More gazelle companies in Europe

Growth strzalki

(Gerd Altmann, Pixabay, Public domain)

Every tenth company in the European Union has been increasing its employment by more than 10 per cent annually over a period of three years. In 2017, the total number of such enterprises increased by 11,000.

The highest growth was recorded in Spain and Italy. In Poland, the number of such companies increased by 1,100. In the statistics of gazelle companies Poland is performing better than most of the EU member states.

According to the Eurostat data concerning the number of companies with the fastest increase in employment, gazelles are multiplying particularly rapidly in Cyprus. In 2017, the number of such companies in that country increased by nearly 57 per cent. Meanwhile, in Slovenia their number grew by more than 20 per cent, and in Finland by nearly 19 per cent. In Poland, the number of high-growth enterprises increased by 9.5 per cent, while the average increase in the EU was 6.2 per cent.

Unfortunately, there is no precise definition of companies classified as gazelles, which makes comparisons difficult. This category is typically applied to enterprises that are not only increasing their employment (by at least 10 per cent annually over a three-year period) but also recording high rates of growth in sales or profits (e.g. growth exceeding 20 per cent). The Eurostat data only present the size of the employment generated by the gazelles, but that alone constitutes important information, indirectly reflecting the condition of the enterprises and the economy. After all, no entrepreneur decides to constantly and quickly increase employment, without the prospects of growing profits.

The Eurostat data covers companies — excluding micro-enterprises employing up to nine people — that have been increasing their number of employees by at least 10 per cent annually over a three-year period. In 2017, among the 188,170 such enterprises in the European Union, the highest number was recorded in Germany (39,585). Other economies that fared well in this respect also included the United Kingdom (25,475), Spain (19,494), and surprisingly — in the context of the economic crisis — Italy (17,666), as well as France (14,495) and Poland (12,910). In the case of Spain, Italy and Poland, the results recorded in 2017 were much better than in 2016.

Although Cyprus is leading in terms of the percentage change in the number of gazelles, this was mainly due to the low base effects. The share of enterprises with high growth in employment among the overall number of companies tells us more about the condition of the individual economies. The available data allow us to compare last year’s results with the situation in 2016. According to Eurostat statistics, back then 10.8 per cent of all the enterprises in the European Union could be classified as gazelles. At that time, the highest share of such companies — over 16 per cent — was recorded in Ireland and in Malta. By far the lowest share — less than 3 per cent — was found in Cyprus and in Romania. In Poland, this share reached 11.7 per cent and was 1.4 percentage points higher than a year earlier.

Among the 11,000 new European gazelle companies that emerged in 2017, the largest growth – over 2.3 thousand entities – was found in the sector of wholesale and retail trade. The European population of business gazelles also grew by nearly 2.1 thousand in the construction industry. The percentage increase (11.3 per cent) was strong among all the business sectors. It’s also worth noting the strong (8.0 per cent) increase in the number of high-growth companies involved in the provision of professional, scientific and technical services. Across the European Union, the number of such companies increased by over 1,300 compared to 2016.

The Eurostat data indicates that among the 12,900 Polish companies classified as gazelles, the single largest group — consisting of nearly 4.1 thousand enterprises — operated in the manufacturing sector, followed by the wholesale and retail trade (almost 3,300 companies), transportation (1,400 companies) and construction (1,300 companies). Compared with the results from 2016, the number of gazelles in Poland grew by 1,115, with the largest increases found in trade (222 companies), as well as the transportation and storage sector (210 companies).

However, the highest rate of growth in the number of companies increasing their employment year by year (41.5 per cent) was recorded in the sector of accommodation and food services.

Gazelle companies have a significant share in the labor market in Poland. In 2017, such companies employed a total of 1,3 million workers, which is 47,700 more than in 2016. The employment in manufacturing companies rose by 21,900 people, while in companies from the transportation and storage sector it grew by 19,100 people. At the same time, there are clear structural changes. According to the Eurostat data, despite the significant increase in the number of companies that can be classified as gazelles in the sector of administrative and support services, the total number of jobs created in that field decreased by as much as 19.3 thousand. The situation was similar in the trade sector — the number of high-growth companies increased, but the number of jobs decreased by 13,100.

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