The UK’s scale-up business population is growing, but more support is needed to help ambitious companies reach their potential.
So says the 2018 Scaleup Review, published by the Scaleup Institute, an organisation aiming to help the UK become an environment where growing firms can thrive.
A ‘scaleup’ is an enterprise with average annual growth in employees or turnover greater than 20 per cent per annum over a three year period, and with more than 10 employees at the beginning of the period.
In the report, Irene Graham, CEO of the Scaleup Institute, says: “Scaleups are essential to a vibrant UK economy, but we need to continue to step up our game if we are to surpass our international competitors and climb to the top of the OECD rankings.
“While we have reason to be optimistic, we cannot be complacent when barriers to scale still exist in many local areas and when scaling businesses are signalling concern that the UK may become a harder place to grow and see a lack of resources targeting their needs. We must act now to remedy this.
“Challenges to UK scaleups predate the current ‘Brexit’ focus; Brexit simply makes the prize of reducing the scaleup gap, even more significant. These challenges are within our power to fix.”
The report found that the total number of scaleups in the UK increased from 31,440 in 2015 to 35,210 in 2016, growth of 12 per cent. Data from the Office of National Statistics (ONS) also shows that that scaleups are much more productive across almost every sector of the economy – averaging £275,000 turnover per employee.
Scaleup leaders interviewed for the report were twice as likely to be innovative and international than any other business segment, with the majority of scaleups are globally focused and hungry to seek out international markets.
The Government and private sector must help open doors for scaleups with better buyer connections and bespoke trade missions, the Scaleup Institute says. This is especially important when more than half of all scaleups surveyed are worried that Brexit will have a negative impact on their businesses – with one in eight believing it will have a very negative impact.
Securing talent remains a key concern for scaleup CEOs, the report says, but rising up in importance – to be almost on a par – is access to markets, including overseas customers, and opportunities for procurement and collaboration with Government and large corporates.
Challenges in leadership development, finance and infrastructure also remain significant and can dial up depending on locality. Scaleups are keen to see better access to R&D innovation funding and growth finance options delivered locally, along with access to the infrastructure that supports their innovation drive. Finance and infrastructure remain vital components to scaleup success.
This year, four in ten scaleup leaders still perceive no relevant support available for a company like theirs and two-thirds want much better coordination of national services in their local areas through some form of relationship management.
Scaleup business leaders most value locally- rooted resources and services to foster their growth. They are looking for local solutions that are easy to navigate and tailored to their specific needs. These include peer- to-peer networks where they can discuss solutions to common challenges with counterparts, stronger access to schools, universities and collaboration partners in the public and private sectors. While scaleup leaders recognise that there are national Government initiatives, they want these delivered locally in a manner much easier to navigate.
* The Cambridge Norwich Tech Corridor is on a mission to support scaleup businesses in the region. To find out how your company can be part of one of Europe’s most exciting growth stories, get in touch.
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