DETERMINANTS FOR FOSTERING HIGH GROWTH ENTERPRISES IN REPUBLIC OF NORTH MACEDONIA
DETERMINANTS FOR FOSTERING HIGH GROWTH ENTERPRISES IN REPUBLIC OF NORTH MACEDONIA

Summary/Abstract: High growth enterprises are attracting the attention to both economic theoreticians and practitioners. Namely, among all enterprises, there is a group of enterprises which show high growth and contribute in large extent to the economic development of the countries. In fact high growth enterprises are considered as drivers of the innovation, twin transition and structural transformation of the countries. This is why, researchers and especially policy makers are interested to find out more behind the factors or determinants which triggers the growth of these enterprises. The reasoning behind this paper is to analyse what high growth enterprises represent, what are their characteristics, the different definitions used, than to analyse literature which focuses on the causality between high growth of companies and certain aspects of economic development, EU policies aimed at high growth potential (HGEs) enterprises, in order to be able to make a comparative analysis using available statistical data and draw conclusions and policy recommendations for fostering HGEs in Republic of North Macedonia. Analysis showed that only 2% of all companies in the country are contributing to 20% of employment. Still, most of them are found in traditional service sector followed by manufacturing, unlike the HGEs in EU where they are mostly found in knowledge intensive service sector. The main conclusion is that instead of policy mix to support local champions, government should be more focused on developing policy framework to back enterprises which have the potential to grow fast. To do that, government needs to create framework conditions which will enable companies to grow, but also to create tailored made instruments and policies which will back companies with high growth potential. The firms to be targeted are not those that would grow in any case, but those for which policy intervention would make a difference. Given the fact that HGEs are considered as drivers of innovation and technological advancement, EU is putting them high on their policy agenda. Therefore, aligning policy objectives of North Macedonia with the ones of EU in the area of SMEs with special focus on start-ups and scale-ups with potential to grow should be imperative for policy creators.

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