerns on business regulations, making this their top suggestion for how countries could improve their regulatory environment. Page 16

18 Tax and regulation: a call to action Government action: where to focus Reduce the indirect tax burden Simplify the tax system Make it easier to navigate the tax system Give entrepreneurs a voice on regulation Simplify insolvency rules Stimulate innovation Page 17

19 Tax and regulation: a call to action The entrepreneur perspective: key issues to consider Use tax simplification methods to improve cash flow and decrease compliance costs associated with paying taxes Explore government resources Know your R&D Incentives Get involved A corporate perspective Share your public policy experience Drive change Page 18

20 Education and training G20 entrepreneurs view: Sharing success stories is ranked as the most impactful way to inspire people to become entrepreneurs. Top-ranked country: Page 19

21 Education and training key insights Formal entrepreneurship education is improving across the G20. Mentoring, coaching and informal education is also getting better. Entrepreneurs believe the skills needed to run a business can be taught. Integrating entrepreneurship education into the school environment will improve its perception. 84% agree or partly agree that they need specific education to become successful entrepreneurs. 52% say that university and business school courses for entrepreneurship have improved in their country. Page 20

22 Education and training: a call to action Government action: where to focus Embed entrepreneurial learning into the school curriculum Support young people who chose an entrepreneurial career Encourage life long learning for entrepreneurs The entrepreneur perspective: key issues to consider Look for the educational opportunities that suit your needs Seek out and learn from other entrepreneurs Give back to help others A corporate perspective Expand internship programs to provide more hands-on experience Mentor entrepreneurs Page 21

23 Coordinated support G20 entrepreneurs view: Business incubators are a top-ranked tool for accelerating entrepreneurship, according to 36% of entrepreneurs surveyed. Top-ranked country: Page 22

24 Coordinated support key insights Coordinated support creates the foundation for entrepreneurial success. Access to government start-up programs is deteriorating. Business incubators remain extremely important. Clusters can thrive with the right kind of support. China has stalled in a number of key areas where other BRIC nations are improving. Entrepreneurs prioritize funding ahead of other forms of government support. Page 23

25 Coordinated support: a call to action Government action: where to focus Create clusters to accelerate entrepreneurship Build stronger links between different players in the ecosystem Support and improve incubators and accelerators The entrepreneur perspective: key issues to consider Capitalize on networks Give back Join an incubator or accelerator Consider your location carefully NGOs and not-for-profits play an important role A corporate perspective Access innovation Connect with entrepreneurs Page 24

26 Resources Download the full report and explore our charting tool on Page 25

27 Innovating for the next 3 billion The rise of the global middle class - and how to capitalize on it

28 About Innovating for the next 3 billion Based on a survey of 547 executives from around the world In-depth interviews with some of the world s leading entrepreneurs, senior executives and thinkers: Explores: scale of the opportunity and approaches companies are taking to develop affordable products to meet the needs of customers on lower incomes Concludes: with a model that describes the necessary capabilities for companies seeking to target the next 3 billion consumers Page 27

29 The next 3 billion... Rapid-growth markets in Africa, Asia, Eastern Europe, Latin America and the Middle East are playing an increasingly dominant role in the global economy. The middle class in Asia alone = 525 million people (more than the entire European Union). Between now and 2030, an additional 3 billion people globally will enter this income bracket. We call this emerging demographic the next 3 billion. Page 28

30 The opportunity Between 2009 and 2030, demand from the global middle class could grow from US$21 trillion to US$56 trillion. This represents a valuable opportunity. Many companies will need to: Understand the unmet needs of new middle-income customers Create different pricing and distribution strategies for these markets Rethink their product and service offerings to meet these needs and the new customers characteristics Create entirely new products and services tailored to these customers Page 29

31 Key research findings 1. Innovating for the next 3 billion is a major opportunity, but companies have to be realistic about the challenges. 2. Deep customer insight and organizational agility are key to meeting the needs of the next 3 billion. 3. Companies must balance the need for local customization with global scale. 4. Understand that in the current economy, low-cost innovations are not just for rapid-growth markets. 5. Successful innovation in rapid-growth markets goes far beyond R&D. 6. Local companies have the upper hand in serving lower-income customers, but multinationals are gaining ground. Page 30

32 The innovation capabilities model

33 The innovation capabilities model Page 32

34 1. Customer insight Understanding customer needs requires resources on the ground in local markets. This is why companies should... At a local level: At a global level: Have resources available to observe potential customers and assess where their unmet needs lie Use analytics and technology to gather information about specific markets and turn this into actionable insight Develop the capability to conduct indepth research, including extensive ethnographic research and qualitative fieldwork Engage customers and treat them as partners and collaborators in the innovation process Conduct quantitative research and build a rigorous understanding of market size and expected customer behaviour Spot linkages across markets and derive economies of scale from reapplying knowledge about customer needs

35 2. Research and development Meeting the needs of the next 3 billion will require companies to... At a local level: Develop an increasing proportion of their R&D close to where these customers are located in rapidgrowth markets Develop reverse engineering, where affordability forms the baseline to develop new products and services Make sure that local R&D centers have autonomy to make their own decisions about which projects to pursue Put in place mechanisms for new ideas to reach decision-makers, regardless of where in the organization they originate At a global level: Set up global innovation networks that link R&D centers across both developed and rapid-growth markets to share relevant intellectual property Think about platform technologies that are globally relevant and that can be combined with local components at the point of delivery Make decisions about how to allocate R&D resources around the globe and move them from one location to another as the need arises

36 3. People and culture Managing talent and expertise are critical to successfully innovating for this market... At a local level: At a global level: Delegate decision-making responsibility to local teams in rapidgrowth markets Ensure that local managers have the ability to make recruitment decisions Be able to develop new product or service ideas to meet local needs Embed P&L responsibility to ensure that managers have accountability Set pay and reward structures for local teams that are appropriate for the pace and growth rate of the market Manage talent globally so that managers can be rotated among key markets and gain experience across diverse business environments Work to build a culture and set of values that are global in scope Develop a global mindset and the ability to tolerate ambiguity and integrate multiple perspectives Understand interdependencies among different regions and how decisions made in one region will affect another

37 4. Operations and business model To be successful in this segment, products need to be affordable and accessible. Getting the business model right and ensuring that operations are optimized across the value chain is therefore critical. Companies need to... At a local level: At a global level: Select local partners carefully across every stage of the value chain Ensure operations are highly efficient to lower cost and maintain margins Understand the needs of local customers and ensure that pricing and the business model are appropriate Develop the agility to respond quickly to new opportunities and risks Have clear policies, including risk management and compliance frameworks Ensure accountability and ethical behaviour across the value chain Use global supply chain and CRM systems to optimize the value chain and ensure that it is efficient and resilient Decide what to localize and to maintain at a global level of the value chain

38 Closing remarks Understanding and developing products and services for rapid-growth markets is a strategic priority that cannot be ignored. Innovating for the next 3 billion means formulating a rapid-growth market strategy while keeping a global perspective. Efficiency and adaptation are key companies should aim to recognize cross-pollination opportunities, identify key similarities and adapt to increasingly integrated market forces. Product development and strategy execution needs to be localized, but can draw on global resources and re-apply ideas across wider markets. Page 37

39 Thank you

40 EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and 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. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. About EY s Strategic Growth Markets Network EY s worldwide Strategic Growth Markets Network is dedicated to 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. ey.com/sgm 2013 EYGM Limited. All Rights Reserved. EYG no. CY0582 ED 0715 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 Page 39