Ontario Growth Firm Study

Ontario officials conducted an interesting study of growth firms in the province. While the study is a few years old, it is nevertheless quite interesting.

Four types of firms wereexamined in the study — hyper-growth and controlled-growth firms (both components of leading growth firms), non-expansionary SMEs and large firms — all show distinct dynamics of growth and decline, though the findings show significant similarities between controlled-growth firms and non-expansionary SMEs.

Over the entire 12-year period from 1986 to 1998, it would have been difficult for any firm to grow as rapidly as it did during the boom years of 1986 to 1989. And, indeed, the study found that none of the four groups of firms came even close. The strongest growth in the final two periods came from hyper-growth firms, which added 11% to their employment in the fourth period. This was a long way from the 132% of the first period, but well ahead of the performance of other firms.

The study's findings are compared in the context of seven situations below, providing the major highlights of the research:

• Performance in boom periods
• What happened in the 1990 recession
• How firms bounced back from the recession
• Failure rates
• The extraordinary performance of the firms that never declined
• The scorecard at the end of the 12-year period
• Contribution to job creation

In addition, the characteristics of leading growth firms are discussed at the end of this section.

The growth of the hyper-growth firms was spectacular, and provided the first indication that they were quite distinct from all other firms.

Employment in controlled-growth firms grew by 29% during 1986 to 1989. (This growth is less than the criterion of 40%, but the criterion refers to payroll
growth, not employment growth, and payroll usually grows faster than employment.)

More here.