distribution and determinants of high-growth firms in portugal

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Distribution and determinants of high-growth firms in Portugal. International Workshop “High-Growth firms: Local policies and local determinants” 28th March 2012 Copenhagen. Introduction. - PowerPoint PPT Presentation

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  • Distribution and determinants of high-growth firms in PortugalInternational Workshop High-Growth firms: Local policies and local determinants

    28th March 2012Copenhagen

    Elsa SarmentoUniversidade de Aveiro(esarmento@ua.pt)

    Catarina FigueiraCranfield University(catarina.figueira@cranfield.ac.uk )

    Sobrevivncia de Empresas em Portugal

  • IntroductionTarget: Employer Enterprise Population (enterprises with more than one paid worker according the registrars of the Portuguese Social Security System), using the entrepreneurship dataset obtained from Quadros de Pessoal.

    Methodology: The compilation of this dataset follows the methodology applied by Eurostat and OECD (2007) on the classification of what constitutes a High Growth or Gazelle firm.

    Dataset: The derived dataset from the application of this methodology consists of an annual average of 215,903 active employer enterprises, with an annual average of 36,803 births and 23,743 enterprise deaths over the period 1985-2007. In 2007, there were 354.920 employer enterprises employing 3.205.372 workers.

    Gazelle enterprises are a subset of High Growth enterprises which consist of employer enterprises that during a period of at least 5 years have had an annual average growth in turnover or employment, respectively, greater than or equal to 20 % per year.Growth can be measured either by the number of employees or by turnover.

    Sobrevivncia de Empresas em Portugal

  • High turbulenceDecreasing firm average sizeHint at size dependence of growthLess survival abilitySignificant disparities among regionsEffect industry growth in survival ratesFirm dynamics and performanceObserved factors about firm dynamics in Portugal

    Sobrevivncia de Empresas em Portugal

    Grfico1

    102031

    1067414.6162440827

    1108423.842010099217.233539633

    12275410.746828819419.4038483471

    13713311.713671244920.0826934436

    1402932.304332290616.7841588675

    1485785.905497779617.3168302171

    1591757.132280687616.8198523638

    1658604.199780116216.1714699144

    18429711.11600144722.7871316408

    1922424.310976304615.591806161

    1975462.759022482115.2293643

    2135828.117602988716.3698251725

    2288167.132623535716.4175582127

    2442386.739913292815.9205365258

    26868910.011136678226868919.482003357

    2840025.699154040519.094583841

    2997885.558411560518.2468944721

    3065612.259263212730656113.5278133879

    3129382.080173277112.7389450946

    3407758.895372246334077516.100066026

    3440210.952534663612.784103296

    3549203.168120550835492012.5693113941

    Growth of employer enterprises

    Active employer enterprises

    Birth rate

    QCA III

    QCA II

    QCA I

    Employer enterprise population by size class (N)

    Employer enterprise population by size class, annual growth rate (%)

    Employer enterprise birth rates

    Number of employer enterprises

    %

    External factorsPopulation and birth rate of active Employer enterprises

    Folha1

    Folha1

    102031

    1067414.6162440827

    1108423.842010099217.233539633

    12275410.746828819419.4038483471

    13713311.713671244920.0826934436

    1402932.304332290616.7841588675

    1485785.905497779617.3168302171

    1591757.132280687616.8198523638

    1658604.199780116216.1714699144

    18429711.11600144722.7871316408

    1922424.310976304615.591806161

    1975462.759022482115.2293643

    2135828.117602988716.3698251725

    2288167.132623535716.4175582127

    2442386.739913292815.9205365258

    26868910.011136678226868919.482003357

    2840025.699154040519.094583841

    2997885.558411560518.2468944721

    3065612.259263212730656113.5278133879

    3129382.080173277112.7389450946

    3407758.895372246334077516.100066026

    3440210.952534663612.784103296

    3549203.168120550835492012.5693113941

    Source: GEE based on Quadros de Pessoal, GEP, Ministrio do Trabalho e da Solidariedade SocialNote: QCA - Community Support Framework

    Growth of employer enterprises

    Active employer enterprises

    Birth rate

    QCA III

    QCA II

    QCA I

    Employer enterprise population by size class (N)

    Employer enterprise population by size class, annual growth rate (%)

    Employer enterprise birth rates

    Number of employer enterprises

    %

    External factorsPopulation and birth rate of active Employer enterprises

  • High-Growth and Gazelle enterprises (by employment)

    Source: Own calculations, based on "Quadros de Pessoal", GEP, Ministrio do Trabalho e da Solidariedade Social and the OECD/Eurostats (2007) methodology.

    Sobrevivncia de Empresas em Portugal

  • High-Growth and Gazelle enterprises (by turnover)

    Source: Own calculations, based on "Quadros de Pessoal", GEP, Ministrio do Trabalho e da Solidariedade Social and the OECD/Eurostats (2007) methodology.

