What are gazelles?

This following is taken from the mini-study framework.

1. Background
Fast growing companies, the so-called “gazelles”, are considered as a driving force for competitiveness, innovation and employment. However, empirical evidence suggests that the majority of new firms neither innovate nor grow, nor they even intend to do so. For example, in Finland only about 5-10% of new firms can be considered as innovative[1]. This raises the question how the emergence of gazelles can be further fostered and what is the role of public policy in promoting the development of gazelles.

To address these questions requires a better understanding of the characteristics of gazelles. What differentiates gazelles from ordinary entrepreneurial firms? What are the drivers behind their growth and what kind of barriers may hinder their development? And finally, what are their specific needs which should be addressed by public policies?

2. Objectives of the Study
The purpose of this mini-study is to serve as input for an INNO-Views Workshop on gazelles, which will take place in April 2007. In particular, the study will set the scene for the first part of the workshop, which will focus on the role and importance of gazelles for innovation and competitiveness and the question how to further stimulate their development.

The study should focus on the following points:

• Definition of the concept of gazelles, taking into account the available literature and the results of the Europe INNOVA innovation panel on gazelles. Questions to be addressed include:

1. What are the characteristics of a typical gazelle? How can gazelles be defined and measured? Should they only be defined on the basis of growth rates at early stages or their ambition to reach market leadership should be taken into account as well?
2. How does the growth path of a typical gazelle look like? What happens to gazelles after a period of fast-growth? Do they keep their entrepreneurial independency or are they taken over by larger firms? What is, from an economic point of view, more desirable?

• Presentation of the main findings on the economic relevance and importance of gazelles for competitiveness and innovation, based on available studies and economic analysis. Questions to be addressed include:

1. What is the economic importance of gazelles for innovation? How many start-up’s are innovative and fast growing? How many new jobs are created by them?
2. What is the importance of proximity to universities, clusters or business angels? Do cultural differences play a role in this? In which economic and social environment gazelles flourish best? What is the importance of proximity to universities, clusters or business angels? Do cultural differences play a role in this?

• Identification and analysis of potential drivers and barriers for the development of gazelles. Questions to be addressed include:

1. What do gazelles like, what not? What do they expect from politics? Are there expectations different from other enterprises?
2. To which extend do legal or financial barriers hinder the development of gazelles? Or are they making their way anyway?

3. Timetable & follow-up
A first draft outline should be available by mid February 2007 and the final version of the mini-study should be ready by end of March 2007.

The study should be maximum 30 pages. It should be conducted on the basis of desk research with full documentation of available sources and should take into account the outcome of the discussions of the Europe INNOVA innovation panel on gazelles.