Gazelles in France

OECD 19/11/2007 Claude Picart - INSEE 1

Gazelles in France

OECD - 19/11/2007Gazelles in France Claude Picart -

INSEE 2

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

1. Using usual business data over a long period2. Using a work in process (shorter period) in

order to distinguish between organic growth and external growth


INSEE 3

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


INSEE 4

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


INSEE 5

Size and performance

0%

10%

20%

30%

40%

50%

60%

70%

1 4 7 10 25 40 60 90 200 400 2001

Employee number en 1993

1

2

3

4

5

6

7

Minimum growth of gazelles

Gazelles' share of gross job

Gazelles 1993 – 2003 : growth (employees 2003/empl. 1993) and share of gross job gains

20 250


INSEE 6

The performance of gazelles is relatively insensitive to economic conditions

0%

100%

200%

300%

1993 1994 1995 1996 1997 1998 1999

0%

5%

10%

15%

Aggregate employment growth

Gazelles' growth

Four years growth (sprint gazelles)

Innovations ?Intra-group restructuring operations ?


INSEE 7

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 ?


INSEE 8

2 - Firms’ continuity

A predecessor of B ?

Yes No

B successor of A ?

Yes Continuity Sale

No Externalisation Simple grouped flow

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


INSEE 9

External growth : half the gazelles’ total growth

* Of which 73 for a single firm

1998 SME with employees in 2001

Empl.

Gross Job losses

Gross job gains

Empl.

1998 Intern Extern Intern Extern 2001

Without gazelles

2927 175 75 358 50 3085

Gazelles 156 7 1 169 206* 523

Not in groups 39 42 11 92


INSEE 10

External growth : defensive

Gazelles are to be found in all industries Mainly external growth in low-growth

sectors

Share of external growth among gazelles

Small

Average

Large

Growth of sector

Low 5 7 11

Average

6 9 9

Strong 12 8 4

71 sectors (NES114)with at least 5 gazelles among thier SMEs


INSEE 11

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’


INSEE 12

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

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