Why do some SME's become high-growth firms? The role of employee competences

Abstract

PurposeHigh-growth firms generate a large share of new jobs and are thus the key drivers of innovation and industry dynamics. As the employees' education supports innovation and productivity, this article hypothesizes that employee competences explain high growth.Design/methodology/approachThe study approaches this by examining intangible capital and specialized knowledge to evaluate how these characteristics support the probability of becoming a high-growth firm. The estimation uses linked employer–employee data from Danish registers from 2005 to 2013.FindingsAs the authors measure high growth with the size-neutral Birch index, they can examine the determinants of high growth across different firm size classes. The findings imply that intangible capital relates positively to the firm's high growth.Originality/valuePrevious research on high-growth firms is concentrated on the owners’ education. This article broadens to the high education of all employees and accounts for the employees’ occupation and capitalization of knowledge with intangible capital.

Demystifying the link between knowledge management capability and innovation ambidexterity: organizational structure as a moderator

“…Managers must provide a portfolio of training, policies for talent-hunt, innovative climate, and proactive leadership behaviors to encourage employees to engage in processes that ultimately promote creativity and innovation at individual, team, and organizational levels. Managers may also take fewer actions, such as altering old-fashioned approaches regarding work processes and replacing them with innovative ideas, technology, methodologies, and cultures to enhance employee efficacy for innovation (Eklund, 2020;Fu et al, 2018). Third, to optimize innovation ambidexterity and catalyze its effectiveness, managers are suggested to determine organizational structure wisely.…”

“…Moreover, empirical studies provide accumulated evidence that KM capability positively influences firm performance through the development of sustained intellectual resources and competitive advantages (Ge, 2022; Mokhtarzadedeh et al ., 2022; Inkinen, 2016). In addition, KM capability enhances the dexterity of organizations and empowers them to respond proactively in highly competitive and dynamic markets through (re)designing up-to-date products and services (Eklund, 2020; Mardani et al. , 2018).…”

Construction of structural dimensions of organizational human capital competitive advantage

“…Most micro-studies focus on general cognitive ability because it is the strongest predictor of education background, success, job performance, promotion and salary (Bruns et al , 2008; Claver-Cortés, 2015; Au et al , 2008; Shane, 2000). Learning ability and absorptive capacity of employees are also important sources of sustainable competitive advantage, which can encourage companies to maintain a certain update trend, obtain public knowledge and develop in response to the needs of a dynamic environment (Eklund, 2020). In contrast, unrecognized KSAOs include personalities, values and interests (Mincer, 1970).…”

Regional early-stage entrepreneurship in the European Union

“…In doing so, according to Fritsch (2013), only high-quality start-ups generate value, as opposed to those that deliver already available products using the same technology as existing companies. Research conducted in Denmark (Eklund, 2020) shows that higher growth is associated with younger companies, human capital measured by the number of highly educated, especially organisational capital (including both management and marketing investments), and ICT capital assets. New high-potential firms, that is, those using new technology, are more prevalent in "R&D rich" countries, Reynolds et al (2002).…”