The employment of 'start-ups' grows at a faster rate than their income - Start Up Gazzete
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The employment of ‘start-ups’ grows at a faster rate than their income


The technology sector emerges stronger from the pandemic crisis and start-ups are solidly resisting the pandemic crisis. A new report prepared by CaixaBank and IESE confirms that 63% of start-ups have increased their workforce in the 2019-2020 period and 90% expect to increase it in 2021. On the contrary, only 8% of start-ups have increased their workforce in the period 2019-2020. ups has resorted to temporary or permanent staff cuts.

The study analyzes 955 companies between Spain and Portugal. They account for about 10% of the total (Spain has about 11,000 and Portugal about 2,000, according to the Dealroom aggregator portal, which is used as a reference in the sector. In Catalonia there are about 1,700, according to data from the Generalitat). The report indicates that, in absolute figures, the thousand start-ups analyzed directly employ 5,983 people, with an average of six employees. Thus, if the respondents represent 10% of the sector, the total of start-ups in the Peninsula could employ about 60,000 workers.


The gender gap in the sector is still clear: only 12% of founders are women



However, the upward evolution experienced at the labor level is not reflected in the turnover. Only two in ten (19%) have improved their sales in 2020 while the majority say that they have kept their income stable (44%) or that they have suffered a decline. The falls are due to the companies most affected by the crisis.

According to Julia Prats, a professor at IESE, employment has grown faster than income because companies have made an effort to overcome the crisis by attracting talent. “They have hired staff to adapt to new needs and explore new markets.”

In fact, this effort in attracting talent is reflected in the economic results. “Only one in four companies has been profitable, while in 2019 the percentage was higher: one in three claimed to have profits.”

Another figure to highlight is related to fundraising. 75% have not been affected by the capital raising process and, in fact, 21% have closed rounds in 2020. On the contrary the remaining 26% have seen financing operations canceled.

The study also confirms the enormous gender gap in the sector, which according to Prats is not exclusive to the Peninsula but to a European level (only 15% of entrepreneurs on the continent are women). “Compared to last year, the percentage of startups formed by women remains at 12%.” On the contrary, emerging companies formed only by men increased, going from 50.4% to 53% in one year.

Author avatar
Joshua Smith

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