The 2018 Scaleup Institute Review paints a largely positive picture of the UK scale up ecosystem, but there is still work to be done.
In particular, the report highlights regional disparities in the number of emerging scale ups, and the barriers to growth that must be addressed at a local level if the UK wants to support its high-growth businesses.
The good news is that Scale-ups are feeling confident; 80% of those surveyed expect to see further growth the following year, and 4 in 5 scale-ups have introduced a new product or service, or improved an existing one, in the last 3 years, twice the rate of large firms.
Small Business Minister and Scale Up Champion for Government, Kelly Tolhurst, said:
“High growth businesses are a critical part of our economy and make a significant contribution to economic growth and national productivity. The number of scale-ups is increasing, driving job creation and growth right across the country. The UK is home to circa 35,000 scale-ups, making us one of the leading OECD countries for our share of high growth businesses.”
Scale-ups in the West of England
There are currently 715 scale-ups in the West of England employing 76,332 people, the total turnover for these businesses is £7.1bn. The region has a high average growth rate for scale-ups (per 100k population) compared to the rest of the UK.
The Engine Shed’s Scale Up Enabler, a post part funded by Business West, was identified in the review as a key player in the region and described as ‘a role model to emulate’ when it comes to galvanising local leaders. Business West’s Scale Up Hub was also acknowledged in the report as a source of locally delivered support for scale-ups and aspiring scale-ups.
The key barriers to scaling up in the West of England were identified as:
- Access to the talent you can hire who can do the jobs you have available.
- Access to markets and customers internationally.
- Access to infrastructure/premises and broadband.
Key issues identified as challenges facing scale-ups throughout the UK in 2018 were skills and access to talent, access to local and international markets, and developing leadership capacity. Other issues such as infrastructure and finance were also cited as potential barriers to growth in some areas.
Scale-up leaders continue to identify the ability to build leadership capacity to support the growth of their businesses is as highly important, and 93% of all scale-up leaders who have a mentor rate their support as highly valuable. For those who do not have a mentor, knowing how and where to find one was identified as the main obstacle.
The High Impact Scale-Up Coaching Grants programme has been developed to support businesses to overcome barriers to growth through intensive and strategic coaching, with a coach of the business owner’s choice. The programme will be exclusively available to high-growth businesses in the West of England who either already meet the scale-ups criteria or have the potential to become scale-up companies. Book a free one-to-one diagnostic session with a scale up business adviser to find out more.
Skills and access to talent
The UK skills gap and the impact this has on scale-up ambitions remains a major concern for fast-growing businesses: ‘for the fifth consecutive year [in the Scaleup Institute Survey], the challenge to find and develop the right talent and skills is viewed by scale-up leaders as the single most significant barrier to growth.’
Skills West is working with businesses in the West of England to try and plug this gap. This fully funded service aims to bring together training providers and companies to ensure education provision is relevant to business needs. Expert skills advisers can offer advice on skills issues and signpost you to support you may not know exists. Find out more.
Two thirds of scale-ups are trading internationally and more than a quarter of those not yet trading internationally have plans to do so. Scale-up leaders cited ‘lack of people experienced at winning overseas sales and the inability to find appropriate overseas partners’ as the key barriers to trading internationally.
The International Trade team at Business West help businesses find profitable customers in overseas markets. Support is available to ambitious businesses through strategic workshops, one-to-one advice, desk-based research and company visits. Find out more.
More than half of the scale-ups surveyed are worried that Brexit will negatively impact their business, with 1 in 8 believing that Brexit will have a very negative impact.
As one of the lead Chambers of Commerce in the UK we’re closely monitoring Brexit negotiations as they occur. Matt Griffith, Director of Policy at Business West, together with an experienced international and policy team, will be addressing some of the biggest Brexit issues most likely to affect you. Register for Matt’s updates and submit your Brexit questions.