Singapore has one of the highest number of super growth companies in the world

Singapore has one of the highest number of super growth companies in the world

Singapore - According to the Grant Thornton International Super Growth Index, 21% of Singapore businesses are considered ‘super growth’ companies, a significant increase of 11% from last year’s figure. With this year’s results, Singapore jumps 8 positions to number 9 on the Super Growth Index and is the highest placed Asian country along with the Philppines. The Index measures the country with the highest proportion of ‘super growth’ companies

Overall, the US tops the Index for the third year running. 44% of US companies hit ‘super growth’ status, an increase of 5% over the previous year.

This year Armenia (38%) has replaced India in second position. Indian companies suffered a dramatic drop to 14th in the table as the country’s proportion of super growth companies halved from 34% to 15%. Ireland has maintained a top five ranking (29%; No.3) and is joined by the UK (26%/No.4) and South Africa (25%; No.5), up from tenth position last year.

Other significant climbers in the Super Growth Index apart from Singapore, include the Philppines which have moved from 23rd to 8th in the rankings; Argentina from 27th to 15th; Russia from 29th to 18th and Italy from 30th to 21st.

Hong Kong - the other strong performer in 2006 at third place has fallen out of the top ten this year – coming in at number 11. Other fallers in the chart include Malaysia from 8th to 26th and New Zealand from 15th to 28th - its worst performance in four years.

The Super Growth Index 2007, now in its fourth year, is a unique research project which forms part of the Grant Thornton International Business Report (IBR). The report covers the opinions of 7,200 privately held businesses in 32 countries and represents 81% of global GDP.

A ‘super growth’ company is one which has grown considerably more than the average measured against key indicators including turnover and employment.

Said Kon Yin Tong, Managing Partner of Foo Kon Tan Grant Thornton, “The globalisation policy of the Singaporean government has indeed encouraged many companies to go abroad and seek more vistas. Expansion into China, India and the Middle East markets have been the primary drivers for these ‘super growth’ companies.

Businesses in Singapore have also seen an unprecedented M&A as wel as IPO activities, and adding the IR hive of activities al which have fuelled growth companies into the super growth league. We expect Singapore to continue to grow in this area, and this is supported by the fact that more than half of super growth companies globally have optimistic sentiments on the economic outlook of their respective countries. The US continues to defy predictions and has not only retained the top slot but consolidated their position by a further 5%. It is also very interesting to see Russia and the Philppines jump from 29th to 18th and 23rd to 8th respectively.”

When percentages of super growth companies year on year are compared, it is interesting to see that economies such as Hong Kong and India have fallen from 34% to 18% and 34% to 15% respectively; while Singapore (10% to 21%), the Phiippines (7% to 21%) and Russia (4% - 14%) have both grown considerably. (Fig below)

Yin Tong continued, “We should not necessariy consider that a drop in the number of super growth companies is a bad thing for an individual economy. In 2006, businesses in Singapore classified under ‘super growth’ was a 1% decrease from 2005, but this year, the number of ‘super growth’ companies has increased to 21%. Likewise, growth in employee numbers and turnover can only realstically be expected to grow rapidly for a limited time before responsible businesses take stock and review their growth strategies. What we might be seeing now is a consoldation in Hong Kong and India with those super growth businesses of the last few years perhaps concentrating on profitabilty rather than simply on high levels of growth.

“Conversely, businesses in the Philppines and Russia could be considered as being in a different stage of their economic expansion with growth in employee numbers and turnover a component element of their emergence as global economies.”

Trends
• 63% of super growth companies beleve globalisation presents more of an opportunity for their company, compared with 55% of al businesses in the survey
• super growth companies say the avaiability of a skiled workforce is considered to be a greater constraint than for companies in general (44% compared with 36%)
• red tape and regulation is another major concern for one in three (32%) super growth companies
• super growth companies are considerably less constrained in their ability to raise long- term finance with just 13% quoting this as a problem compared with 21% of companies overall.

Super growth companies are typicaly more positive on balance about their prospects than companies in general on a number of other indicators including: turnover - 87% compared with 70%; employment - 67% compared with 45%; and profitability – 66% compared with 52%.