This interview provides more information on the topics discussed in our report Innovating for the next three billion: the rise of the global middle class — and how to capitalize on it.
Linda Rottenberg is the Co-Founder and CEO of Endeavor, a global non-profit organization that pioneered the concept of high-impact entrepreneurship in emerging markets. Endeavor transforms economies by identifying and supporting high-potential entrepreneurs. Here, Ms Rottenberg discusses the environment for entrepreneurship in rapid-growth markets.
How has the environment for entrepreneurship changed in rapid-growth markets?
It is clear that confidence is rising in many of these economies. Fifteen years ago, most of the countries we are operating in didn't even have a word for entrepreneur, let alone any support networks, role models or venture capital. That was really not an environment that was conducive to start-ups but I think this is now changing. At Endeavor, we focus on a segment that we call "high-impact" entrepreneurs, those who are creating innovative, scalable businesses. Making these entrepreneurs the primary focus really showcases their capabilities and creates "a role model effect" that influences other potential entrepreneurs.
What can entrepreneurs offer in rapid-growth markets that traditional multinationals cannot?
Right now there are hundreds of entrepreneurs in rapid-growth markets that are taking advantage of market opportunities, seeing gaps and fulfilling needs. They are filling the void that has been left because multinationals have been too slow to capture these opportunities. In many cases, multinationals have only really operated with the top 1% of spending capability in these markets. Local entrepreneurs understand that there is much more to these markets and are using their creativity and agility to take advantage of those opportunities.
How much of an advantage is it for local entrepreneurs to have in-depth knowledge of their domestic market?
It's hugely important. These local entrepreneurs are just much more alive to the nuances of the market, so when faced with uncertainty or when things go wrong, they can just pivot and throw things out that don't work. Multinationals, on the other hand, have grown up in much more certain environments and they're still learning how to adapt to uncertainty. By the time they have figured it out, everyone else has leapfrogged.
How important is it for entrepreneurs in rapid-growth markets to think internationally?
The most impactful entrepreneurs are the ones who believe that the best way to change their country is to create jobs and wealth, and build a really scalable company. Many of these entrepreneurs operate in highly populous countries, so that gives them a huge domestic market in which to create their business. But if you consider entrepreneurs in smaller rapid-growth markets, then they need to think about scale. They need to understand that some rapid-growth markets are very similar in their conditions and therefore business models could be adapted very quickly. So I've been joking that you need to forget about B2C and B2B. It's E2E -- emerging market to emerging market that matters.
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