Abstract
The information and communication technology (ICT) is a cross-section technology. ICT accelerates structural change and has a revitalizing effect especially in advanced economies. For Germany, it is therefore important not to leave behind on the fast-growing ICT market and to produce a high number of fast-growing ICT companies itself. In this analysis, 200 ICT companies based in Germany were interviewed to find out which company-specific factors have a measurable direct impact on corporate growth. Also, regional determinants were included. The analysis found that firm age and size, export ratio, expenditure on research and development, product innovation, venture capital, and concrete cooperation between companies have a directly positive effect on the growth of ICT companies. Surprisingly, active participation in an ICT cluster has a negative impact on company growth, or, to be more precise, it appears that predominant low-growth ICT companies operating active in clusters. This leads to interesting implications for policymakers, which see the active support of cluster development as an adequate instrument to stimulate innovations.
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Notes
- 1.
In the present context, the terms are used synonymously. For a distinction from other concepts of territorial agglomeration and regional innovation activities, see, for example, Jonas (2006, p. 3 et seqq.).
- 2.
A more in-depth overview of cluster policies and cluster initiatives is provided by the European Cluster Observatory (http://www.clusterobservatory.eu/index.php?id=42&nid=).
- 3.
% of the interviewed companies responded with YES to the question if the company had engaged in innovative activities during the past 3 years.
- 4.
Financing aspects will be discussed in more detail in the following section.
- 5.
% of the 33 interviewed enterprises that received VC had developed at least a prototype or registered a patent prior to obtaining the VC.
- 6.
In addition, a comprehensive and systematic compilation of all empirical studies on the topic of growth of enterprises is presented; for more recent studies as of 2001, see Cassia and Colombelli (2009).
- 7.
See Santarelli et al. (2006) for a comprehensive overview of the empirical literature on Gibrat´s law.
- 8.
Details on the WZ (2008) are provided by the Federal Office of Statistics at: http://www.destatis.de/jetspeed/portal/cms/Sites/destatis/Internet/DE/Content/Klassifikationen/GueterWirtschaftklassifikationen/Content75/KlassifikationWZ08,templateId=renderPrint.psml.
- 9.
Not all enterprises replied to all questions. Accordingly, the number of actual observations is below this number and is provided for all estimates. The detailed results and statistics available for each answer can be found in Table 5.1 and in the Annex. In total, approximately 4,000 businesses were approached.
- 10.
No significant effect resulted, as already mentioned, from the inclusion of the spread of enterprises and employment across all sectors in the analysis, to identify any Jacobs externalities, which arise from a conglomeration of various industries.
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Annex: Statistical information on the responses of surveyed companies (selection)
Annex: Statistical information on the responses of surveyed companies (selection)
The companies surveyed are | ||
Answer | Amount | Percentage |
An single-site company without branch | 115 | 54.25% |
The headquarters of a company with branch(es) | 75 | 35.38% |
Branch, subsidiary company | 20 | 15.95% |
Other | 2 | 0.94% |
No answer | 0 | 0.00% |
The companies surveyed were | ||
