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High-growth companies difficult to identify

High growth businesses (known in Belgium as “EFCs”), which generate a significant share of added value and jobs in the Belgian economy, are active within several activity sectors. There were 336 such businesses in Wallonia during the period from 2012 to 2015, the Walloon Union of Businesses (“the UWE”) indicates in the 2017 version of its “Study upon the Position of Businesses.” High growth in these businesses is temporary, and leading a specific aid policy is difficult. EFCs each have their characteristics and growth trajectories, and are difficult to identify using conventional determinants.

The OECD says EFCs are defined as businesses with at least ten employees, seeing an average annual growth in added value or workforce numbers of more than 20% over three years. The UWE reveals that such businesses are not only found in innovative high technology sectors. Neither are they necessary businesses in their infancy. The average is 18 years for EFCs “adding value” and 14 years for EFCs “with job increases of more than 20%.”

Although their high growth is a temporary phenomenon, three Walloon businesses saw added value of more than 20% between 2015 and 2017. These were Diagenode (bio-tech sector), Fact Group (security) and Clixxs (home and care services).

The UWE says that high growth has resulted from particular circumstances, each EFC having its own growth trajectory. The general characteristics are therefore difficult to demonstrate, the personality and the motivation of the business leader being an important factor. Hence the difficulty to implement specific support policies for EFCs.

The pilot project known as “Scale up” put forward by the Agency for Business and Innovation (“AEI”), if it is taken up by the new Walloon government, will consequently be monitored and evaluated to avoid errors. The UWE says that the priorities to support EFCs should, in any case, improve training and the operation of the employment market. This will better coordinate growth support initiatives, and create a stimulating tax and administrative framework in which to operate.

The Brussels Times