Data from several OECD countries shows that high-growth firms are credited with creating more than 40 percent of new jobs, despite representing only 5 percent of the firms in the economy.
While solid data comes mostly from developed nations, high-growth entrepreneurship (HGE) has become a core focus for policymakers striving to improve competitiveness and increase economic growth, beyond advanced economies.
A World Bank flagship research report is now exploring the topic in depth. Ganesh Rasagam, Practice Manager of the Innovation & Entrepreneurship Unit at the World Bank, expressed to GERN members during their May 31 Field Report: "Via its extensive work on SMEs, the World Bank has learned that the size matters less than growth trajectory of firms. However, there is limited guidance available on what public interventions could be deployed to promote growth entrepreneurship, and how these should be implemented".
Some of driving questions behind this flagship project are:
- How can policy leaders increase the pool of firms entering the pool of new firms and how can support their scale-up path?
- How can ecosystems support firms in building successful business models?
- How do we help governments screen out under-performing or not-ready-to-scale firms? An example under study is the Finnish model which reduces the number of firms getting support.
The flagship team is taking an ecosystem-approach and conducts sector-agnostic research.
Given the potential of this rare category of firms and the interest amongst policymakers across the development spectrum, insights from this research project will be discussed with the Startup Nations policy network at their November Summit in Tallinn, Estonia.