Answer | Amount | Percentage |
A complete start-up company | 167 | 79.15% |
A takeover of an existing company | 15 | 7.11% |
A spin-off of an existing company | 24 | 11.37% |
A spin-off from a university | 2 | 0.95% |
A research institute | 0 | 0.00% |
Other | 3 | 1.42% |
No answer | 0 | 0.00% |
How many permanent employees are currently working in the company? (Please convert part-time workers to full-time employees (with ½, ¼, etc.))? | ||
Answer | Amount | Percentage |
0–10 | 45 | 21.13% |
More than 10–25 | 80 | 37.56% |
More than 25–50 | 37 | 17.37% |
More than 50–100 | 17 | 7.98% |
More than 100–250 | 19 | 8.92% |
More than 250–500 | 7 | 3.29% |
More than 500 | 8 | 3.76% |
No answer | 0 | 0.00% |
Compared with the number of employees from three years ago, the company now employs | ||
Answer | Amount | Percentage |
More employees | 129 | 60.56% |
Fewer employees | 22 | 10.33% |
About the same number of employees | 56 | 26.29% |
No answer | 6 | 2.82% |
What is the annual turnover of the company? | ||
Answer | Amount | Percentage |
Less than 0.1 Mio. € | 6 | 2.82% |
More than 0.1 Mio. € to 0.5 Mio. € | 24 | 11.27% |
More than 0.5 Mio. € to 1 Mio. € | 28 | 13.15% |
More 1 Mio. € to 2.5 Mio. € | 63 | 29.58% |
More than 2.5 Mio. € to 5 Mio. € | 33 | 15.49% |
More than 5 Mio. € to 10 Mio. € | 16 | 7.51% |
More than 10 Mio. € to 50 Mio. € | 29 | 13.62% |
More than 50 Mio. € to 100 Mio. € | 8 | 3.76% |
More than 100 Mio. € to 500 Mio. € | 4 | 1.88% |
More than 500 Mio. € | 1 | 0.47% |
No answer | 1 | 0.47% |
What is the percentage of foreign sales to total sales (export earnings)? | ||
Answer | Amount | Percentage |
0 | 60 | 28.17% |
More than 0–20% | 94 | 44.13% |
More than 20–40% | 28 | 13.15% |
More than 40–60% | 12 | 5.63% |
More than 60–80% | 4 | 1.88% |
More than 80% | 3 | 1.41% |
No answer | 12 | 5.63% |
What is the annual average growth rate of the company’s turnover in the last five years? If the company does not yet exist for 5 years, please indicate the average annual growth rate since the start of business | ||
Answer | Amount | Percentage |
No growth or negative growth | 27 | 12.68% |
0–2.5% | 27 | 12.68% |
More than 2.5–5% | 29 | 13.62% |
More than 5–10% | 34 | 15.96% |
More than 10–20% | 30 | 14.08% |
More than 20–30% | 27 | 12.68% |
More than 30–50% | 8 | 3.76% |
More than 50% (8) | 14 | 6.57% |
No answer | 17 | 7.98% |
Has the company been innovative in the past 3 years? That is, has completely new product been developed within the last 3 years and/or was there an improvement of an existing product instead and/or was a new technology introduced, which has substantially changed the production of an existing product and or was there an organizational improvement in the company? (It is important to assess from the perspective of your business. It does not matter if another company has already introduced this innovation) | ||
Answer | Amount | Percentage |
Yes (Y) | 178 | 83.57% |
No (N) | 26 | 12.21% |
No answer | 9 | 4.23% |
What kind of innovation(s) were there in the last 3 years? | ||
Answer | Amount | Percentage |
Completely new product (1) | 96 | 45.07% |
Improvement of an existing product (2) | 103 | 48.36% |
Introduction of a new technology which has substantially changed the production of an existing product (3) | 74 | 34.74% |
Organizational improvement (4) | 70 | 32.86% |
Does the company run research and development? | ||
Answer | Amount | Percentage |
Yes (Y) | 134 | 62.91% |
No (N) | 70 | 32.86% |
No answer | 9 | 4.23% |
Does the company run such research and development activities continuously or only occasionally? | ||
Answer | Amount | Percentage |
Continuously (1) | 97 | 51.60% |
