engleski

Firm dynamics in European ICT sector

The economy is developing through its competitive and selection processes. Through innovation, companies gain competitive advantages and generate extra profits, which is also an incentive for new companies to enter the market in a particular sector. As a result of the entry there is decline in average profits, and companies are forced to further innovation. Those that do not succeed, leave the market and are replaced by new, innovative companies that are introducing new ideas, products and technologies. Those that survive must adapt to the new market conditions. Their survival plays important role in preserving jobs and economic growth, key issues both in economic research and policy making. The aim of this paper is to analyze business dynamics trends in European ICT sector, as one of the most dynamic sectors of the EU economy that creates 4.3% of EU GDP and makes 2.5% of EU total employment. Business dynamics refers to entry rates, exit rates, turnover rates and firms’ rates of survival. Eurostat data is used to track different business dynamics indicators of firms in ICT sector according to NACE Rev. 2 classification over the six-year available period of time.

firm dynamics ; ICT sector ; European union

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