UK leads the way in wealth creation, according to DTI report
The value added (wealth created) by the UK's top 800 companies last year increased by four per cent from the previous year, compared with a rise of just one per cent in the same period for Europe's top 600 businesses, according to a newly published report. The UK Department of Trade and Industry's (DTI) '2004 value added scoreboard' also reveals that the UK has more companies (165) in the European 600 than second-placed Germany (89) or France (83). However, France and Germany have more of the largest companies in terms of value added than the rest of Europe, while the UK has many more mid-sized enterprises on the scoreboard. 'To achieve prosperity for all, business and government need to work together to create more wealth, create it more efficiently and re-invest enough of it in the right places to ensure [...] continuing high growth,' said the UK Secretary of State for Trade and Industry, Patricia Hewitt. Value added is defined as the difference between sales and the cost of bought-in materials, components and services. However, as the data needed to calculate value added in this way is rarely made available in annual reports, an alternative approach was used to compile the scoreboard, adding operating profit to employee costs and the depreciation of intangible assets, which gives the same result. In terms of the overall wealth created by the companies of each country in the European 600, the UK again tops the table with a total of 475 billion euro. German businesses in the top 600 generated a net 444 billion euro, while French companies contributed 371 billion euro. There is a steep drop off to the next country in the list, the Netherlands, with 131 billion euro, while completing the top ten are Switzerland, Italy, Spain, Sweden, Belgium, and Finland. Over 90 per cent of the total value added in the European 600 is accounted for by firms from these top ten countries. Alone, the UK, Germany and France account for two-thirds of European 600 value added, the scoreboard reveals. Of the top five companies in the European 600 list, four are based in Germany: DaimlerChrysler, Siemens, Deutsche Telekom, and Volkswagen. UK-based energy company Shell completes the top five. There are three new entrants into the European top 12 by value added - Vodafone, Electricité de France and Nestlé. 'The keys to company success, as identified from interviews with the CEOs of successful companies, lie in good strategic choices, operational excellence and wise investment in the future,' said Ms Hewitt. 'The scoreboard highlights the importance of investment in R&D [research and development], skills, brands and market development,' she added.