Occasionally (2) | 36 | 19.15% |
No answer | 55 | 29.26% |
What was the expenditure on research and development as a percentage of total sales in 2008? | ||
Answer | Amount | Percentage |
0% (1) | 2 | 1.06% |
More than 0–2.5% (2) | 8 | 4.26% |
More than 2.5–5% (3) | 24 | 12.77% |
More than 5–7.5% (4) | 21 | 11.17% |
More than 7.5–10% (5) | 19 | 10.11% |
More than 10% | 49 | 26.06% |
No answer | 65 | 34.57% |
In the last 3 years, has there been at least one application for a patent by the company, or is one currently in the application stage? | ||
Answer | Amount | Percentage |
Yes (Y) | 20 | 9.39% |
No (N) | 180 | 84.51% |
No answer | 13 | 6.10% |
Is it possible for the company without further ado to raise the necessary capital for new investments? | ||
Answer | Amount | Percentage |
Totally applies (1) | 35 | 16.43% |
Applies most of the time (2) | 55 | 25.82% |
Applies partially (3) | 47 | 22.07% |
Does not apply most of the time (4) | 41 | 19.25% |
Does not apply at all (5) | 18 | 8.45% |
No answer (6) | 17 | 7.98% |
How high is the equity ratio of the company? | ||
Answer | Amount | Percentage |
0% (1) | 0 | 0.00% |
More than 0–20% (2) | 42 | 19.72% |
More than 20–40% (3) | 36 | 16.90% |
More than 40–60% (4) | 24 | 11.27% |
More than 60–80% (5) | 16 | 7.51% |
More than 80% | 52 | 24.41% |
No answer | 43 | 20.19% |
Does the company currently receives venture capital, or has it ever received any? | ||
Answer | Amount | Percentage |
Yes (Y) | 33 | 15.49% |
No (N) | 167 | 78.40% |
No answer | 13 | 6.10% |
Has the company filed one or several patents or developed a prototype at the time it received venture capital? | ||
Answer | Amount | Percentage |
Yes, one or more patents (1) | 8 | 3.76% |
Yes, one or more prototypes (2) | 15 | 7.04% |
Neither (3) | 13 | 6.10% |
Has the influence of the venture capital company basically brought an added value to the company in terms of additional know-how and/or additional networks? Please rate on a scale from 1 to 5. | ||
Answer | Amount | Percentage |
Very high (1) | 0 | 0.00% |
High (2) | 10 | 6.45% |
Moderate (3) | 10 | 6.45% |
Low (4) | 5 | 3.23% |
No added value (5) | 6 | 3.87% |
No answer | 124 | 80.00% |
What was or is the added value to the company by the venture capitalist (or venture capital company)? | ||
Answer | Amount | Percentage |
Additional patent application (s) (1) | 0 | 0.00% |
A higher revenue growth than previously (2) | 7 | 3.29% |
Additional know-how and/or networks with other companies (3) | 16 | 7.51% |
Other | 2 | 0.94% |
How is the availability of qualified personnel in the labor market for the company-specific needs assessed? Please rate on a scale from 1 to 5 | ||
Answer | Amount | Percentage |
Very high (1) | 13 | 6.10% |
High (2) | 28 | 13.15% |
Moderate (3) | 82 | 38.50% |
Low (4) | 63 | 29.58% |
Very low (5) | 20 | 9.39% |
No answer | 7 | 3.29% |
Is the company a player in regional economic cluster? The term cluster means networks of closely cooperating companies, which are located in close proximity to each other and which are related or complement their activities, along one or more value chains. Are there other companies in your industry and your area with which the company maintains close economic cooperation? | ||
Answer | Amount | Percentage |
Yes (Y) | 87 | 40.85% |
No (N) | 116 | 54.46% |
No answer | 10 | 4.69% |
Is the company, in their own perception, an active participant in this cluster? Please rate on a scale from 1 to 5 | ||
Answer | Amount | Percentage |
Very active (1) | 19 | 10.86% |
Active (2) | 47 | 26.86% |
Neutral (3) | 16 | 9.14% |
Little active (4) | 5 | 2.86% |
Not active (5) | 0 | 0.00% |
