Economies of scale
Commentary by Irene Graham, CEO, ScaleUp Institute
It’s important to celebrate the fastest-growing businesses in our nation. We need to know who they are, so we can all lean in – locally and nationally – to make sure these businesses get the access to talent, markets, leadership experience and growth capital they need. That’s why the 2017 report of 1000 Companies to Inspire Britain is so essential.
These ‘scale-up’ businesses matter because they are across sectors, in every area of the country and are generators of exports, jobs and growth in our local communities. They are highly productive, innovative and diverse. They are also a prime source of today’s jobs and tomorrow’s – as research by Octopus Investments has shown, high-growth firms create three times as many jobs each week as the FTSE 100.
The good news is that the number of UK scale-ups is increasing, and scaling businesses have high-growth ambitions: in the ScaleUp Institute’s recent survey, more than four out of five scale-up leaders expected their growth to continue despite the uncertainties created by Brexit, while two-thirds are already exporting, with aspirations to do more.
That said, there is still much to be done if we are to realise our ambition to be the greatest scale-up nation in the world, with the hundreds of thousands of jobs, billions in economic value and prosperity that would bring. We need to mobilise data to improve the talent pipeline, increase scale-up leadership capacity, and assist customer acquisition.
“The good news is the number of UK scale-ups is increasing, and scaling businesses have high-growth ambitions”
‘Growing pains’ in companies that are scaling are inevitable, and we all have a role to play in breaking down the barriers that exist to allow their growth to flourish in every city and area of the country.
Once local communities can identify scale-ups, they can come together to remove pain points and improve the environment in which scale-up leaders have chosen to locate their businesses.
That is why, in 2016, the ScaleUp Institute invested in an intensive education programme, in partnership with Goldman Sachs Foundation’s 10,000 Small Businesses programme and Innovate UK, to help local ecosystems focus on their scaling businesses, develop plans to remove specific barriers and make relevant improvements to the business environment. And targeted export programmes are emerging too, such as the London Mayor’s International Business Programme Go to Grow, while the work of Entrepreneurial Scotland is increasingly focused on scale-ups.
At a national level, the Government’s Building our Industrial Strategy Green Paper demonstrates that it has fully recognised the economic importance of scale-ups. Most notably, among key ScaleUp Institute policy recommendations being taken forward, there is the commitment to review the use of HMRC data in identifying scaling businesses; the appointment of the Rt Hon Margot James, Minister for Small Business, as a cross-Government ‘ScaleUp Champion’; and the focus on further building of local strengths.
Our scale-up businesses are of even greater importance as we enter the Brexit era. We are fortunate to have very many capable, ambitious business leaders innovating to provide customers with better services than before. And we are positioned to create unrivalled national competitive advantage by increasing the proportion of companies scaling up.
We all have a critical role to play. Together, let’s make Britain the best place in the world for a leader to choose to scale their business.