Policies in support of high-growth innovative enterprises. Part 1: Characterisation of innovative high-growth firms
05 - Forschungs- oder Arbeitsbericht
Background and objectives There is evidence that high growth innovative enterprises (HGIEs) contribute decisively to job creation. However, there is a lack of knowledge about HGIE characteristics and policies that could support them. This study contributes new insights for both aspects. Methodology Results in this policy brief are mainly based on a survey of HGIEs in 36 innovative industries in eight countries: Germany, France, the United Kingdom, Poland, Switzerland, the USA, Republic of Korea and Japan. The sample included 580 HGIEs. The survey targeted companies whose number of employees had grown at least one third over three consecutive years in the past five years. For Poland, the target was 22% over two years due to data limitations. Only internal (organic) growth was considered; growth due to mergers and acquisition was not included. The size threshold was ten employees at the beginning of the growth period. The data universe for sampling included 4% HGIEs. HGIE characteristics Age: The majority of HGIEs in the sample were older than ten years. This applied to all countries and sectors. Thus, high growth is apparently not a start-up phenomenon but takes place after the initial struggle of establishing the enterprise in the market. Moreover, in the vast majority of HGIEs high growth started in the past ten years. 13% of the responding firms were found to be spin-offs. Most of them (68%) originated from other companies. This might question the current political focus on spin-offs from public research – or call for enhanced policy measures to support such spin-offs. The dominant type of customers of HGIEs in the sample are other companies. Many HGIEs may thus not be known to the public because they do not sell to households. For the majority of HGIEs the national market is the main market. Many HGIEs may thus have a potential to grow further into international markets. The main factors of high growth appear to be a skilled workforce and directors actively targeting growth. This applies to all countries and almost all sectors. Successful product or service innovation is also important and apparently triggered by strong competition. Three barriers were found to be most severe: (1) Bureaucratic hurdles and regulation, (2) difficult access to finance, and (3) finding skilled employees. This applies to all countries and sectors, while there are also national and sectoral specificities. National specificities Germany had the highest share of HGIE spinoffs with multiple origin. France had the largest HGIE share in the sampled countries. The UK had the largest share of spin-offs (19%, average 14%). Bureaucracy and regulation were found to be the single most important growth barrier in Poland. The share of young HGIEs was found to be largest in the US (21%, average 14%). In Korea, policy preferences for big business seem to be a specific barrier to growth. Access to finance was apparently not a problem for HGIEs in Japan. No notable specificity can be reported for Switzerland. Sectoral specificities In the data universe the shares of HGIEs per industry do not differ much. In all industries with a sufficient number of cases the shares were not higher than 7%. Growth in manufacturing and services is partly driven by different factors: highly skilled employees were judged as more important by service companies, whereas entering new international markets was more important for manufacturers. However, each innovative industry appears to have its own distinct profile of growth factors.
Verlag / Hrsg. Institution
Publications Office of the European Union
Verlagsort / Veranstaltungsort