No answer | 88 | 50.29% |
Do collaborations with other companies or research institutions (e.g., universities or research institution) happen in terms of research and development of new products/services? | ||
Answer | Amount | Percentage |
Yes, there is cooperation in terms of research and development with other companies (1) | 62 | 29.11% |
Yes, there is cooperation in terms of research and development with research institutions (2) | 45 | 21.13% |
No, there is no cooperation in terms of research and development (3) | 53 | 24.88% |
Did one or more patents develop from there collaborations, which otherwise would have probably not been developed? | ||
Answer | Amount | Percentage |
Yes (1) | 5 | 2.87% |
No (2) | 66 | 37.93% |
No idea (3) | 4 | 2.30% |
No answer | 99 | 56.90% |
How high would you estimate the value of cooperation in terms of new innovations for products/services? Please rate on a scale from 1 to 5. | ||
Answer | Amount | Percentage |
Very high (1) | 10 | 5.75% |
High (2) | 40 | 22.99% |
Moderate (3) | 25 | 14.37% |
Low (4) | 4 | 2.30% |
Very low (5) | 1 | 0.57% |
No answer | 94 | 54.02% |
Are the partners located in close proximity (less than 30 km) in terms of research and development of new products/services? | ||
Answer | Amount | Percentage |
All partners are located in close proximity (1) | 21 | 9.86% |
Most of the partners are located in close proximity (2) | 33 | 15.49% |
About half of the partners are located in close proximity (3) | 22 | 10.33% |
Few partners are located in close proximity (4) | 32 | 15.02% |
No partners are located in close proximity (5) | 26 | 12.21% |
No answer | 79 | 37.09% |
Please evaluate the supporting effect of politics on a positive business development (policies at regional level). | ||
Answer | Amount | Percentage |
Very high (1) | 15 | 7.04% |
High (2) | 36 | 16.90% |
Moderate (3) | 49 | 23.00% |
Little (4) | 44 | 20.66% |
Very little (5) | 54 | 25.35% |
No answer | 15 | 7.04% |
What is the annual turnover of the company? | ||
Answer | Amount | Percentage |
Less than 0.1 Mio. € | 6 | 2.82% |
More than 0.1 Mio. € to 0.5 Mio. € | 24 | 11.27% |
More than 0.5 Mio. € to 1 Mio. € | 28 | 13.15% |
More 1 Mio. € to 2.5 Mio. € | 63 | 29.58% |
More than 2.5 Mio. € to 5 Mio. € | 33 | 15.49% |
More than 5 Mio. € to 10 Mio. € | 16 | 7.51% |
More than 10 Mio. € to 50 Mio. € | 29 | 13.62% |
More than 50 Mio. € to 100 Mio. € | 8 | 3.76% |
More than 100 Mio. € to 500 Mio. € | 4 | 1.88% |
More than 500 Mio. € | 1 | 0.47% |
No answer | 1 | 0.47% |
What is the percentage of foreign sales to total sales (export earnings)? | ||
Answer | Amount | Percentage |
0 | 60 | 28.17% |
More than 0–20% | 94 | 44.13% |
More than 20–40% | 28 | 13.15% |
More than 40–60% | 12 | 5.63% |
More than 60–80% | 4 | 1.88% |
More than 80% | 3 | 1.41% |
No answer | 12 | 5.63% |
What is the annual average growth rate of the company’s turnover in the last five years? If the company does not yet exist for 5 years, please indicate the average annual growth rate since the start of business | ||
Answer | Amount | Percentage |
No growth or negative growth | 27 | 12.68% |
0–2.5% | 27 | 12.68% |
More than 2.5–5% | 29 | 13.62% |
More than 5–10% | 34 | 15.96% |
More than 10–20% | 30 | 14.08% |
More than 20–30% | 27 | 12.68% |
More than 30–50% | 8 | 3.76% |
More than 50% (8) | 14 | 6.57% |
No answer | 17 | 7.98% |
Has the company been innovative in the past 3 years? That is, has completely new product been developed within the last 3 years, and/or was there an improvement of an existing product instead, and/or was a new technology introduced, which has substantially changed the production of an existing product, and/or was there an organizational improvement in the company? (It is important to assess from the perspective of your business. It does not matter that another company has already introduced this innovation) | ||