    Sobrevivncia de Empresas em Portugal

  • Source: Own calculations, based on "Quadros de Pessoal", GEP, Ministrio do Trabalho e da Solidariedade Social and the OECD/Eurostats (2007) methodology. Number of employees in high-growth firms according to the employment criteria, by NUTII (1997, 2004 and 2007)

    Sobrevivncia de Empresas em Portugal

  • Source: Own calculations, based on "Quadros de Pessoal", GEP, Ministrio do Trabalho e da Solidariedade Social and the OECD/Eurostats (2007) methodology. Number of employees in gazelles according to the employment criteria, by NUTII (1997, 2004 and 2007)

    Sobrevivncia de Empresas em Portugal

  • Share of High-Growth firms in 10+ employees firms (by employment and turnover)

    Source: Own calculations, based on "Quadros de Pessoal", GEP, Ministrio do Trabalho e da Solidariedade Social and the OECD/Eurostats (2007) methodology. Only 9,5% of all Portuguese employer enterprises (with more than ten employees) have a turnover that is in line with that of High Growth firms. If we consider the growth according to the number of employees instead, then the percentage of High Growth firms drops to just 3 %.

    Sobrevivncia de Empresas em Portugal

  • Share of High-Growth employment in 10+ employees firms (by employment and turnover)

    Source: Own calculations, based on "Quadros de Pessoal", GEP, Ministrio do Trabalho e da Solidariedade Social and the OECD/Eurostats (2007) methodology. Over time, we can observe a narrowing gap between the two measurement criteria, for both HG and Gazelles.

    Sobrevivncia de Empresas em Portugal

  • Average firm size in HG firms and Gazelles and total population of firms, births and deathsSource: Own calculations, based on "Quadros de Pessoal", GEP, Ministrio do Trabalho e da Solidariedade Social and the OECD/Eurostats (2007) methodology. The average HG firm size is higher by an average of 18 employees than that of a Gazelle. The growth in average size registered until 1999 was not maintained during the following years. In line with the overall population of firms, HG and Gazelles average size have also decreased from 2000 onwards.

    Sobrevivncia de Empresas em Portugal

  • Share of HG firms (by employment) by size classSource: Own calculations, based on "Quadros de Pessoal", GEP, Ministrio do Trabalho e da Solidariedade Social and the OECD/Eurostats (2007) methodology. The majority of HG firms and Gazelles are SMEs.

    Sobrevivncia de Empresas em Portugal

  • Source: Own calculations, based on "Quadros de Pessoal", GEP, Ministrio do Trabalho e da Solidariedade Social and the OECD/Eurostats (2007) methodology. Share of HG and Gazelles (by employment) by NACEThere is a shift in the distribution of both High Growth firms over the period of analysis, away from manufacturing (34% in 1995, down to 20% in 2007) to services and commerce (39% in 1995 up to 56% in 2007) as well as construction (15% in 1995, up to 20% in 2007). A similar pattern is observed for Gazelles.

    Sobrevivncia de Empresas em Portugal

  • Distribution of employment: HG and Gazelles (employ) by NUTII regionsSource: Own calculations, based on "Quadros de Pessoal", GEP, Ministrio do Trabalho e da Solidariedade Social and the OECD/Eurostats (2007) methodology. More than half of HG firms are concentrated around the area of Lisbon and another quarter in the North.

    Sobrevivncia de Empresas em Portugal

  • Share of HG (employ) in total employment in enterprises +10 employees by NUTII regionsSource: Own calculations, based on "Quadros de Pessoal", GEP, Ministrio do Trabalho e da Solidariedade Social and the OECD/Eurostats (2007) methodology. The share of employment in HG firms is higher in Lisbon, which was in 2007, more than twice the share of the second most important region, the North.

    Sobrevivncia de Empresas em Portugal

  • Source: Own calculations, based on "Quadros de Pessoal", GEP, Ministrio do Trabalho e da Solidariedade Social and the OECD/Eurostats (2007) methodology. Share of HG (employ) employment in each NUTII regions 'employment (+10 employees)In 1990, the Algarve had the biggest share of regional employment in HG firms. But the situation reversed and in 2007, with Lisbon leading the regional ranking.

    Sobrevivncia de Empresas em Portugal

  • Between 2005 and 2008, the UK High Growth firms tripled, on average, the number of employees. In Portugal, firms have experienced a sustained decrease in the number of employees. Furthermore, High Growth firms account for 6% of the total population of UK firms in terms of employment growth (NESTA, 2009), which is the double of what the evidence shows for Portugal.When Portuguese firms are compared with their UK counterparts, it is noticeable that:on average High Growth firms in the UK have been more successful at creating employment than

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