Ministry of Enterprise, Energy and Communications High Growth Firms – A Sensitivity Analysis SWEDEN Anita Du Rietz, Ministry of Enterprise, Energy and Communication Fredrik Andersson, Statistics Sweden

Ministry of Enterprise, Energy and Communications Definitions High Growth firms: growth greater than 20% per annum, over a three year period, and with 10 or more employees. Gazelles: high growth firms which at are no more than 5 years in the beginning of the observation period. High Growth Firms = Gazelles + Flyers.

Ministry of Enterprise, Energy and Communications Measuring high growth Selection variables Two classes of variables: employment a) number of employees b) wages/salaries, economic performance a) turnover = sales b) value added

Ministry of Enterprise, Energy and Communications Number of High Growth firms , (10+ empl. and +20%), in percentage of each category Selection variableValue addedEmployment High growth firms7%4% Gazelles15-16%9% Flyers5%3%

Ministry of Enterprise, Energy and Communications Number Employees in High Growth firms 02-05, (10+ empl. and +20%), in percentage of each category Selection variableValue addedEmployment High growth firms10%7% Gazelles20%15% Flyers8%6%

Ministry of Enterprise, Energy and Communications Selection variable – employment or economic performance? Economic performance Time Flyer Gazelles Time period of study = new employees

Ministry of Enterprise, Energy and Communications

The share of high growth firms, gazelles and flyers selection variable = value added, ,00 0,10 0,20 0,30 0,40 0,50 0,60 0,70 0,80 0,90 1,00 Year 00Year 01Year 02Year 03Year 04Year 05 HGE Value Add GZE Value Add Flyers Value Add

Ministry of Enterprise, Energy and Communications Top Industries for gazelles NACE 74 Other business activities; Call centre activities - Provision of personnel activities - Construction and other engineering activities - Business and management consultancy activities - Advertising agency activities. 72 Computer and related activities Other software consultancy and supply - Hardware consultancy 45 Construction 51 Wholesales, trade & commission excl. motor veh. & cycle 85 Health and social work 52 Retail trade excl motor veh. & cycle; repair h/hold gds.

Ministry of Enterprise, Energy and Communications Characteristics for high growth firms they employ relatively younger people they pay lower salaries to their employees the young employees have higher education key personal have a ph.d. in the age of the employees are to less extent on sick leave

Ministry of Enterprise, Energy and Communications Age and gender, percentage within each type of firm AgeMaleFemale Gazelles<3020,417,3 >4513,87,8 Flyers<3014,29,2 >4524,89,9 All others<3012,28,3 >4524,613,2

Ministry of Enterprise, Energy and Communications Establishments – a better unit? - The dynamics of firms and enterprises - Organic or non-organic growth, i.e., the entering point is via split/merge or “new” Establishments are located in different regions or in industries Regional clusters can be traced

Ministry of Enterprise, Energy and Communications Establishment – a better unit? establishments are HGE –1.091 firms with one establishment = HGE –445 firms with several establishments that have in total 674 HGE 129 of 445 firms are HGE in both methods –488 establishments are HGE but these 316 firms are not HGE –More than 60% are in sections J+K, G+I

Ministry of Enterprise, Energy and Communications Organic or non-organic gazelles

Ministry of Enterprise, Energy and Communications High growth plants as a percentage share of all above 5 empl

Ministry of Enterprise, Energy and Communications Sensitivity Analysis G azelles of all surviving plants, %, , within size classes, growth rates = 10%, 20%, 30%.

Ministry of Enterprise, Energy and Communications Summary - high growth - Sweden Choice of selection variables: economic performance = Gazelles ( 15%) + Flyers (5%) = All HG (7%) employment = Gazelles ( 9%) + Flyers (3%) = All HG (4%) Gazelles employ = young, more females, higher education, lower salaries

Ministry of Enterprise, Energy and Communications Summary - high growth - Sweden Plants a better unit for employment analyses + 5 employees, +20% growth Gazelles overrepresented in service sectors, Flyers in a few sectors Sensitivity analysis for gazelle plants % of all plants with +5, 6,2% (+10% growth), 2,7% (+20% growth), 1,3% (+30% growth)