7.2.1Stimulating high-growth innovative firms

Towards 2050, Flanders[1] aims to excel as an innovative knowledge society. In 2017, 2,89% of its GDP was invested in Research & Development. With this percentage Flanders far exceeds 1,96%, the average of the 28 European member states (3% nota[2], 2019). However, the available knowledge and expertise should also lead to innovative output and the upscaling of innovations (Vision 2050[3]). High-growth innovative firms play an important role in this.

Stimulating high-growth innovative firms is a point of concern, according to the RIO Country Report Belgium 2016. High-growth firms are also an important policy issue. Most jobs are created by a limited number of high-growth firms, while employment remains stable for the majority of the firms.[4] High-growth innovative firms are also crucial for vibrant and dynamic economies; they are usually (but not always) young (Figure 1), not necessarily small, not more common in hi-tech industries...[5]

The ambition for the Flemish region must be to generate as much added value as possible, through innovation across all economic and societal domains. High-growth innovative firms and the entrepreneurial ecosystems in which they thrive, play a crucial role. In an entrepreneurial ecosystem, the complex ensemble and the strengths of the interconnections are important, rather than the individual components as such. A global, healthy high-growth entrepreneurial ecosystem with strong links leads to a higher number of fast-growing companies (as the output of the ecosystem). The focus of the advice is both on young (+/- <10 years) and more mature (> 10 years) high-growth innovative firms.

 

[1] Dutch speaking northern region in Belgium
[2] https://www.ecoom.be/assets/194
[3] This is the long-term strategy or vision of the Flemish government towards 2050. https://www.vlaanderen.be/vlaamse-regering/visie-2050
[4] Autio, E. (2016). Entrepreneurship Support in Europe: Trends and Challenges for EU Policy. 10.13140/RG.2.1.1857.1762
  OECD (2013). Key findings of the work of the OECD LEED programme on high-growth firms – interim report. OECD publishing, Paris.
[5] See also Autio, 2016, page 6

Figure 1: Number and share of Flemish high-growth firms according to age, in 2015

Number of fast growing firmsNumber of firmsShare of high-growth firms050010001500200025003000Frequency510152025303540455055606570Firm Age0%2%4%6%8%10%12%14%Percentage510152025303540455055606570 Number of fast growing firmsNumber of firmsShare of high-growth firms050010001500200025003000Frequency510152025303540455055606570Firm Age0%2%4%6%8%10%12%14%Percentage510152025303540455055606570 Number of fast growing firmsNumber of firmsShare of high-growth firms0100020003000Frequency510152025303540455055606570Firm Age0%5%10%Percentage510152025303540455055606570

Source: Department of Economics, Science & Innovation[1] (Jan Van Nispen).

Growth criterion is employment (20%), data are aggregated across sector, company size... The figure shows not all high-growth firms are young. The frequencies reveal high-growth companies at all ages. High-growth firms, however, are more concentrated at younger ages. Additionally, the probability of being a high-growth firm (see percentages) is highest at the age of five (13%), not exceeding a probability of 3% from the age of 30.

[1] https://www.ewi-vlaanderen.be/en