Answer | Amount | Percentage |
Yes (Y) | 178 | 83.57% |
No (N) | 26 | 12.21% |
No answer | 9 | 4.23% |
What kind of innovation(s) were there in the last 3 years? | ||
Answer | Amount | Percentage |
Completely new product (1) | 96 | 45.07% |
Improvement of an existing product (2) | 103 | 48.36% |
Introduction of a new technology which has substantially changed the production of an existing product (3) | 74 | 34.74% |
Organizational improvement (4) | 70 | 32.86% |
Does the company run research and development? | ||
Answer | Amount | Percentage |
Yes (Y) | 134 | 62.91% |
No (N) | 70 | 32.86% |
No answer | 9 | 4.23% |
Does the company run such research and development activities continuously or only occasionally? | ||
Answer | Amount | Percentage |
Continuously (1) | 97 | 51.60% |
Occasionally (2) | 36 | 19.15% |
No answer | 55 | 29.26% |
What was the expenditure on research and development as a percentage of total sales in 2008? | ||
Answer | Amount | Percentage |
0% (1) | 2 | 1.06% |
More than 0–2.5% (2) | 8 | 4.26% |
More than 2.5–5% (3) | 24 | 12.77% |
More than 5–7.5% (4) | 21 | 11.17% |
More than 7.5–10% (5) | 19 | 10.11% |
More than 10% | 49 | 26.06% |
No answer | 65 | 34.57% |
In the last 3 years, has there been at least one application for a patent by the company, or is one currently in the application stage? | ||
Answer | Amount | Percentage |
Yes (Y) | 20 | 9.39% |
No (N) | 180 | 84.51% |
No answer | 13 | 6.10% |
Is it possible for the company without further ado to raise the necessary capital for new investments? | ||
Answer | Amount | Percentage |
Totally applies (1) | 35 | 16.43% |
Applies most of the time (2) | 55 | 25.82% |
Applies partially (3) | 47 | 22.07% |
Does not apply most of the time (4) | 41 | 19.25% |
Does not apply at all (5) | 18 | 8.45% |
No answer (6) | 17 | 7.98% |
How high is the equity ratio of the company? | ||
Answer | Amount | Percentage |
0% (1) | 0 | 0.00% |
More than 0–20% (2) | 42 | 19.72% |
More than 20–40% (3) | 36 | 16.90% |
More than 40–60% (4) | 24 | 11.27% |
More than 60–80% (5) | 16 | 7.51% |
More than 80% | 52 | 24.41% |
No answer | 43 | 20.19% |
Does the company currently receives venture capital, or has it ever received any? | ||
Answer | Amount | Percentage |
Yes (Y) | 33 | 15.49% |
No (N) | 167 | 78.40% |
No answer | 13 | 6.10% |
Has the company filed one or several patents or developed a prototype at the time it received venture capital? | ||
Answer | Amount | Percentage |
Yes, one or more patents (1) | 8 | 3.76% |
Yes, one or more prototypes (2) | 15 | 7.04% |
Neither (3) | 13 | 6.10% |
Has the influence of the venture capital company basically brought an added value to the company in terms of additional know-how and/or additional networks? Please rate on a scale from 1 to 5 | ||
Answer | Amount | Percentage |
Very high (1) | 0 | 0.00% |
High (2) | 10 | 6.45% |
Moderate (3) | 10 | 6.45% |
Low (4) | 5 | 3.23% |
No added value (5) | 6 | 3.87% |
No answer | 124 | 80.00% |
What was or is the added value to the company by the venture capitalist (or venture capital company)? | ||
Answer | Amount | Percentage |
Additional patent application (s) (1) | 0 | 0.00% |
A higher revenue growth than previously (2) | 7 | 3.29% |
Additional know-how and/or networks with other companies (3) | 16 | 7.51% |
Other | 2 | 0.94% |
How is the availability of qualified personnel in the labor market for the company-specific needs assessed? Please rate on a scale from 1 to 5 | ||
