Innovation driving growth
3i's latest European Enterprise Barometer reveals that companies participating are using innovation to drive growth. Some 63% of the businesses surveyed said that up to 25% of their sales come from new products.
The quarterly economic survey also showed that new products are delivering pricing power with 56 % of surveyed companies being able to charge a premium of 10 - 20% on their new products. These companies appear to be adept at anticipating or creating market demand. The majority (66%) said that their product innovation is driven from within the company, as opposed to customers (31%) or suppliers (3%). The range of new innovation in 3i-backed companies varied widely - from special soaps for chefs to high tech inventions like the development of hydraulic titanium blocks for the A380 Airbus.
Philip Yea, 3i CEO commented: "It is encouraging to see this high level of innovation in 3i portfolio companies - exactly what we expect from private equity backed businesses, with strong management teams and good growth potential."
The quarterly Index, measuring private companies'' confidence in business, political and economic climates for Europe, showed that European companies are becoming slightly more optimistic, as the Index score went up to +11 increasing 7 points from the previous quarter.
The Nordic countries (+62) and Germany (+61) remain the most positive regions, both showing an increase from Q3. Italy (-45) and the UK (-29) have the lowest Index scores and although their Index figures stay negative they have improved from previous research, whereas Spain (+12) and France (+10) are the only countries to exhibit a downturn while still staying on the positive side.
Notes to editors
3i Enterprise Barometer www.3i.com
The 3i UK Enterprise Barometer is compiled every quarter from the responses of a sample of companies in the UK in which 3i has an investment. The initial base of +100 was established in January 1988. The Index reached its highest level of +142 in the first quarter of 1994 and its lowest level of -170 in the first quarter of 1991.
The 3i European Barometer was started in June 1998 and is compiled every quarter from the responses of a sample of companies in the UK, France, Germany, Italy, Spain and the Nordic region in which 3i has an investment. This survey was carried out in October 2005. The sample size was 239. The Index uses the same base as the UK Barometer and it is weighted by size of country (as measured by GDP).
The 3i Barometer has been a good lead indicator for GDP growth across Europe since it began in the UK in 1988 and then spread to the rest of Europe in 1998 (see chart 4, page 3).
About 3i Group plc
3i is a world leader in private equity and venture capital. We focus on buyouts, growth capital and venture capital and invest across Europe, in the United States and in Asia. Our competitive advantage comes from our international network and the strength and breadth of our relationships in business. These underpin the value that we deliver to our portfolio and to our shareholders. www.3i.com