Identifying and gauging business innovation

How do we identify, select, then classify the most innovative European SMEs? True, in some countries, there exist national agencies dedicated to innovation, such as the Oséo in France. But when such agencies award annual prizes, they sometimes attribute accolades to large companies, or even clusters… On a European level, it is particularly common to find grants awarded to research programmes or specific projects, as well as innovation measurement studies in different EU countries, in the context of national public policies. These are highly informative studies, but they contain little (or no…) concrete examples.
The ranking established by Commerce International relies on a study undertaken by the auditing and consultancy firm Deloitte. Published each year, the Technology Fast 500 for the EMEA (Europe, Middle East and Africa) zone is a reference list in the technology sector. It classifies companies according to a single criteria: the progression (in terms of percentage) of turnover in the last five years. Companies that so wish can participate at no charge in a national or regional (for Central Europe) ranking – in 2008, there were 18 Fast 50 programmes for 23 countries –, and it is the 500 most high-performance of these that make up the Fast 500 EMEA.
The conditions for taking part in these competitions: firstly, the candidate must be a technology company, in other words, “must own proprietary intellectual property or proprietary technology […], manufacture a technology product or devote a significant proportion of revenues to research and development of technology”; next, the company must have operating revenues of at least 50,000 euros (sometimes more in certain countries – 76,000 euros in France, for example) in the base year (2003 for the 2008 ranking); the company must be in business for at least five years; finally, the company must not be held by another group by over 50%.
“Globally, we identify the innovative technology companies that have made the highest progressions in turnover,” indicates Grégoire Louvieaux, Manager of the French Fast 50. “The criterion of a minimum of 5 years of existence moreover means that almost all ranked companies are profitable and have increasing staff numbers. Finally, this ranking is mainly composed of large SMEs that have an average turnover of between 15 and 20 million euros.”
As far as the countries go, the Deloitte survey covers a geographical zone wider than the European Union (notably Israel, Russia and Turkey) – these countries do not feature on our own ranking, which is limited to EU members. On the other hand, the Technology Fast 500 neglects a certain number of EU countries, which – unfortunately – are also absent from our Top 50. This is the case of Luxembourg, Belgium, Slovenia, Italy, Cyprus, Spain, Malta and Greece.
“In certain countries, the Deloitte teams invest less in the technology sector,” explains Grégoire Louvieaux. “But this does not mean that technological innovation is entirely absent here. This is explained by the choice of the national firm not to carry out a listing in its country. Indeed, the national firm is under no obligation to the group: everything is done on a voluntary basis.” As for Croatia, Latvia, Lithuania and Portugal, countries which took part in a Fast 50, these are also missing from our ranking as none of their companies were classified amongst the Deloitte top 500.
In terms of the spread of various nations, Commerce International has endeavoured to compensate for certain distortions of the Technology Fast 500 regarding country weight in terms of innovation, as established by the agency PRO INNO Europe (see two graphs). It is thus that nations are ranked as follows: United Kingdom (9 companies), Sweden (8), France (7), the Netherlands (6), Germany and Finland (4), Ireland (3), Denmark (2), Bulgaria, Estonia, Hungary, Poland, the Czech Republic, Romania and Slovakia (1).
Regarding sectors of activity, the Deloitte study places a focus on companies for software development (197 out of 500), the Internet (98) and network/ telecommunications (64) sectors, ahead of companies for electronic components (41), the health sector (32) and IT devices (13). This spread has an impact on our Top 50, from which are also excluded companies employing over 500 persons. Finally, and above all, the 50 companies that we have selected have been ranked according to our own criteria: the degree of innovation, the weight of a company on its market, and the interest value of its products and services.