ECONOMY

Survey shows size of firm irrelevant to job creation

Fast-growing companies are the main job creators, and even though they may be of small or medium size, they offer proportionately more employment opportunities than do many large enterprises, according to a study prepared by the Federation of Greek Industries (SEV) on industry’s contribution to employment in the 1998-2002 period. The study is a follow-up to a 2001 report on the decade 1990-2000, and it shows that the average rise in employment improved to 9.85 percent from 5.54 percent in 1990-2000. In absolute numbers, small enterprises were found to need a much smaller rise in sales in order to generate one additional work position. This rise was estimated at 190,000-200,000 euros, while the corresponding sales increment of large companies varied between 380,000 and 1,320,000 euros. The SEV study analyzes data from the balance sheets of 3,021 manufacturing firms, and arrives at roughly the same conclusions as its 1990-2000 forerunner. The 604 fastest-growing profitable firms were the chief contributors to employment, generating 18,000 jobs between 1998 and 2002; this represented 64 percent of the total rise in employment throughout the economy. By contrast, the slower growing and declining firms, irrespective of size, made minor or negative contributions to employment. The 3,021 companies surveyed created 21,473 jobs between 1998 and 2002, increasing their employment from 198,301 to 219,774. The slower growing or declining firms saw their total employment fall by 5,149 positions, while their average number of employees fell from 41 to 32 in that period. In the firms that recorded a moderate rate of growth, the number of jobs rose by 8,478, or 6.4 percent. The average number of employees in this category rose from 73 in 1998 to 78 in 2002. The development of employment in this category was independent of size of firm. In all sizes of moderately growing firms, the growth varied between 2.1 percent and 8.6 percent. In the fastest growers, a total of 18,144 jobs, or 44 percent, were added to the 41,370 of 1998. The average number of jobs in this category rose from 68 in 1998 to 99 in 2002. The study shows that while the three categories of firms (of fast, moderate or slow growth) had only small differences in the average size of employment in the starting year 1998, the fastest-growing ones employed on average more than three times the number of slow-goers.