Companies launched by unemployed people are successful

Starting a company can be a good solution for unemployed people both for themself and for the economy. This is the conclusion of a recently released study led by Professor Marc Gruber, holder of EPFL’s Entrepreneurship and Technology Commercialization Chair. Conducted with the support of several regional employment agencies, this study analysed in detail and for the first time which unemployed individuals are starting their own businesses, what factors drive them to take this step, and how their companies are developing. The scientists compared data from several countries – Switzerland, Germany, France and Belgium.

The study showed start Start-ups launched by unemployed persons generate employment. In Switzerland, these enterprises created on average 2.2 jobs after three years, in addition to the position of the company’s founder, and thus they’re potentially taking other people off the unemployment rolls. In addition, they have a very encouraging survival rate, even higher in Switzerland than in the other countries we studied: 88% of them are still viable after three years, compared with 80% in Germany and 77% in Belgium.

Two factors were identified which favourably influence success: an idea with growth potential and a founder with prior management experience. You have to know how to stay afloat in a competitive environment and understand how your competitors are handling it, as well. The results of the study show that specific expertise in the new company’s domain is less critical for these “high performers,” because they can always acquire knowledge along the way or get outside support by bringing in skilled collaborators.