By Daniel Hunter
Germany and the UK have the largest numbers of fast growing companies in Europe, according to international tax advisory company, Von Essen.
Germany topped the table with 32,352 ‘high growth’ companies that have grown their headcount by more than 10% in the last year, followed by the UK with 22,615.
High growth companies are defined as those employing ten or more staff which have increased in size by a tenth or more (measured in employment terms) in the space of one year.
However, Von Essen points out that the UK’s high growth companies are on average larger in size, so that the number of staff currently employed in high growth companies is roughly the same across the two countries, despite Germany having a far larger workforce.
Last year there were 2.68 million people employed in high growth companies in Germany, and 2.57 million in the UK.
The UK has the highest proportion of its workforce employed by high growth companies of any major European economy.
In the UK employees of fast-growing businesses accounted 8.1% of the total working age population, in compared to 6.3% in Germany.
Von Essen said that more flexible working practices and its focus on high growth sectors have helped the UK punch above its weight.
Lydia Marref, Partner at Von Essen, said: “Although Germany, with its famed Mittelstand of medium sized-companies and high quality manufacturing sector, has been a powerhouse of Europe in the last few years, more flexible labour practices in the UK make it easier for businesses to expand faster.”
“The UK also edges Germany in success in high-growth sectors, such as the IT and technology industries. The UK has also given a green light to shale gas exploration, another source of high skill jobs, whereas Germany has imposed a ban on shale gas exploration expected to last into the next decade.”
Poland has the largest number of high growth companies of any Central or Eastern European country — the sixth highest in the table — with 8,478 rapidly expanding firms employing over 900,000 staff, equivalent to more than 100 each. This ranking reflects its drive to gain ground on the core members of the EU since its accession a decade ago in terms of economic development.
Investment in Poland’s energy and transport infrastructure are providing opportunities for rapid business growth, and the strength of its pharmaceutical market, now the seventh largest in Europe, are adding to its traditional industrial strengths in manufacturing and mining.
Von Essen added that several European countries are punching above their weight in terms of the number of high growth companies, notably the Czech Republic, Lithuania, Ireland and Luxembourg.
For example, there are more high growth companies in the Czech Republic than in Romania, Belgium and Portugal, which all have larger populations. Indeed, 9.9% of the workforce in the Czech Republic is employed in high growth businesses - the largest proportion of any European country.
Lithuania is also flying the flag for Central and Eastern Europe, with 9.8% of its 3 million-strong population employed by companies that are growing at a rate of more than 10% per year. Increasing strength in sectors such as IT and finance is evidenced by the fact that several multinationals such as Microsoft, IBM, and Barclays have established operations in the country.
Ireland outperforms similarly sized Croatia, with 1,517 fast-growing businesses, compared to Croatia’s 417. In Luxembourg, 8.8% of the workforce are employed by high growth businesses, the third highest proportion in Europe.
Von Essen explained that the impressive performance of high growth companies in these countries is due to business-friendly practices, highly skilled populations and expertise in growth industries. For example, both Ireland and the Czech Republic have burgeoning technology industries.
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