The health of an economy at the local and national level has always relied on entrepreneurial activity and growth. Entrepreneurs, after all, have the power to grow business ideas into successful companies, creating new jobs in the process. Many of the global Fortune 500 entities were once an entrepreneurial dream and small business. Inc.com published an article entitled, Entrepreneurs Rule the World, that touched on a TEDGlobal presentation given by Robert Neuwirth saying, “Neuwirth displayed a series of slides that should have changed the way everyone thinks about the global economy. Not skyscrapers and shopping malls, but street vendors, garbage dumps, and umbrella stands. This informal economy–which Neuwirth dubs ‘the stealth of nations’–is worth $10 trillion. That makes it the second largest economy in the world…”.
Entrepreneurship is the foundation of all business and innovation. Which is why fostering it promotes collaboration between business sectors, investors, civil society, universities, and philanthropists to the benefit of society as a whole. Global investors recognize start-ups as an efficient place to park their capital. The reason? Successful start-ups create ripples of economic value up and down the supply chain.
Consider the most recent trend started by entrepreneurs: businesses built on the principle of sharing economy, which can be global in scope, but local in terms of where the profits end up. The middlemen—the Ubers, eBays and Airbnbs of this world—share some multinational-like characteristics. However, they are local in their ability to connect and provide services that meet a desired need in a localized way.
Companies such as Uber and Airbnb are creating new forms of communities. All these marketplaces rely on reputation, trust, and reciprocity to thrive. This type of trust-building is called social proof. The eBay marketplace is a great example of it in action: millions of people who do not know each other feel comfortable enough to engage in transactions of trust. It is easier to trust someone when there is ample evidence that hundreds or thousands of other people in the community trust that individual, too.
As a recent phenomenon, emerging and developed markets have fostered these kinds of companies on an almost equal footing. This partly explains why, for example, South East Asian homegrown ride hailing start-ups like Grab have been able to drive Uber out of the region. The rise of the sharing economy and peer-to-peer marketplaces like Lending Club demonstrate a move toward cooperative relationships and more collaborative forms of consumption. Companies such as Uber and Airbnb are creating new forms of communities.
Sharing economies today, something entirely different and revolutionary tomorrow – that is the power and necessity of innovation through entrepreneurship. As we foster that entrepreneurial spirit within our own organizations, we can harness that power and become visionaries within our own industries and markets. Learn more about creating an environment that facilitates that kind of innovation within your business by visiting my website today.