Professor Manisha Rajadhyaksha

Global Entrepreneurship

20 percent of new companies fail in their first year

Only 50 percent survive through their fifth year
There are close to 400 million entrepreneurs worldwide.

Most entrepreneurial countries in the world?

The United States has been recognized as the world's most entrepreneurial country,
according to the CEOWORLD magazine Entrepreneurship Index, 2019, while the United
Kingdom and Israel placed second and third, respectively (Aug 14, 2019)

Money-related issues were the most common reasons the funded startups failed
Combined 40% citing running out of cash or a lack of funding as a reason for failure
Only 28% of startups without funding blamed a lack of funding or running out of cash for
their shutdown

Definition of global entrepreneur: A global entrepreneur seeks out and conducts new and
innovative business activities across national borders. These activities may consist of
exporting, licensing, opening a new sales office, or acquiring another venture.
Present world where all the major business functions in the value chain are highly globalized
and deeply integrated.
80 percent of the world’s GDP will be sold across international borders by 2027, compared to
about 20 percent in 2001. Multinational business activity will grow from approximately $5
trillion to $70 trillion by 2027 (McKinsey)

Global mindset:
A global mindset is a way of being rather than a set of skills. It is an orientation and a state of
mind able to understand a product, a business, an industry sector, or a particular market, on a
global basis.
The executive with a global mindset has the ability to see across multiple territories, focusing
on “commonalties across many markets.”
Having a global mindset means the ability to scan the world from a broad perspective;
“always looking for unexpected trends and opportunities that may constitute a threat or an
opportunity to achieve personal, professional or organizational objectives.”

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Global expansion favors smaller, entrepreneurial companies. It gives them access to capital,
technology, talent, and markets that previously only big firms could reach.
Over 63,000 (77%) of all the companies involved in exporting from the United States had
fewer than 100 employees.

Benefits to Going Global

There are many benefits for entrepreneurs participating in global business activities. We
group them in three categories: strategic, financial, and production related.

Examples of strategic benefits are:

▪ enhancing domestic competitiveness
▪ reduction of dependence on existing markets
▪ capitalizing on the growth potential of the new country market and neighboring
countries
▪ protecting foreign markets
▪ stretching and building marketing capability
▪ global brand building and awareness
▪ finding new talent
▪ transferring competitive information and new product ideas from those markets to
other markets, or what we call “learning local and share global” activities

Examples of financial benefits include:

▪ finding new customers
▪ increasing profits and sales
▪ earning a greater return from set of core competencies
▪ increasing the universe of potential investors
▪ capitalizing on tax advantages
▪ minimizing impact of seasonalities in local markets

Production-related benefits include:

▪ guaranteeing supply of raw materials
▪ acquiring technology and R&D capabilities
▪ cutting costs through global outsourcing
▪ improving purchasing power for customers buying locally
▪ realizing greater experience curve economies in production
▪ extending lifecycle for current products or services
▪ selling excess production capacity

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Case In Point:
Starbucks Coffee – Going Global One Cup at a Time
Howard Schultz, who led the purchase of Seattle-based Starbucks Coffee in 1987 for
$250,000, later boasted, “Starbucks is going to be a global brand, in the same genre as Coke
and Disney.” By 2003, Starbucks has grown from 15 stores and 100 employees in 1987 to
more than 65,000 employees serving more than 22 million customers worldwide each week.
It is the leading retailer, roaster and brand of specialty coffee in the world, earning more than
$3.3 billion in revenues from 6,200 retail locations in 30 countries.
It was recognized by Fortune magazine as “One of the Most Recognized and Respected
Global Companies.” During the annual shareholders meeting in early 2003, Starbucks
Corporation celebrated the worldwide acceptance of its brand by customers around the world.
“Over the past several years Starbucks has become an integral part of customers’ everyday
lives,” said Schultz.
In 1983 Schultz traveled to Italy, where he was impressed with the popularity of espresso
bars in Milan. He saw the potential in Seattle to develop a similar coffee bar culture and a
couple of years later he founded Il Giornale, a shop that offered brewed coffee and espresso
beverages made from Starbucks coffee beans. In 1987, with the backing of local angel
investors, Il Giornale acquired the assets of Starbucks and changed its name to Starbucks
Corporation.
By the end of the year they had 17 stores, with one in Vancouver, BC. In 1995 Starbucks
Coffee International was created and formed a joint venture with SAZABY Inc., to develop
Starbucks coffeehouses in Japan. A few years later they acquired the Seattle Coffee Company
in the United Kingdom with more than 60 retail locations.
Ten years after Schultz purchased the company, Starbucks had reached $1 billion in global
sales and he transitioned from chairman and CEO to chairman and chief global strategist.
SOURCE: Roadmap To Entrepreneurial Success

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What is global entrepreneurship index?

2015 2019

United States 85.00 86.80

Switzerland 68.60 82.20

Canada 81.50 80.40

Denmark 71.40 79.30

UK 77.5
Australia 73.1
Iceland 73
Netherlands 72.3
Ireland 71.3
Finland 70.2
Sweden 70.2
China (rank 34) 45.9
India (rank 78) 25.1

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This interactive data explorer allows you to view the GEI results for a given country in three
ways. The first table shows the country’s GEI results on the variable level, with colors
indicating which quartile the score falls into. The spider chart shows country performance
compared to up to three benchmark countries. The bottom table provides a guide for policy
formulation and answers the question “where should we put our resources to improve our
GEI score?”

https://thegedi.org/tool/

PILLARS INSTITUTIONAL VARIA

Opportunity Perception 0.29 Market Agglomeration

Start-up Skills 0.16 Tertiary Education

Entrepreneurial Risk Acceptance 0.39 Business Risk

Attitudes Networking 0.11 Internet Usage
Cultural Support 0.18 Corruption
Entrepreneurial Attitudes 20.37
Opportunity Startup 0.32 Economic Freedom
Technology Absorption 0.03 Tech Absorption
Entrepreneurial
Human Capital 0.23 Staff Training
Abilities
Competition 0.65 Market Dominance
Entrepreneurial Abilities 25.30
Product Innovation 0.74 Technology Transfer
Process Innovation 0.59 GERD

Entrepreneurial High Growth 0.20 Business Strategy

Aspirations Internationalisation 0.28 Globalization
Risk Capital Depth of Capital Market
Entrepreneurial Aspirations 31.82
GEI 25.83 Institutional
IndiaNetherlandsNorwayGermany1.OpportunityPerception2. StartupSkills3.
RiskAcceptance4.Networking5.
CulturalSupport6.OpportunityStartup7.TechnologyAbsorption8.HumanCapital9.Competition
10. ProductInnovation11. ProcessInnovation12. HighGrowth13.Internationalization14.
RiskCapital1400.250.50.75114. Risk
Capital ● India: 0.172● Netherlands: 0.656● Norway: 0.838● Germany: 0.758Highcharts.co
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