SME Growth . Focusing support for scale-ups
Focusing support for scale-ups
Article by Oxford Innovation | 16.12.2016
Encouraging and supporting scale-ups has been an important policy focus for the few years. A richer picture is beginning to emerge of the barriers that firms face as they scale-up and the critical times when they need external support to succeed and grow.
The Enterprise Research Centre has just published the UK Local Growth Dashboard which presents fascinating metrics for start-ups and existing firms across each of the 39 LEP areas. The growth metrics include:
- Net job creation ratios for 2014-15
- 3-year survival rates of start-ups (2012-15)
- Proportion of 2012 start-ups that reach £1m turnover (2012-15)
- Proportion of £1-2m turnover businesses born before 2012 which grow to £3m turnover (2012-15)
- Proportion of Fast-Growing Businesses (2012-15)
- High-Growth Firm Incidence Rate (2012-15)
The point being that high growth firms don’t just ‘appear’ by magic but they begin life as start-ups and pass through different stages of growth – usually described by turnover – before appearing as a high growth firm as defined by the OECD (a business with 10 or more employees that has grown 20% per year over 3 consecutive years).
These maps are incredibly helpful to LEPs wanting to understand where to invest their limited resources to generate a healthy pipeline of growth businesses. For example firms in the Thames Valley Berkshire (TVB) LEP perform relatively poorly in the initial phase of growth from start-up to achieving £1m turnover but once they have broken the £1m barrier, firms perform strongly in growing from £1-3m and beyond. This suggests that investing in the provision of support for start-ups with exciting growth potential to help them through their crucial early stages is important in this region.
The maps and charts from the Local Growth Dashboard shed light on a complicated local picture. They make a strong case for focusing policy on creating a growth pipeline at local level and monitoring its development over time. It’s not about picking winners but rather about understanding which parts of the high growth ‘supply chain’ are in most need of attention.
Dr Jane Galsworthy is a Director of Development and an expert in the design of business support for high growth SMEs with needs around scale-up, accessing finance and commercialising innovation. For the last 20 years, she has worked at the interface between business, academia and policy building partnerships to create effective enterprise and innovation ecosystems.