In light of the need to create new jobs High Growth companies or rather ‘gazelles’ are very much on the European agenda at the moment.
It has been recognised for many years that gazelles create jobs, economic wealth and need to be supported. The big questions are how and what type of support?
These were just two of many questions discussed by innovation specialists, industry experts and policy-makers at a recent workshop in Brussels organised by the Sectoral Innovation Watch in January 2011.
Opening the workshop, Reinhard Büscher, Head of Unit at DG Enterprise and Industry, stressed the importance of measuring the development of gazelles and understanding better, how, where and especially under what environmental conditions gazelles appear and flourish.
Dan Johansson from The Ratio Institute presented evidence showing how important high-growth firms are for economic development: gazelles contribute a disproportionally large contribution to economic growth, productivity and sales. He also stated that there are some key institutions that foster gazelles, including deregulation of closed markets, tax system, and labour market regulations – all of which the new UK coalition government is reviewing.
Paul Nightingale from the University of Sussex presented a very different perspective on High Growth companies. According to his analysis, most businesses contribute relatively little to employment growth: he calls these businesses ‘Muppets’. Paul argues that Muppets play a marginal role with poor performance in terms of innovation, economic growth and productivity. Often such firms appear to look like gazelles, but are not. He added that Muppets are easy to find and to support, whereas real gazelles are difficult to find and to support.
Other contributors such as John Leach from Winning Pitch stressed that individual firms, especially gazelles often have different constraints on growth, requiring more tailored support.
During the workshop, the group also stressed that there are no silver bullets when it comes to supporting and nurturing High Growth companies. It is about creating a supportive environment which means investing in R&D, fostering private venture capital, supporting intellectual property rights and offering coaching and role models.
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