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FT.Com / Columnists / Luke Johnson

Entrepreneurs of the 21st century are different. The world of business has changed dramatically since I entered it in the 1980s, and the rules of the game have been radically rewritten.

An important factor has been the all-pervading influence of the internet. A high proportion of start-ups are exclusively online or, at least, dependent on the web. Various consequences flow from this digital revolution that affect the very nature of a business. It means you can test an idea quickly and cheaply and, if the trial does not work, you can reinvent it or just shut it down. Thus feedback is much more rapid and failure is much less expensive than it used to be. I would guess that most young entrepreneurs have experimented more than we would have done at their age.

Online, all businesses are potentially international. This helps new entrepreneurs think about overseas opportunities from the beginning. The march of globalisation fits with this attitude. It makes sense to build for a world market if you can. A company such as London-based card printing specialist Moo.com[1] was designed to serve countries outside the UK from its early days.

Indeed, the word “scaleable” only came into common usage about a decade ago, as did the phrase “going viral”. But what this means in practical terms is that a 26-year-old such as Mark Zuckerberg can create a 500m-strong community with Facebook – employing just 1,000 staff. Facebook is also an example of how investors are willing – in certain circumstances – to back projects that have minimal revenue, following a belief that a lucrative business model will emerge in due course, as it did with Google.

Every young company now adopts social networking as one of its prime marketing tools. An understanding of how to use Facebook, Twitter, Foursquare and the rest is critical to the success of almost any brand appealing to the early-adopter crowd. The rapid embrace of each new wave of technology has become the new normal for all real go-getters. Things used to evolve much more gradually.

Start-ups are far more likely to be undertaken by graduates than they used to be. In the past six years in the UK, there has been a 46 per cent jump in the number of graduates describing themselves as freelance or self-employed. I am sure that trend will continue, partly because comfortable jobs are much harder to come by. Of course, many more people attend university now; yet when I left Oxford, it was seen by many as “wasting” a degree to want to create a business.

Female entrepreneurs are much more common than in the past, with almost one in three UK start-ups in 2009 founded by a woman. I suspect that ratio was more like one in 10 a couple of decades ago. Now women are much more confident and ambitious in their careers, and there are plenty of role models of high achievers in the workplace. I currently back two companies run by women – 10 years ago it was none.

Generally, the entrepreneurial universe is more diverse than ever. Ethnic minorities were always over-represented (relative to the general population) among the self-employed, because of culture and prejudice. But my observations are that the backgrounds of business founders in 2011 are more heterogeneous than ever. Drawing from such a varied gene pool can only be a good thing and brings a much broader experience to the fray.

Most of these developments are positive – economically and socially. There are more entrepreneurs, more diverse entrepreneurs, better educated entrepreneurs, more digital and more collaborative entrepreneurs. I approve of each of these advances. Yet I worry about one aspect of all this enterprise: job creation. Many of these businesses need few staff – their whole philosophy is to use computers to automate everything they can. And frequently they subcontract abroad those elements that require much labour input. Emerging tech and service companies do not generate well-paid, high-skill employment on the same scale as industrial concerns once did. We shall need a heck of a lot of Generation Y entrepreneurs to cure the crisis of worklessness in the west.

lukej@riskcapitalpartners.co.uk[2]

The writer runs Risk Capital Partners, a private equity firm, and is chairman of the Royal Society of Arts