Strategic governmental economic activities in support of young French SMEs

Abstract

Purpose

The purpose of this paper is to closely study young French small and medium enterprises (SMEs). The authors highlight the structure of these target firms and build a typology of corresponding business models.

Design/methodology/approach

The authors used a dataset of 38,000 young French SMEs. It is constituted of all individual and consolidated year‐end financial statements submitted by French firms to the commercial court. Data analysis techniques (principal component analysis then hierarchical and ascending classification) were used on the data.

Findings

The business models stemming from this typology are typical (to the greatest extent possible) and actionable. The authors are particularly interested in identifying groups of SMEs where government assistance would be particularly effective and strategically valuable for the national economy.

Practical implications

One of the authors' conclusions is that the typology is not based on a classical growth model that reflects progressive phases of development in the life of a young firm. Furthermore, it is ineffective and wasteful to focus government assistance efforts on firms based on their age. The authors identify groups of business models where assistance would be more efficient and strategically more effective.

Originality/value

It is notable that this paper relies not upon a sample, but upon the exhaustive collection of all available data on the subject. This research questions the allocation efficiency of governmental assistance on the basis of growth models. It intends to provide a better understanding of the criteria that should be taken into account to enhance targeting of assistance toward businesses with the greatest potential for the nation.

Citation

Branchet, B., Augier, B., Boissin, J. and Quere, B. (2011), "Strategic governmental economic activities in support of young French SMEs", Journal of Small Business and Enterprise Development, Vol. 18 No. 2, pp. 384-402. https://doi.org/10.1108/14626001111127133