Many times the company label appears indicating large production units with thousands of employees on their payroll, dominant in their market and who call the shots when negotiating with unions, authorities, suppliers and customers.
In the Argentine case and in most countries with medium and high development, this figure is a caricature far from reality and only applicable for some cases in certain sectors. In our country and according to AFIP data, there were 784,000 companies this year, almost 1% more than in 2021 but still 3.7% less (30,000 in total) than in 2018, two years before the pandemic. However, only 0.5% of the total (4,004) employ more than 200 people and another 21,119 companies (2.7%) employ between 40 and 199 dependents. This means that almost 97% of the productive units have less than 40 workers.
The evolution
The total number of companies becomes relevant from the point of view of social dynamics, considering that the study of the number, location and structure of companies can offer a vision of the economic health and growth trends of a country. “In addition, they can guide policy makers and business leaders in making informed decisions to boost economic growth,” says the specialist. ariel garcia who carried out a detailed study with official information and Keys Competitive Information for said consultant.
García points out that quantitatively knowing the companies, their location and their structure can help to understand the economic and demographic patterns in a country. This knowledge not only helps companies forge effective marketing strategies, but should also facilitate government policy making accurate.
“Business density, that is, the number of companies per person, can show the economic dynamism of a region. A high number of companies can lead to more employment opportunities, helping to keep unemployment rates lows and the variety of companies could reflect the diversity of industrieswith diversified economies proving more resistant to economic fluctuations”, he concludes.
Considering the total Argentine population, according to the last National Census in 46.3 million inhabitants, there were 16.9 companies for every 1,000 inhabitants, but with a very heterogeneous distribution. In the Pampean and Central region they are well above the average. On the other hand, in the NEA and NOA region a lower coefficient can be observed, while in Cuyo and Patagonia they have an almost exact balance in the relationship.
Also, in the measurement at the beginning of the year, there is a significant number of companies without employees (270,600), which represent 34.5% of the total but could conceal shell companies or a formalized self-employment. Before the pandemic, for example, that percentage was lower: 33.4% and upon leaving, it reached 37%.
Comparison
The number of companies over population gives a measure of the energy of the private sector in the economy which, although it is not the only one, is important because if it is low, it limits the amount of available employment that the private sector can create in the long term. The investigator robert vassoloof the IAE Business School, points out that, in Argentina, there was a recovery of companies from 2002 to 2011, when the value stagnated and from 2014 began to decrease irretrievably. “The institutional legal model was not enough to bring the country to regional standards in companies per inhabitant,” he emphasizes.
The data obtained from the SArgentine Integrated Pension System (SIPA) are somewhat more positive, where 519,425 registered employers are reported in January 2021. “Even taking said value and the population at that time, yields 12 companies per 1,000 inhabitants, one of the lowest values in Latin America and by world standards”, he adds. According to the SME Observatory Foundation, before the pandemic, Brazil had 25 companies for every 1,000 inhabitants, Mexico 34, Uruguay 48, Chile 58, South Korea 66 and Australia 88.
The differences may be due to cultural and institutional factors: for example, in Argentina the rate of entrepreneurship is high and this means that there is no limitation to create companies. “If there are no more companies, it is because we suffocate them with regulations and taxes,” says Vassolo.
heterogeneous
However, in addition to the regional differences mentioned, there are other sectoral ones. What is currently being observed is that the tech giants have very low levels of employees in connection with your billing. Natural resource industries also have a low ratio because they have few employees given their sales revenue.
At the other extreme, service industries have many employees. “In Argentina there is an error that drags on from the 40s that to increase employment we have to industrialize and that is no longer strictly so because modern manufacturing has fewer and fewer employees”, he says.
García points out that, in addition, geographic location plays a crucial role in the density and type of companies present in an area. Urban areas tend to have a higher density of businesses due to the larger population and better infrastructure. Conversely, rural areas may have fewer businesses, often related to agriculture or natural resources, while industrialized regions may be home to more related to specific industries, while coastal areas may be dominated by trade, fishing, tourism, and logistics businesses.
A circuit that can become a magnet giving rise to a virtuous circle: “Areas with business-friendly policies, as well as regions with centers of education and research, tend to attract a larger number of businesses,” synthesizes the Key consultant. The number, this time, does matter.
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