High Growth Initiatives in Denmark

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1 High Growth Initiatives in Denmark
Thomas Blomgren-Hansen

2 A few figures on Danish HGIEs
Presentation title – Insert by clicking Insert>Header & Footer Only 1 % of start-ups 2003 were high growth companies in 2008 Number of high growth start-ups has fallen fra 300+ before the crisis to app. 200 Only 8 Danish companies established within the past 30 years have passed either 1000 employees or top 100 turnover Bynavn, xx.xx.xxxx - Navn og efternavn - Ændres via Indsæt>Sidehoved & Sidefod

3 Danish initiatives with specific growth focus
Presentation title – Insert by clicking Insert>Header & Footer Gazelle programme (ended 2010) Advice and funding for young growth companies. MIT inspired. Hand pick companies, make them grow to 250+ employees Accellerace (started 2008) Advice and funding for small innovative companies Train and learn entrepreneurship Growth fund Seed and venture capital for growth companies Innovation incubators Seed pre-seed capital for young innovative companies Bynavn, xx.xx.xxxx - Navn og efternavn - Ændres via Indsæt>Sidehoved & Sidefod

4 Why so few initiatives Presentation title – Insert by clicking Insert>Header & Footer Some scepticism about the effectiveness of our efforts Existence of HGIEs doesn’t neccessarily make support easy and effective: How to support succesful enterprises? Why support companies which have already proven succesful? Heterogeneous group of companies Exist in all sectors and not necessarily young (70% more than 5 years) Unstable and unprdictable growth Almost unheard that a company appear as HGIE three years running Finding HGIEs ex-ante No common characteristics makes them difficult to spot and target Bynavn, xx.xx.xxxx - Navn og efternavn - Ændres via Indsæt>Sidehoved & Sidefod

5 Our own experience HGIEs don’t come from university spin-outs
Presentation title – Insert by clicking Insert>Header & Footer HGIEs don’t come from university spin-outs 18 new spin-outs in 2012 and total ownership in 49 companies Total income from spin-outs EUR 12 mill. 73 % from one spin-out Protection of IPR cost EUR 4,5 mill. Gazelle growth did not reach goal Expected 75% of participators would increase employment by 20% a year over 3 years 27% met the goal, additionally 10% reached the range 13-20% Bynavn, xx.xx.xxxx - Navn og efternavn - Ændres via Indsæt>Sidehoved & Sidefod

6 Our own experience Presentation title – Insert by clicking Insert>Header & Footer Poor succes from seed capital (Innovation incubators) Pure financial return -80% Lower survival rate than match (Not significant) Lower turnover than match (Not significant) Lower Value added than match (Not significant) Not signicantly different from match despite less sustainable without the incubators Other effects? Bynavn, xx.xx.xxxx - Navn og efternavn - Ændres via Indsæt>Sidehoved & Sidefod

7 Our own experience Limited success from Accellerace (since 2008)
Presentation title – Insert by clicking Insert>Header & Footer Limited success from Accellerace (since 2008) Provided advice and funding for 200 companies 400 new jobs Raised EUR 72 mill. (incl. state funding EUR app. 15 mill) Impressive survival rate of 94% Danish Growth Fund (since 1992) Provided EUR 0.3 Bn investment (Direct) 3,600 jobs created and GDP increase EUR 0.3 Bn incl. effects from involvement in venture funds (EUR 0,35 Bn) Societal effect over a 3 year period: 1,1 mill. GDP increase pr. mill. directly invested 14 new jobs pr. mill. invested Bynavn, xx.xx.xxxx - Navn og efternavn - Ændres via Indsæt>Sidehoved & Sidefod

8 Conclusions Acting on very limited knowledge
Presentation title – Insert by clicking Insert>Header & Footer Acting on very limited knowledge Unpredictable and unstable group Unclear whether targeted initiatives are superior to a general improvement of the framework companies Bynavn, xx.xx.xxxx - Navn og efternavn - Ændres via Indsæt>Sidehoved & Sidefod