They call it the hero’s journey. Over the years, we have come to know it well through characters of the likes of Steve Jobs, Sergey Brin, Jeff Bezos, Mark Zuckerberg, Elon Musk and many others. They all started very small — sometimes in a garage, as the myths go — before ending up too big to fathom.
While their companies disrupted the world economy, their journey triggered a cultural revolution. Young professionals across the world have drawn from Silicon Valley’s customs and habits and embarked on their own hero’s journey.
Policy-makers have taken notice too, supporting the rise of local tech ecosystems to create jobs and attract investment. The underlying assumption is that serial entrepreneurship applied to tech start-ups is a force for good. Start-ups and tech ecosystems have brought a new level of innovation into our societies, and no one can take that away from them. They even actively contributed to the fight against Covid-19, finding solutions to some of the most critical issues caused by the pandemic. However, some of these companies have become so dominant that they’re now being accused of stifling innovation to preserve the status quo.
Start-ups have created millions of jobs worldwide, and they’ve been a real shot in the arm for the job market in the wake of the global financial crisis. But when it comes to the quality of those jobs, that’s another issue. It’s a boon for anyone with coding skills and salesmanship, less so for those that get caught in the perks and perils of the gig economy.
And it’s not just about money, which often remains compelling vis-a-vis other job opportunities, both in developed and developing countries. Job security and job protection have often been on the line too.
The status of those working for the likes of Uber and Deliveroo have been a matter of debate and legal challenges for years. And even assuming that quality is not an issue, quantity is not guaranteed either. The level of failure among start-ups is so high that researchers estimated that retrenching start-ups offset 65% of the new jobs created by their more successful peers across 10 countries in a single year.
Busy competing in a hyper-competitive environment, entrepreneurs seldom look at the bigger picture. “In the rush that accompanies the birth of a new company and its limitless potential, founders rarely pause to think about the harmful ways in which their technology might impact their ecosystem or society at large,” admits Christine Tsai, the CEO of San Francisco-based, early-stage venture capital 500 Startups. They pay little heed to the toll their ventures take on their own person too, with mental wellbeing emerging as a growing issue within the start-up community.
Don’t get me wrong — tech ecosystems are the driving force behind our digitised societies and will continue to get bigger and bigger. As the pandemic cripples legacy players, disruptive start-ups will create new markets and technologies, creating employment and investment opportunities along the way. Whether they will also be a force for good, however, is up for debate.
The mounting wave of environmental, social and governance (ESG) finance has breathed new life into stakeholder capitalism. New metrics are being refined to gauge the performance of businesses beyond financial profits. In other words, jobs themselves are not enough any longer, and nor is investment. Start-ups have a chance to leverage their disruptive technologies and business models to augment their impact on the ecosystem as a whole from an ESG perspective.
It’s not a matter of outcomes, but design. Moving forward, success will also hinge on embedding ESG principles in the same design of the ‘unicorns’ of tomorrow. Modern heroes please take note before embarking on your journey.
This article first appeared in the August/September print edition of fDi Intelligence. View a digital edition of the magazine here.