Sherry Coutu CBE: ‘Scale-up’ businesses could add £38bn to economy
Independent report calls for government to close “scale-up gap” by providing more support and encouragement to fast-growth companies
Fast-growth ‘scale-up’ businesses could add £38bn to the UK economy over the next three years if properly encouraged; an independent report by Sherry Coutu has revealed.
Titled The Scale Up Report on UK Economic Growth, the study argued that the government should focus its efforts on supporting ambitious businesses to help them scale to their full potential; defining ‘scale-ups’ as businesses with over employees and year-on-year growth in excess of 20% over three years.
Coutu revealed that boosting this sector by just 1% could create 238,000 new jobs and add £38bn to the UK economy over the next three years. The result of closing this ‘scale-up gap’ would, in the long term, generate a potential £225bn and 150,000 net jobs.
Despite government initiatives to help start-ups and burgeoning small businesses such as SEIS and Tech City, the report highlights the need for more to be done to help businesses in their next stage of growth.
It found that despite widespread “ambition and ability” in the leaders of fast-growth companies, the UK still lagged behind the US and other major economies in its scale-up population.
The study made six specific recommendations for governments, universities, corporates and the media to help support scale-ups. These were:
1. Targeting, supporting, promoting and reporting on scale-up gap closure: The report argued for a greater focus on scale-ups and specific targets for growth monitored by the government.
2. Closing the skills gap: The report found the “number one problem” that scale-ups faced was a lack of access to quality talent, which needed to be addressed if they were to grow.
3. Developing scale-up leadership: A lack of capacity and experience in the senior leadership team was cited as the second most important barrier to scale-up growth; the report urged greater training and support for senior people in these organisations.
4. Increasing customer sales at home and abroad: The report urged the removal of “barriers” to trade, both domestically and internationally.
5. Financing scale-ups: The report found many scale-ups were approaching US and Asian investors for finance due to its easier availability in those markets; whilst access to foreign finance should provide growth in the short-term, the report argued it will “dampen” the UK economy over a 20 year timeframe.
6. Accessing infrastructure: Whilst the report said improving access to physical infrastructure (premises) was important in the short-term, in the long term it was “not of that great economic importance”.
Outlining the findings of the report, Coutu commented said:
“This report investigates the potential boost to the UK economy if we could enable as many small companies to grow large by the implementation of support mechanisms as has been achieved in 20 other countries.
“Like many other investors, I make sure that I have a portfolio of short-, medium- and long-term investments. Similarly, as a country we need to consider the impact of the UK’s portfolio of growth-enhancing policies and initiatives — both public and private.”