EU Industrial R&D Investment Scoreboards 2011

Fast-growing companies are important sources of economic growth andemployment, thus directly contributing to the economic recovery. Moreover,fast-growing companies in knowledge intensive activities are important toaccelerate the industrial structural change that the European economy requires.Empirical evidence drawn from the Scoreboard sampleThe identification of fast-growing companies has been done on the basis of asample grouping the Scoreboard companies for which observations exist for theperiod 2002-2009. Following the definition of high growth by EUROSTAT-OECD 19 , a company is classified as being 'fast growing' if, in any threeconsecutive years period, a minimum of 20% annual increase in either sales oremployment is achieved 20 . The results of the identification exercise using thecriteria of sales and employment growth is presented in Table 14 below and thefull list of fast growing companies is presented in Annex 4. The table alsoincludes the number of companies identified on the basis of an additional third"fast-growing" criterion: R&D investment growth.This evidence shows that fast growing companies in the Scoreboard sample aremainly concentrated in three sectors, all classified as high R&D intensive (i.e.they invest more than 5% of their sales on R&D) and all with a high presence inthe Scoreboard sample (share in number of companies higher than 5%):Pharmaceuticals & Biotechnology, Software & Computer Services, andTechnology Hardware & Equipment. In these three sectors, the proportion ofhigh-growth firms ranges between 10 and 15%. In most cases, fast-growth interms of sales and of employment is coupled with fast-growth in terms of R&D.Additional analysis of the characteristics of these fast-growing companies inthese sectors is presented below.In contrast, among the other sectors most represented in the sample, in theElectronic & Electrical Equipment Sector as well as in Industrial Engineeringcomparably few companies were identified as fast growing. This could beexplained by the particular sample composition of these two sectors in theScoreboard, composed of very large firms. Nevertheless, there are at leastsome companies in both sectors characterized by notable R&D investmentgrowth. In the Automobiles & Parts sector, there are few fast-growingcompanies and none are based in the EU and the US.The companies in the Healthcare Equipment & Services sector appear to beparticularly dynamic. The relative number of fast-growing companies is high(almost 20% of all companies in the sample's sector classify as fast-growing).Most of fast-growing companies in this sector are based in the US.The fast growing companies based in the US have very high R&D intensity,those from the EU still have a fairly high R&D intensity – although much lessthan that of the US' – and the rest of companies show lower R&D intensity.19 EUROSTAT-OECD (2007): Eurostat-OECD Manual on Business Demography Statistics, p. 61. Also cited in OECD(2010), OECD Studies on SMEs and Entrepreneurship, High-Growth Enterprises, What Government can do to make adifference, p. 16.20 In this exercise, distinction is not made between internal growth of the firm and the external one, i.e. driven bymergers and acquisitions.48The 2011 EU Industrial R&D Investment Scoreboard