[ Back to EurekAlert! ] Public release date: 19-Jul-2012
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Contact: Aitziber Lasa Iglesias
a.lasa@elhuyar.com
34-943-363-040
Elhuyar Fundazioa

Micro businesses' role for a more competitive agricultural food sector in Spain

This release is available in Spanish.

Pablo Murta Albino studied the situation of the agricultural food industry in Spain from the perspectives of competitiveness, growth and performance. Having taken the financial state of 12,000 businesses between the years 1994 and 2007 as a basis, this researcher stressed the important role that micro businesses have had on the growth of the sector and concludes that "the agricultural food industry has taken on the challenge of improving its competitive position, showing better results than the average for the industrial sector, despite being basically made up of small businesses".

His thesis "The agricultural food industry in Spain: competitiveness, growth and performance" was directed by lecturer Ms Katrin Simón Elorz, of the Department of Business Management at the Public University of Navarre and Doctor Francisco Javier Arcelus Ulibarrena from the University of New Brunswick (Canada), and received a cum laude unanimously.

The agricultural food industry in Spain represents 18% of the volume of business in the industrial sector and generates 17% employment, involving more than 30,000 active businesses. Amongst the data gathered by Mr Murta in order to analyse the possibilities of the competitiveness of this sector, micro businesses (companies with less than 10 employees), were considered to be of special relevance for inclusion for their role in maintaining the agricultural food industry, given that they represent 79% thereof.

Results and gazelle businesses

The research presents a clear picture of the possibilities of competitiveness in this sector and grouped under three aspects: the role of the agricultural food industry in regional development, the size and growth of the sector, and the manner in which business decisions affect the performance shown by companies.

With respect to the role of the agricultural food industry in regional development and factors that can affect its competitiveness, such as the region and the activity sector, the results indicate that "a certain convergence has arisen between sectors and regions, although at a pace less than expected. The trend in the result variables has been positive and growth has taken place over time, with important improvements in the industries located in the Ebro Valley".

As regards questions related to the size and growth of the agricultural food industry, Mr Murta pointed out that "an increase in the average size of these industries is required, but it has also been seen that many of these smaller-sized businesses have obtained greater advantages, both in technological intensity as well as in labour costs - a flexibility which enables them maintain their market position".

Finally, as regards how business decisions affect the performance of companies, the presence of gazelle businesses as driving forces in the market were analysed. "Gazelle businesses", explained the researcher, "are those with growth rates greater than 20% over three consecutive years. The results tell us that there are high-growth, small-sized business enterprises which take advantage of their flexibility in order to enter the market and find a position of competitiveness".

The PhD thesis also makes reference to the problems of companies in gaining access to sources of financing, "access which would enable them to improve their position of competitiveness, and thus boost their growth without prejudicing their solvency".

In conclusion, the author stresses the important role that micro businesses have on the development of the sector. "The finding of gazelle businesses, these high-growth companies", he added, "should give encouragement to certain policies for promoting the creation of enterprises". In this context, he believes that "there are real possibilities for growth for these companies, without losing control, thus enabling an increase in production and profit".

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