Methodology for mapping emerging industries

The geographical localisation analysis conducted for the classification methodology was extended with a more detailed economic and geographic analysis to identify emerging industry hotspots across Europe that could be targeted for further analysis. A database of companies was created for the seven key emerging industries identified. The database included over 1.6 million firms and data on company turnover, employment, year of incorporation and financial deals.

The companies included in the database were segmented to identify emerging industry companies with particular characteristics. Eight different segments were defined relative to the structural characteristics of emerging industries in different regional economies. This segmentation allowed the identification and mapping of the spatial distributions of companies in different stages of the industry life cycle based on their shared characteristics.

Economic and geographic analysis methodology

The segmentation focused on startups and young SMEs, high growth SMEs, SMEs raising funds and mergers & acquisitions. For start-ups and young SMEs all SMEs aged between 0 and 5 years were selected. Segments were created to distinguish between micro, small and medium-sized companies. For high growth SMEs high growth start-ups were identified, i.e. firms which reached an annual turnover of at least EUR 1m and 10 employees in less than 3 years and so-called gazelles, i.e. firms which surpassed EUR 2m annual turnover and 10 employees within 3 to 5 years of their incorporation.

Industry life cycle

Segmentation

The companies included in the database were geocoded and assigned to their respective NUTS 2 regions. Aggregate statistics were calculated on the numbers of companies by segment and emerging industry in each NUTS 2 region. Regional concentrations indices were then computed to assess whether a given region has a lower or higher concentration of companies for the respective segment compared to the average concentrations of companies in the segment for all regions in each country. The regional statistics can be explored using the country maps in the mapping emerging industries section of the website.

Specialisations at the national levels were also assessed using location quotients. The results are displayed on the European maps in the emerging industries section of the website. The concentration indices on used for these maps compare, for each selected segment and emerging industry, the proportion of firms in the selected emerging industry in each country over the total number of firms for all emerging industries in the same country, to the proportion of firms in the selected emerging industry across Europe over the total number of firms in all emerging industries in Europe.

Data sources

Data sources for the company data:

  • Bureau van Dijk (Amadeus & Zephyr databases)
  • European Venture Capital Network
  • Europe Unlimited

Data source for the administrative boundaries:

  • EUROSTAT (GISCO)