DETERMINANTS FOR FOSTERING HIGH GROWTH ENTERPRISES IN REPUBLIC OF NORTH MACEDONIA
Keywords:
high- growth enterprises, SMEs, start-ups, scale-ups, growthAbstract
High growth enterprises are attracting the attention to both economic theoreticians and practitioners. Namely, among all enterprises, there is a group of enterprises which show high growth and contribute in large extent to the economic development of the countries. In fact high growth enterprises are considered as drivers of the innovation, twin transition and structural transformation of the countries. This is why, researchers and especially policy makers are interested to find out more behind the factors or determinants which triggers the growth of these enterprises. The reasoning behind this paper is to analyse what high growth enterprises represent, what are their characteristics, the different definitions used, than to analyse literature which focuses on the causality between high growth of companies and certain aspects of economic development, EU policies aimed at high growth potential (HGEs) enterprises, in order to be able to make a comparative analysis using available statistical data and draw conclusions and policy recommendations for fostering HGEs in Republic of North Macedonia. Analysis showed that only 2% of all companies in the country are contributing to 20% of employment. Still, most of them are found in traditional service sector followed by manufacturing, unlike the HGEs in EU where they are mostly found in knowledge intensive service sector. The main conclusion is that instead of policy mix to support local champions, government should be more focused on developing policy framework to back enterprises which have the potential to grow fast. To do that, government needs to create framework conditions which will enable companies to grow, but also to create tailored made instruments and policies which will back companies with high growth potential. The firms to be targeted are not those that would grow in any case, but those for which policy intervention would make a difference. Given the fact that HGEs are considered as drivers of innovation and technological advancement, EU is putting them high on their policy agenda. Therefore, aligning policy objectives of North Macedonia with the ones of EU in the area of SMEs with special focus on start-ups and scale-ups with potential to grow should be imperative for policy creators.
References
Coad, A., & Karlsson, J. (2022). "A field guide for gazelle hunters: Small, old firms are unlikely to become high-growth firms," Journal of Business Venturing Insights, Elsevier, vol. 17(C)
Coad, A., Daunfeldt, Sven-O., Hölzl, W., Johansson, D., & Nightingale, P. (2014). High-Growth Firms: Introduction to the Special Section. Industrial and Corporate Change. 23. Pg. 91-112.
Commission Implementing Regulation (EU) 2020/1197 laying down technical specifications and arrangements pursuant to the Regulation of the European Parliament and of the Council (EU) 2019/2152 on European business statistics (‘EBS Regulation’)
Commission Implementing Regulation (EU) 2020/ of 30 July 2020 laying down technical specifications and arrangements pursuant to Regulation (EU) 2019/2152 of the European Parliament and of the Council on European business statistics repealing 10 legal acts in the field of business statistics (europa.eu)
COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS “Think Small First” A “Small Business Act” for Europe, Brussels, 25.6.2008 COM(2008) 394 final
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS An SME Strategy for a sustainable and digital Europe, Brussels, 10.3.2020 COM(2020) 103 final
Daunfeldt, S.-O., Elert, N., & Johansson, D. (2016). Are high-growth firms overrepresented in high-tech industries?. Industrial and Corporate Change. 25. 1–21
Flachenecker, F., Gavigan, J. P., Goenaga Beldarrain, X., Pasi, G., Preziosi, N., Stamenov, B., & Testa,G. (2020). High Growth Enterprises: demographics, finance and policy measures, EUR 30077 EN, Publications Office of the European Union, Luxembourg, ISBN 978-92-76-10615-9
Hallak, I., & Harasztosi, P. (2019). Job Creation in Europe: A firm-level analysis, EUR 29689 EN, Publications Office of the European Union, Luxembourg, ISBN 978-92-76-00775-3, doi:10.27
Isenberg, D. (2012). Focus Entrepreneurship Policy on Scale-Up, Not Start-Up, Harward Business Review
Mind the Bridge (2019). Tech Scale-Up Europe Report 2019, Start-Up Europe Partnership
Monteiro, G.F.A. (2019). "High-growth firms and scale-ups: a review and research agenda", RAUSP Management Journal, Vol. 54 No. 1, pp. 96-111. https://doi.org/10.1108/RAUSP-03-2018-0004
OECD (2010). High-Growth Enterprises: What Governments Can Do to Make a Difference, OECD Studies on SMEs and Entrepreneurship, OECD Publishing. http://dx.doi.org/10.1787/9789264048782-en
OECD (2007). Eurostat Manual on Business Demography Statistics, Luxembourg: office for official publications of the European Communities
OECD (2021), “The knowledge gap on scalers”, in Understanding Firm Growth: Helping SMEs Scale Up, OECD Publishing, Paris 60/590043, JRC115930
World Bank Enterprise Surveys, http://www.enterprisesurveys.org
