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Gazelles in France. Context of this study. A request of the Conseil d’Analyse Economique (2005) CAE’s report : A SME Strategy for France A big concern in France : the lack of middle-size companies (50 – 500 employees) An answer in two steps Using usual business data over a long period
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Gazelles in France Claude Picart - INSEE
Context of this study • A request of the Conseil d’Analyse Economique (2005) • CAE’s report : A SME Strategy for France • A big concern in France : the lack of middle-size companies (50 – 500 employees) • An answer in two steps • Using usual business data over a long period • Using a work in process (shorter period) in order to distinguish between organic growth and external growth Gazelles in France Claude Picart -INSEE
1 - Previous work in France • No specific study • A participation to an OECD project (Shreyer, 2000) • 10.000 permanent firms over 20 employees in the manufacturing sector (1985 – 1994) • Half of the enterprises gain jobs • Among the growth firms, the top 10% = 50% of job gains • Comparable results for other countries • Sweden : external growth = 2/3 of job gains Gazelles in France Claude Picart -INSEE
Methodological choices • What we can track : legal entities (SIREN number) • Size criterion : employment • Selection of gazelles : for each size bracket, the top 5% (growth rate) of perennial firms • Long-distance gazelles (ten years) • Sprint gazelles (4 or 5 years) • Birch-type gazelles (regularity) • Not restricted to young firms Gazelles in France Claude Picart -INSEE
Size and performance Gazelles 1993 – 2003 : growth (employees 2003/empl. 1993) and share of gross job gains 20 250 Gazelles in France Claude Picart -INSEE
The performance of gazelles is relatively insensitive to economic conditions Four years growth (sprint gazelles) Innovations ? Intra-group restructuring operations ? Gazelles in France Claude Picart -INSEE
The gazelle’s growth is uneven • Half of their decade-long increase concentrated in a single year • 1993 – 1998 gazelles : a contrasted fate • Under-represented among average performing firms (1998 – 2003) • Only 7% are among the 1998 – 2003 gazelles • Many of then disappear Few gazelles as defined by Birch, in France • Disappearence : death or absorption ? Gazelles in France Claude Picart -INSEE
2 - Firms’ continuity • Longitudinal matched employer-employee database (DADS) • Demographic relation between A and B : at least half of the employees in one of the units in year n is in the other unit the other year Gazelles in France Claude Picart -INSEE
External growth : half the gazelles’ total growth * Of which 73 for a single firm Gazelles in France Claude Picart -INSEE
External growth : defensive • Gazelles are to be found in all industries • Mainly external growth in low-growth sectors 71 sectors (NES114)with at least 5 gazelles among thier SMEs Gazelles in France Claude Picart -INSEE
External growth : offensive ? • External growth may be • Intra-group restructuring • A sign of dynamism • Independent gazelles • Gazelles leader in their groups • Indirect approach (see annex 3) • Autonomous growth presumption for 45% of gazelles : 31% independent + 14% ‘leaders’ Gazelles in France Claude Picart -INSEE
Conclusion • Gazelles have oustanding performances • 5% of perrenial firms = 50% of gross gains • Workforce x 5 in 10 ans • This should be put in perspective • Performances presumably < US gazelles • External growth • 50% of gazelles’ growth • More in sluggish-growth industries • Only temporary performances • We need to improve the tracking of enterprises and groups Gazelles in France Claude Picart -INSEE