Answer | Amount | Percentage |
Very high (1) | 13 | 6.10% |
High (2) | 28 | 13.15% |
Moderate (3) | 82 | 38.50% |
Low (4) | 63 | 29.58% |
Very low (5) | 20 | 9.39% |
No answer | 7 | 3.29% |
Is the company a player in regional economic cluster? The term cluster means networks of closely cooperating companies, which are located in close proximity to each other and which are related or complement their activities, along one or more value chains. Are there other companies in your industry and your area with which the company maintains close economic cooperation? | ||
Answer | Amount | Percentage |
Yes (Y) | 87 | 40.85% |
No (N) | 116 | 54.46% |
No answer | 10 | 4.69% |
Is the company, in their own perception, an active participant in this cluster? Please rate on a scale from 1 to 5 | ||
Answer | Amount | Percentage |
Very active (1) | 19 | 10.86% |
Active (2) | 47 | 26.86% |
Neutral (3) | 16 | 9.14% |
Little active (4) | 5 | 2.86% |
Not active (5) | 0 | 0.00% |
No answer | 88 | 50.29% |
Do collaborations with other companies or research institutions (e.g., universities or research institution) happen in terms of research and development of new products/services? | ||
Answer | Amount | Percentage |
Yes, there is cooperation in terms of research and development with other companies (1) | 62 | 29.11% |
Yes, there is cooperation in terms of research and development with research institutions (2) | 45 | 21.13% |
No, there is no cooperation in terms of research and development (3) | 53 | 24.88% |
Did one or more patents develop from there collaborations, which otherwise would have probably not been developed? | ||
Answer | Amount | Percentage |
Yes (1) | 5 | 2.87% |
No (2) | 66 | 37.93% |
No idea (3) | 4 | 2.30% |
No answer | 99 | 56.90% |
How high would you estimate the value of cooperation in terms of new innovations for products/services? Please rate on a scale from 1 to 5 | ||
Answer | Amount | Percentage |
Very high (1) | 10 | 5.75% |
High (2) | 40 | 22.99% |
Moderate (3) | 25 | 14.37% |
Low (4) | 4 | 2.30% |
Very low (5) | 1 | 0.57% |
No answer | 94 | 54.02% |
Are the partners located in close proximity (less than 30 km) in terms of research and development of new products/services? | ||
Answer | Amount | Percentage |
All partners are located in close proximity (1) | 21 | 9.86% |
Most of the partners are located in close proximity (2) | 33 | 15.49% |
About half of the partners are located in close proximity (3) | 22 | 10.33% |
Few partners are located in close proximity (4) | 32 | 15.02% |
No partners are located in close proximity (5) | 26 | 12.21% |
No answer | 79 | 37.09% |
Please evaluate the supporting effect of politics on a positive business development (policies at regional level) | ||
Answer | Amount | Percentage |
Very high (1) | 15 | 7.04% |
High (2) | 36 | 16.90% |
Moderate (3) | 49 | 23.00% |
Little (4) | 44 | 20.66% |
Very little (5) | 54 | 25.35% |
No answer | 15 | 7.04% |
To what extent do barriers of large companies prevent or hinder an involvement in networks? Please rate on a scale from 1 to 5 | ||
Answer | Amount | Percentage |
Very high (1) | 24 | 11.27% |
High (2) | 39 | 18.31% |
Moderate (3) | 44 | 20.66% |
Low (4) | 41 | 19.25% |
Very low (5) | 20 | 9.39% |
No answer | 45 | 21.13% |
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Schröder, C. (2012). Differences Between High-Growth and Low-Growth ICT Firms in Germany. In: Welfens, P. (eds) Clusters in Automotive and Information & Communication Technology. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-25816-9_5
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