Presentation by Wessel Vermeulen, Economist, OECD Trento Centre for Economic Development at the 19th OECD Spatial Productivity Lab meeting held on 14 December 2022 in Trento, Italy. More info https://oe.cd/spl

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SCALING UP IN
TRENTINO-ALTO ADIGE/SÜDTIROL
Antonio Accetturo (Bank of Italy), Carlo Menon (OECD), Wessel
Vermeulen (OECD)

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Scaling up in
Trentino-Alto Adige/Südtirol
2
Scalers are non-micro SMEs that
grow on average at 10% per year
or more over 3 years in
employment or turnover.
E-scaler:
scalers in
Employment
T-scaler:
scalers in
Turnover
Scalers: E+T Collaboration
Banca d’Italia, Trento Branch (Antonio Accetturo)
OECD Trento Centre (Carlo/Wessel)
Data
BdI, Company Accounts Data System. [details]
Methodology
OECD (2021), Understanding firm growth: Helping SMEs
scale up.
1 of every 10
SMEs is an employment scaler
They create more than
1 of every 3
new jobs in a region

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Scalers create most new jobs
and account for most additional sales
3
E-scalers create 47% in Italy to 69% in Finland*
of all jobs added by growing or new non-micro SMEs
*2015-2017 period
T-scalers generate 51% in Spain to 71% in
Finland and Portugal* of additional sales
*2015-2017 period

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Trentino and North-East Italy are slightly
behind the rest of Italy
Figure 2. Scalers create 7 to 10 over every 100 jobs across Italian regions
Job creation over total employment, 2010-18.
Note: North-East Italy includes firms from the regions Friuli-Venezia Giulia, Veneto and Emilia-Romagna. Centre and North Italy include Aosta Valley, Piedmont, Lombardy, Liguria, Toscana,
Marche, Umbria, Lazio, Abruzzo. Unweighted yearly average.
Source: OECD calculations
Difference in job creation of
High growth scalers

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Regional composition of Scalers can vary
by sectors, and age and size classes
Figure 6. Most scalers operate in less knowledge-intensive services
Share of scalers across sectors, 2010-18.
Note: North-East Italy includes firms from the regions Friuli-Venezia Giulia, Veneto and Emilia-Romagna. Centre and North Italy include Aosta Valley, Piedmont,
Lombardy, Liguria, Toscany, Marche, Umbria, Lazio, Abruzzo. See https://www.oecd.org/sti/ind/2stan-indlist.pdf for the definitions of industry groups. HGE for
employment scalers and HGT for turnover scalers.
Source: OECD calculations.
Scalers in Trentino and Alto
Adige/Südtirol are more often
active in “Less knowledge
intensive services”
Trentino Scalers are also in
active in “Education, social and
health”

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What firm characteristic can explain the
lower growth of Trentino scalers?
What challenges are
Trentino SMEs facing
to scale up?
Figure 8. Firm size, sector or age do not fully explain the lower prevalence of scalers and their growth in Trentino
Dependent variable: indicator variable for a scaler. Point estimates and 95% confidence intervals.
Note: Each panel represents two regression estimations using non-micro SMEs, and scalers are identified based on employment growth. The base regression includes only year effects, while the
expanded model controls for firm size class, sector and age class. See Box 4 for further details on the estimation models. The likelihood model is estimated using 951 951 firm-year observations,
2010-2018. The growth regression is estimated using 109 301 firm-year observations, 2010-2018. Standard errors are clustered by firm. The baseline category is Centre and North Italy. North-
East Italy includes firms from the regions Friuli-Venezia Giulia, Veneto and Emilia-Romagna. Centre and North Italy include Aosta Valley, Piedmont, Lombardy, Liguria, Tuscany, Marche, Umbria,
Lazio, Abruzzo.

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Scalers move more often across regions
than other firms.
Regions with high rate of
mobility of Scalers, also have
higher mobility of other firms
Figure 10. Firms that scale are more mobile than other firms, especially in Trentino.
Mobile firms as percentage of all firms at destination, by scale and other firms, 2010-18.
Note: North-East Italy includes firms from the regions Friuli-Venezia Giulia, Veneto and Emilia-Romagna. Centre and North Italy include Aosta Valley, Piedmont, Lombardy,
Liguria, Tuscany, Marche, Umbria, Lazio, Abruzzo. The line indicates the diagonal, x=y. Outliers are suppressed.
Source: OECD calculations.

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Trentino-Alto Adige/Südtirol:
A net attracter of scalers
Figure 11. Most mobile firms that scale move in the years immediately after scaling
Firms that move region and scale by growth phase, as a percentage of all scalers, 2010-18.
Note: North-East Italy includes firms from the regions Friuli-Venezia Giulia, Veneto and Emilia-Romagna. Centre and North Italy include Aosta Valley, Piedmont, Lombardy, Liguria,
Tuscany, Marche, Umbria, Lazio, Abruzzo. The period pre scaling includes the three years prior to (first) the scale up period, and post scaling the three years after the (first) scale up
period. A firm’s origin region is the region in the first year that the firm is observed in the data. For arrivals the percentage are relative to destination scalers, for leavers the percentage
are relative to origin scalers.
Trentino-Alto Adige/Südtirol is
a net attracter of scalers

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Scalers come from economically large
regions and direct neighbours.
Figure 13. Most scalers moving to Trentino-Alto Adige/Südtirol come from the largest regions
Scalers moving into regions (Vertical axis) from regions (legend), % of destination scalers, 2010-18.
Note: Each dot represents a region pair. The y-axis indicates the destination, the legend gives origin of a firm. The percentages are calculated as the number of high growth firm that
move from origin to destination over the total number of high growth firms at destination.

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Conclusion and policy options
• Scalers are an important contributor to job creation across countries
likewise for Trentino and Alto Adige/Südtirol
• Scalers in Trentino-Alto Adige/Südtirol contribute less to employment in comparison with the Centre and
North of Italy
• Sectoral compensation explain part of the difference, but not all of it
• Scale up constraints: What challenges do entrepreneurs face?
• Scale up policies for SMES can be a part of the economic policy toolbox
• Scalers are mobile
but further research required to understand employment impact and multi-region expansion
• With the right policy mix, sustainable firm growth is possible in all regions