Innovation and Entrepreneurship: Research Report Series

About the Research

Innovative Companies Can Unlock Solutions for Emerging Markets

Entrepreneurs who lead innovative companies and spearhead transformative solutions are needed to address some of the world’s most pressing issues. Endeavor Insight offers in-depth research on innovation and entrepreneurship across agriculture, healthcare, and clean energy sectors, made possible with support from the Lemelson Foundation, and additional funding for agriculture-specific research by Small Foundation.

These studies evaluate the challenges and opportunities for founders creating positive impact in emerging markets, specifically sub-Saharan Africa and India. Based on data from more than 500 innovative companies and interviews with over 130 entrepreneurs, the research draws lessons from high-performing companies, identifies how they are addressing urgent needs, and analyzes the role of ecosystem actors such as support organizations in enabling their success.

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Entrepreneurial Ecosystems in Agriculture

September 2021

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Innovation and Entrepreneurship in Clean Energy

January 2022

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Innovation and Entrepreneurship in Healthcare

January 2022

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Key Takeaways

A Company’s Innovation Type Influences its Potential Impact

Innovative companies operating in sub-Saharan Africa and India are scaling up their businesses and playing a crucial role in generating progress towards the Sustainable Development Goals (SDGs). Endeavor Insight analyzed three types of innovative companies to understand their different challenges and impact.

Business Process Companies

Software Companies

Invention-Based Enterprises (IBEs)

These different business models are better suited for achieving different types of impact. For example, business process companies excel at driving job creation in local communities. Software firms have an advantage in rapidly scaling up and reaching large numbers of people. Furthermore, invention-based enterprises (IBEs) provide the transformational solutions needed to improve livelihoods and living standards in multiple countries.

High-Performing IBE Teams Have Prior Experience in Tech and Business

Due to the nature of their business models, IBE founders frequently have highly technical or scientific professional backgrounds. However, they often lack business experience and report benefiting from support programs that advise on business matters. Endeavor Insight found that IBEs experience greater success when their founding teams combine technical knowledge with prior business experience. The graph below shows that IBEs that had at least one co-founder with some type of business experience were more likely to raise capital than those that did not.

Note: Figures represent the percentage of IBEs that raised capital, separated by whether or not they had at least one co-founder who possessed each type of work experience prior to the founding of the company. Global Top 1,000 Experience refers to previous employment at one of the largest 1,000 public companies in the world based on Forbes’ methodology. C-Suite or Managerial Experience encompasses work in senior executive or management positions. Finance or Accounting Experience encompasses work in finance or accounting roles. Marketing, Sales, or BizDev Experience encompasses work in marketing, sales, and business development roles. Categories are not mutually exclusive. Sources: Endeavor Insight interviews and analysis; LinkedIn; PitchBook; Crunchbase; Forbes. Sample size: 222 companies for Business Degree; 224 companies for Global Top 1,000 Experience; 211 companies for C-Suite or Managerial, Finance or Accounting, and Marketing, Sales, or BizDev Experience. The sample sizes were dependent on available founder data.

Support for Innovative Companies Does Not Match Founder Needs

While many programs focus on helping companies at early stages, relatively few assist with growth and expansion strategies. Out of the 293 support organizations that supported innovative companies, 204 supported the early stage, 15 supported the growth stage, and 74 supported both. As the graph below shows, this is despite most companies from the research being at the growth stage.

Note: Data on support organizations includes those that served at least one company in the study. Support organizations were categorized according to the stage focus of their programs. “Early” includes the pilot stage, whereas “Growth” includes expansion. Companies were categorized as being at the early stage if they were 0 to 4 years old or at the growth stage if they were 5 or more years old. This data included 533 companies, of which 112 were at the early stage and 421 at the growth stage. Sources: Endeavor Insight interviews and analysis; LinkedIn; PitchBook; Crunchbase; support organization websites. Sample sizes: 293 support organizations and 533 companies.

Founding Team Backgrounds and Resource Absorption

This research also explored the flow of resources going to different founder teams. In the charts below, each bubble represents a company, and its size is proportional to the number of relationships its founders had through which they received mentorship, investment, and or services from support programs. In sub-Saharan Africa, most well-connected companies are expat-led, while in India, most are returnee- or local-led. These differences can have long-term implications for the development of entrepreneurial ecosystems.

Note: Companies were included if they received resources or services from at least 10 investors, mentors, and/or support organizations. Each bubble represents a company, and its size is proportionate to the number of relationships it had with those providers. Empty categories indicate the absence of companies with at least 10 investment or support relationships. Founding teams are defined as “local” if they have no expat or returnee co-founder, “returnee” if they have at least one returnee but no expat co-founder, and “expat” if they have at least one expat co-founder. Sources: Endeavor Insight interviews and analysis; LinkedIn; PitchBook; Crunchbase; company websites. Sample size: 1,896 connections.

Sector Highlights

“Entrepreneurial Ecosystems in Agriculture”
Entrepreneurship evolves differently within value chains, as demonstrated by Endeavor Insight’s comparative analysis of the Kenyan macadamia and Nigerian maize sectors. This report finds that Kenyan macadamia is export-focused and concentrated with expat founders who have strong connections to foreign capital and mentorship, but not necessarily to local actors like farmers. Domestically focused value chains with more local or returnee founders, such as Nigerian maize, succeed more in local social impact.

“Innovation and Entrepreneurship in Clean Energy”
Clean energy encompasses a broad range of industries, with off-grid solar power representing a mature subsector that has achieved wide impact. Endeavor Insight’s research demonstrates that many successful solar companies incorporate elements of both IBEs and service companies by developing innovative physical products and delivering them in an accessible and affordable manner. This report explains how founder-led support programs help up-and-coming entrepreneurs not only with tailored product development, but also with other concerns such as customer access and affordability.

“Innovation and Entrepreneurship in Healthcare”
Endeavor Insight extracts lessons for developing countries from India’s experience in strengthening its national innovation capacity and entrepreneurial ecosystem in healthcare and biotech. The report outlines how the Indian government set up a number of funding opportunities and support agencies for scientists to translate their research to commercial applications. As this research shows, those efforts acted in synergy with local angel investors, university programs and incubators, and international tech transfer partnerships to help entrepreneurs succeed.