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France: The rate of business creation

DATAR / INSEE

  • Definition

The rate of business creation is number of start-ups over a year, reported the number of firms operating in a st January of that year. The survival rate 5 years of births in 2000 represents the proportion of firms created in 2000 that were still in business five years later.

  • Relevance

To ensure the sustainability of regional economic development, it is necessary to ensure to ensure a balanced relationship between the characteristics of those territories and the need for competitiveness and opening. Reply to this challenge requires a good ability to ensure the renewal of local businesses and support business development newly created. Established at the scale of metropolitan employment areas or departments overseas, the indicators are intended to locate opportunities for establishing new companies and their sustainability by territories. Thus, they help assess the effectiveness of measures to support the creation and consolidation of local businesses involving local authorities.

  • limits and precautions

indicators do not include agriculture, nor, as regards the survival rate at five years, financial services. Reflecting primarily the creations of local businesses in the areas of trade and services, they are likely to have variations from year to year, reflecting changes in the general economy, and should be read together. Indeed, the emergence of new enterprises is often accompanied by the release of existing companies or a very short life span of new firms (Mazars et al., 2004). Thus, high birth rates or survival of recently created does not necessarily mean a consolidation of the local business or net job creation.

  • result relating to the issue of sustainable development

In each territory, it is desirable to maintain and develop a network of local business performance. In the areas most attractive to people, the rate of business creation is significantly more higher than average. The difference is largely explained by the dynamic service sector. This sector is much more volatile and life companies is on average lower, and the rotation of labor higher, generating a risk of insecure assets.

Business start-ups relate primarily to the residential sector of the economy

In most areas of employment, services and businesses now represent three quarters of creations Business. The rates of entrepreneurship are generally higher in the construction sector and weaker but very different depending on the territories in the industry. This finding means that if such new ventures relate primarily to the residential sector of the economy, whose development is largely induced by population growth and the level of local revenues, territories are also distinguished between them in terms capacity to implement new business where the market is not necessarily local.

cards below are for example state rate of business creation in 2008 higher in industry than in services employment in certain areas of Nord-Pas-de-Calais and Limousin.

rate of business creation in industry and services in 2008


factors creations of business

The creation of new businesses follow in fact many factors that are related to various characteristics territorial settlement. Among these include for example the structural health of the local economy, indicating that rates of new ventures may be higher if the tissue is concentrated around a few large companies that it is much more atomized (Moati et al., 2000). Agglomeration effects may also play a role, assuming that the territories densely offer better support economic competitiveness and are therefore preferred in the location decisions of entrepreneurs. But most of the creations of concern very small firms to local dimension. These creations can be stimulated by incentives for the development of local entrepreneurship, they simultaneously contribute to the development of resources of the territories of implantation (quality of life, tourist amenities, etc.).. For their part, the creation of larger companies reflect more, depending Moati, the economic attractiveness of the territories of implantation as brakes or incentives to individual initiative.

  • territorial disparities

Contrasts revealed that the card rates of start-ups in 2008 was already observed in previous years. For the reasons stated, this map shows that high levels affect various types of land, since it is both parts of southern France in rapid population growth or tourist areas stated that robust economic as Ile de France or around larger cities or border areas or underserved in receiving communications infrastructure locations outside companies. For their part, the rates of creations lowest concern of the most rural and least dynamic in terms of population.

However, it is possible that the map of survival at 5 years, which does business as currently established in 2000, moving more sharply over time. It nevertheless reveals survival rates relatively low in areas where rates are relatively high creations, such as for the employment area of Saint-Denis (Ile de France), but it also reports contrasts between areas with low rates of business creation. Thus, survival rates could be high in some of them, as in Brittany, Maine-et-Loire in the Indre, but were particularly weak in other areas such as employment areas of the Meuse or North St. -Flour. According Mazars (2004), most of the factors playing an important role in business creation also play a role in the growth of new firms. One may therefore conclude that the territorial contexts less buoyant in terms of opportunity creation and development of start-ups make them better equipped to succeed in their first years of their existence, candidates for entrepreneurship taking better account of the risks of this adventure.

  • Additional data

These indicators summarize the effects of many factors. Some may be covered by other indicators, such as from managers of metropolitan functions, which can refine the analysis of start-ups by placing it against various forms of territorial development. It is also to relate the dynamics of start-ups with changes in sectoral employment.


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