Startups are good but high-impact firms are better...Hanken Svenska handelshögskolan / Hanken...

Hanken Svenska handelshögskolan / Hanken School of Economics www.hanken.fi

Metropolitan growth through high-impact firms

Startups are goodbut high-impactfirms are better


RQs

How can city organizations involved in the KatuMetroproject impact on the creation of more high-impactcompanies in their region/area?

Enterprises whose sales have at least doubled over a four-year period and which have an employment growth quantifierof two or more over the period (Acs et al., 2008)


Purpose

The main purpose of the research project is to improve the localknowledge of high-impact firm existence and behavior.

National and sector-level developments in

HIFs

© Hanken Svenska handelshögskolan / Hanken School of Economics, www.hanken.fi

‘Growth sprint’ counts trend somewhatsimilarly regardless of the definition


‘Growth sprint’ counts trend somewhatsimilarly regardless of the definition


HIFs, i.e. high-impactfirms (Acs et al. 2008)have, over a 4-yearperiod,

(i) Double revenueand(ii) Absolute XRelative personnelgrowth ≥ 2

Acs, Zoltan J., William Parsons, and Spencer Tracy. “High-Impact Firms: Gazelles Revisited.” Washington, DC, 2008.

Manufacturing HIFs are on thedecline


Sector definitions based on TOL 2008 codes and Eurostat defitions:http://ec.europa.eu/eurostat/cache/metadata/Annexes/htec_esms_an3.pdf

Knowledge-intensive serviceHIFs are on the clearest rise



Uusimaa clearly dominates incertain HIFs



Industry, city and firmlevel observations of

HIFs


Quantity vs. concentration in cities

In quantity, thecounts crudely

reflect citypopulations

Inconcentration,Vantaa clearly

leadsin the capital

area

** Note: This is relative to the amount of firms that existed in 2011 in the city, i.e. potential HIFs.* Note: 2015 counts. Source: Bureu van Dijk, Orbis database

City HIFs % of all HIFs % HIFs of firmsin the city

Helsinki 311 20,1 1,3

Vantaa 90 5,8 1,6

Espoo 88 5,7 1,0

Tampere 78 5,0 1,5

Turku 75 4,9 1,5

Oulu 41 2,7 1,4

Jyväskylä 36 2,3 1,8

Kuopio 30 1,9 1,9

Pori 25 1,6 1,5

Lahti 23 1,5 0,9

Less knowledge-intense industries areon top of total quantity in the nation


** Note: This is the amount of firms that existed in 2011, i.e. firms that have had the possibility to meet the HIF definition.

* Note: 2015 counts.

Industrial sector HIFs* % of all HIFs Total firms

Less knowledge intensiveservices 432 27,9 53731

Knowledge intensivemarket services (not

high-tech or fin services)272 17,6 22693

High-tech knowledgeintensive services 161 10,4 6798

Other knowledgeintensive services 107 6,9 9821

Medium low-tech manuf 68 4,4 4781

Low-tech manuf. 44 2,8 4423

Medium high-techmanuf. 35 2,3 2031

Knowledge intensivefinancial services 20 1,7 6023

High-tech manuf. 11 0,7 522

Other less knowledgeintensive services 9 0,6 1358

... but the picture flips, if we look atthings relatively (concentration)


** Note: This is relative to the amount of firms that existed in 2011 in the industry or sector, i.e. potential HIFs.

* Note: 2015 counts.

*** Note: Industries with at least 10 HIFs. The most HIF-intense industry in 2015 was ”manufacture of fibre optic cables” (Tol 2731), with a 33% HIF rate.

Industrial sector HIFs* % HIFs in sector

High-tech knowledge intensiveservices 161 2,4

High-tech knowledge intensivemanuf. 11 2,1

Medium high-tech manuf. 35 1,7

Medium low-tech manuf. 68 1,4

Knowledge intensive marketservices (not high-tech or fin

services)272 1,2

Other knowledge intensiveservices 107 1,1

Low-tech manuf. 44 1,0

Less knowledge intensiveservices 432 0,8

Other less knowledge intensiveservices 9 0,7

Knowledge intensive financialservices 26 0,4

Ongoing research andopen questions


Research in the making


48

2

2

12

12

4

1 2

6

4

1

6

4

5

What about more long term growth?

Super high-impact firms = 8 years growth

Totally 97 SHIFs in the nation

Concentration to capital region

SHIF are not distributed across all industries, thereis a concentration to a few industries.

The four most common industries:• information and communication (30/97)• wholesale and retail trade repair of motor

vehicles and motorcycles (22/97)• construction (17/97)• professional, scientific and technical activities

(13/97).

What are the mechanisms of spillovereffects from HIFs?


The role of high-impact high-technology firms is to create new pathways in the cityinnovation system. They do this by refining the use of already existingtechnologies, re-shaping traditional processes/technologies/products.

• Indicates business innovation rather than technological innovation

• Incremental innovation rather than radical innovation

• Brings international knowledge to the city innovation system

Other open questions and ongoinganalyses


• How much do HIFs in different sectors affect regionalunemployment rates and GDP growth?• Under examination using Statistics Finland’s data

• Can the occurrances of HIFs be predicted withmachine learning?• Being examined by a data science project student

team from Helsinki University

• How static are HIF counts and concentrations on thecity-industry level, and what are the factors that drivethese concentrations?• What can policy-makers utlimately do?

Questions?


Startups are good but high-impact firms are better...Hanken Svenska handelshögskolan / Hanken...

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