World league table of ‘super-growth’ companies: US keeps top slot, but india and hong kong catching up fast

• Super growth companies 23 per cent more likely to export
• Access to finance a competitive advantage for super growth companies
• Italy, Russia and Turkey come bottom; Greece shows sharpest fall

For the second consecutive year the US tops the Grant Thornton International Super Growth Index, for the country with the highest proportion of “super growth” companies (39 per cent). Despite scoring the highest ranking, however, the proportion of super growth companies in the US actually fell by nine per cent. In contrast, the booming economies of India and Hong Kong surged ahead to take joint second place. With more than a third of companies (34 per cent) achieving super growth status, both countries were within reach of challenging the US for the top slot on the Index.

Other strong performances came from Sweden (31 per cent), which climbed back up the Index to third position after dramatically falling to tenth last year from first position in 2004; and Ireland (26 per cent), the United Kingdom (23 per cent) and Canada (23 per cent) which took the next three super growth rankings. Sweden’s resurgence was a reflection of a recovery in domestic spending and increased business investment.

The Super Growth Index 2006, now in its third year, is a unique research project which forms part of the Grant Thornton International Business Owners Survey (IBOS) which surveys more than 7,000 business owners worldwide in 30 countries.

A ‘super growth’ company is one which has grown considerably more than the average measured against key indicators including turnover and employment. This year the survey established that super growth companies are 23 per cent more likely to export than ordinary companies. Also, super growth companies were far less constrained by the ability to finance expansion of their business. For example, cost of finance was an issue for 50 per cent more ordinary companies than super growth companies; as was shortage of working capital (47 per cent); and shortage of long term finance (58 per cent).

Said Andrew Godfrey, partner from Grant Thornton: "The US continues to perform relatively well, reflecting the inherent dynamism of its economy which saw buoyant consumer demand, strong capital investment and robust export growth. But the real story is the continuing rise of Indian and Hong Kong companies, as their economies boom and productivity continues to surge. On current trends, there is every chance that we could see a change in the top ranking next year. The other interesting finding is that super growth companies appear to have a competitive advantage as they are not constrained by access to expansion finance."

Italy, Russia and Turkey jointly shared the bottom position in the Super Growth Index. Italy’s rank appears to reflect the sustained malaise affecting the economy with weak consumer demand, falling investment and shrinking industrial output. Italy’s ranking has fallen in each of the past three years of the Index.

Super growth companies are very positive about prospects for their business. A balance of thirty six* per cent predict increasing the selling price of their goods and services compared to twenty nine per cent of companies in general. Super growth companies are also a third more positive about increasing the level of exports this year (32 per cent compared to 20 per cent) and are looking to make greater investments in their businesses (37 per cent compared to 28 per cent investing in new buildings; 51 per cent compared to 43 per cent investing in new plant and machinery).

Mainland China was included in the Index for the first time this year – and came in 14th position, with 14 per cent of its companies classified as super growth. It will be hard for Mainland China to achieve greater super growth status until more companies experience rapid expansion both in terms of turnover and employment. Mainland China joined Germany (15 per cent) and Japan (15 per cent) in mid-table.

The sharpest fall in the rankings was seen in Greece, down from 9th to 21st position as the proportion of super growth companies fell from 15 to 8 per cent, partly in response to the end of the Olympic Games spending windfall.

Ends

Notes to editors

The Grant Thornton International Business Owners Survey (IBOS) was carried out among more than 7,000 owners of medium-sized businesses from 30 countries during Autumn 2005. IBOS began in 2002 and builds on the European Business Survey (EBS) which Grant Thornton ran from 1993 to 2001. The research was conducted by Experian Business Strategies Limited and Harris Interactive.

*The figure is the percentage balance of the respondents who are optimistic and those who are pessimistic.

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