|  10.08.2016

Disruption at Work or How Entrepreneurs Are Driving Job Growth

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EY’s survey seeks to understand more about what causes the greatest job growth. Is it merely financial growth, or is it aligned to an organization’s behavioral characteristics? Are there patterns that correlate between business life cycle and workforce growth? Are there significant differences between sectors? Do women entrepreneurs grow and hire more than their male peers? Do larger businesses behave differently? Is there significant difference between entrepreneurs located in fast-growth economies and those headquartered in low-growth areas?


Schumpeter distinguished between ‘replicative’ entrepreneurs, who enter a market and make incremental improvements to compete, and ‘innovative’ entrepreneurs, who upset or disrupt entire business sectors. In this survey, EY found that the most disruptive and innovative entrepreneurs are both growing and hiring at much faster rates than peers who follow more replicative approaches.


These disruptive businesses, which combined account for more than half of all entrepreneurs surveyed, are also more likely to enter new markets, change business models, create more globalized workforces and hire more young people than the rest of the sample.


The results provide a global snapshot of the economic landscape as it is being created by its most dynamic agents. They answer key questions about who the world’s most disruptive and innovative businesses are, as well as the locations and industry sectors where they are most likely to be found.


In doing so, there are lessons for governments and policymakers, for large market-leading corporations who face threats from disruptive start-ups, and for young businesses setting out along the path to growth. Not only are survey respondents in the EY Global Job Creation Survey more optimistic about workforce increases than they were in 2015, but there is a substantive difference between the hiring expectations of large established companies and surveyed entrepreneurs.


While 72% of executives surveyed in EY’s Capital Confidence Barometer (CCB) expect either the same or reduced headcount, only 5% of entrepreneurs in EY’s Job Creation Survey think their overall workforce will decrease in the next year. Entrepreneurs were twice as likely as large enterprises to anticipate hiring in the next 12 months.


Disruptive innovation, the term coined by Harvard Business School Professor Clayton Christensen, is both destructive and creative. Disruptive entrepreneurs displace an existing market, industry or technology, producing something new and more efficient. In doing so, they capture value, but do they also create jobs?


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