finland_sweden_denmarkKauppalehti reports on some fascinating results from research conducted by Balance Consulting on the effects of growth companies in the Finnish economy. While I realise this data is very Finland centric and might not be of that much interest to others – I am sure these results will resonate in similar manner in other countries. We wrote about this in 2008 as well and it seems that the data, some one and a half years later is still very valid. The study was conducted by looking at companies whose revenue is above 1,7 million euros annually and belong to the Balance Consulting corporate databse. While the database is very thorough, it does leave a lot of the younger startups out.

During the time period of 6 years, growth companies have multiplied their workforce ten-fold while the average Finnish company has increased its workforce by a multiplier of 1,2. Something else that adds to the importance of these growth companies in Finland is the fact that while they have increased their workforce ten-fold their turnover has increased 17-fold. These are figures that no one can question.

Looking at the revenue side of things, the largest growth company churned over 51 million euros in profit. In total, the Finnish government has received over 100 million euros in taxes and other social benefits from just a few growth companies. On another note, it was also found in the study that the best companies have on an average over 50% return on equity – something most of the companies find astronomical.

In this study, growth companies had to fill a set of different criteria. These included the need for turnover to be above 1,7 million euros, but also the fact that revenue had to grow more than 50% annually, three years in a row. The latter of course being a very strict factor, diminishing the size of the population.

The downside, something we here at ArcticStartup would also like to see changed, is the small amount of these growth companies. Only 91 companies fit the criteria in the study. The question still remains for the politicians and government in general, where would the Nordic and Baltic countries be in the future if we managed to raise the importance of these companies to our economy and policy making?

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