Ernst & Young - High-Growth Entrepreneurs Setting Pace for Revenue Growth and Job Creation
Ernst & Young Entrepreneur Of The Year® finalists employ close to 700,000 and generate more than $165 billion in revenue
Despite a persistently high U.S. unemployment rate and sluggish overall economic growth, one segment of the U.S. economy continues to exceed expectations – entrepreneurs. According to data compiled by Ernst & Young LLP from more than 600 finalists of the 2012 US Entrepreneur of the Year® program, innovation-driven entrepreneurs continue to defy the odds, expanding their companies, spurring job growth and creating momentum in an otherwise moribund economy.
Research compiled from these companies, which together employ nearly 700,000 workers, affirms that, nationally, these innovative, expansion-oriented entrepreneurs continue to grow impressively, achieving the following between 2009-2011:
- 30 percent job growth, compared to negative overall U.S. job growth (approx. -1 percent)
- 48 percent revenue growth, compared to overall U.S. revenue growth of 5.6 percent
"These results are proof that entrepreneurs, who are focusing on innovation and new-market expansion, are doing far better than the national averages," said Bryan Pearce, director of the Ernst & Young Entrepreneur of the Year program for the Americas. "These entrepreneurs are more optimistic about the future and are continuing to hire. This positive attitude and forward momentum amidst uncertainty truly characterize the entrepreneurs who have inspired our 26-year-old recognition program. Their confidence led the rate of employment growth among these companies to double between 2010-2011."
Entrepreneur of the Year finalist data spans 26 regions across the US and can also be segmented into nine industry categories. Energy, cleantech and natural resources led the group in employment gains at 49 percent between 2009 and 2011; technology followed at 42 percent and services at 33 percent. Life sciences had the slowest employment growth.
Regional employment growth was led by entrepreneurial companies from the Southeast region, including Alabama, Florida, Georgia and Tennessee, whose employee ranks jumped 71 percent over two years. Rounding out the top three were the Southwest, including Dallas, Texas and the surrounding area, which produced job growth of 42 percent, and the Northeast which turned in 35 percent employment growth.
A separate Ernst & Young global report issued in June that surveyed more than 400 award-winning entrepreneurs worldwide showed that the majority of positions these companies created were filled by experienced employees with university degrees.
Revenue growth among Entrepreneur of the Year finalists was equally impressive. Sectors leading the group in revenue gains between 2009 and 2011 were energy, cleantech and natural resources at 87 percent, technology at 73 percent and retail and consumer products as well as distribution and manufacturing, both at 49 percent. Real estate, construction and lodging had the slowest revenue growth.
Regionally, East Central finalists, consisting of companies based in Ohio, Kentucky, West Virginia, Pennsylvania, Washington D.C, Virginia and Maryland, turned in impressive numbers, with 63 percent revenue growth over the past two years. Also putting up healthy gains were the finalists from the Southwest and Midwest, with revenue growth rates of 53 percent and 50 percent, respectively.
"For almost five years, the U.S. Entrepreneur of the Year awards winners have generated double-digit revenue and employment growth," added Pearce. "Their global mindset and ability to innovate make them the success stories that will keep America competitive."
Impact of access to capital
The Entrepreneur of the Year finalist data also showed significant differences in both employment and revenue growth for companies that acquired funding from private investors over their life-cycles versus those that did not receive outside investment. In fact, companies that received private funding grew revenues at 178 percent and employment at 32% over the past two years.
"Companies' challenges in accessing capital continue to drive a more intense focus on business fundamentals – as banks and other lenders are looking for long and unwavering histories of success when making their decisions," said Herb Engert, Ernst & Young Americas Strategic Growth Markets Leader. "These entrepreneurs have been able to provide evidence of solid year-over-year growth through the worst of the recent global recession. It is heartening to see such determination yield such tremendous success."
About Ernst & Young Entrepreneur of the Year
Ernst & Young Entrepreneur of the Year is the world's most prestigious business award for entrepreneurs. The unique award makes a difference through the way it encourages entrepreneurial activity among those with potential, and recognizes the contribution of people who inspire others with their vision, leadership and achievement. As the first and only truly global award of its kind, Entrepreneur of the Year celebrates those who are building and leading successful, growing and dynamic businesses, recognizing them through regional, national and global awards programs in more than 150 cities in more than 50 countries.
About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 152,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential. Ernst & Young refers to the global organization of 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. This news release has been issued by Ernst & Young LLP, a US client-serving member firm of Ernst & Young Global Limited.