The British government has been encouraged to put more effort into supporting “scale-ups” companies, rather than simply focusing on smaller startups.
A report published by investor and entrepreneur Sherry Coutu CBE focuses on scale-ups, which it defines as companies with more than 10 staff with average annualised growth in employees or turnover of more than 20% over three years.
The report claims that boosting this sector by just 1% over the next three years could create 238,000 new jobs and add £38bn of value to the British economy.
“The responsibility to become ‘a scale-up nation’ – to create an environment (ecosystem) where a greater number of companies reach global scale – rests with all of us who have an interest in supporting economic growth,” wrote Coutu in the report.
“Getting our ecosystem to produce a greater number of scale-ups is more ambitious and challenging than producing a greater number of start-ups or celebrating entrepreneurs.”
Startups have been a major focus for the British government in recent years, including its Tech City initiative to create a startup up in east London.
Coutu’s report, which was commissioned by industry and government body the Information Economy Council, outlines a six-point plan to shift more focus towards scale-ups, to correct what she sees as the UK lagging behind the US and other countries in that area.
The points include gathering better data to identify scale-up companies that need support and promotion; reducing skills gaps that restrict their growth through recruitment; and better training and support for managers within these companies.
Coutu would also like to see more work removing barriers to scale-ups operating at home and overseas; a boost to the investment ecosystem within the UK to ensure these firms are not forced to look to the US or Asia for financing; and progress on “pain points” including planning laws and broadband internet headaches.
The report calls for a minister to be “made responsible for reversing the scale-up gap by 2025”, including appointing a task force to report to Prime Minister David Cameron on progress every November for the next five years.
“Competitive advantage doesn’t go to the nations that focus on creating companies, it goes to nations that focus on scaling companies,” said Coutu, as the report was published.