2. A ‘scale-up’ 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 THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE #scaleup

3. “We want nothing less than to make the UK the technology centre of Europe. This is the path we need to take to create new jobs, new growth and new prosperity in every corner of our country.” George Osborne, Chancellor of the Exchequer THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE #scaleup

4. We are doing very well on Start-ups…

5. Very Few Start-ups Survive and Grow UK businesses that started in 1998 – ten years later 221,731 83,165 8,649 5,934 All businesses that started with atleast one employee Businesses that survived in 2008 Survivors with ten or more employees in 2008 Survivors that achieved atleast one year of high growth THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE #scaleup 100% 37.5% 3.9% 2.7%

6. | THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE Research by the academic David Storey has found that the median annual sales of a six-year-old firm in the UK are less than £23,000 £ 23,000 #scaleup

7. | THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE Research by the academic David Storey found that Just one per cent have sales of more than £1 million six years after they star 1 % #scaleup

8. But we are doing less well on growing them….. https://www.gov.uk/government/statistics/business-population-estimates-2015

9. THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE The UK has a lower share of large businesses than the US. Large firms with more than 250 employees account for 0.5 per cent of firms in the UK but 0.7 per cent in the US. THERE IS A SCALE-UP GAP #scaleup

10. The 3 year gross impact of moving 1% of businesses to HGF mode (244% over 3 years) As a simple illustration of the potential impact of high- growth firms, RBS undertook an analysis to determine the economy wide impact of one per cent of all businesses with over 10 employees shifting from a stable growth state into high-growth mode. This would see the total population of HGFs in the UK increase from 10,200 (4.6 per cent of total business population with 10 or more employees) to 12,440 (5.6 per cent of total business population with 10 or more employees). At the end of year three this would result in 2,240 businesses making this shift and the creation of 238,000 jobs and almost £39 billion in additional turnover. 39 * 20 years = 780 billion before you take into account productivity effects £ 768 billion £ 780 billion + http://www.scaleupreport.com

11. | THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE SCALEUPS DO CONTRIBUTE TO PRODUCTIVITY BIS data show that in the UK average turnover per employee is: £170,000 for firms with 250 plus employees £164,000 for firms with 50 to 249 employees £134,000 for firms with between 10 and 49 employees39

12. THERE IS A SCALE-UP GAP  Many European economies, including UK are as effective as US in creating new businesses  Not enough of them grow – displacing older firms  This lack of ‘scale up’ means the economy as a whole loses on productivity and growth. Nesta (2011). A Look at Business Growth and Contraction in Europe THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE #scaleup http://www.scaleupreport.com

13. | THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE In the UK, HGSBs created the equivalent of approx. 4,500 new jobs every week, 3 times as many new jobs as the FTSE 100 JOB CREATION IS LINKED TO COMPANIES THAT ARE HIGH GROWTH (2015) #scaleup Source: Octopus investments – hgsb study released Oct 20 2015

14. | THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE SCALE-UPS HAVE HIGH QUALITY JOBS Of the employees surveyed in these high-growth companies who had joined the company from another employer, 80 per cent stated that they were ‘satisfied’ or ‘very satisfied’ with their current job compared to 46 per cent when asked about their previous job #scaleup http://www.scaleupreport.com

15. | THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE Scale-ups are not start-ups Scale-ups have different needs ROI in Scale-ups has big pay-offs for Economic Growth So we should focus some of our attention and policies on scale-ups THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE CONCLUSION #scaleup

16. Methodology 8,923 THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE #scaleup

17. | THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE SCALE-UPS ARE THROUGHOUT THE COUNTRY Scale-ups are found in each of the 39 LEP areas in England and 6,659 (75 per cent) of the total 8,923 scale-ups are located outside of London. On average a LEP will have approximately 228 scale-ups in their area. These in turn can be grouped into the Number of scale-ups companies that employ between 10 and 49 employees, 50 and 250 employees, >250 employees #scaleup

18. | THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE http://www.svc2uk.com/the-royal-society-science-50-index/ “The Science 50” Royal Society’s list Illustrates the extent to which science-based scale-ups are a nationwide phenomenon. 36 (72 per cent) of the top 50 fastest growing science- based companies are located outside of London. These 50 science-based companies increased their revenues by an average of 92 % between 2012 and 2013, achieving a combined annual turnover of more than £1.3 billion. Adding more than £600 million to national output last year. THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE SCALE-UPS ARE MORE THAN DIGITAL SCIENCE ONES GREW 92% LAST YEAR….. #scaleup http://www.scaleupreport.com

19. The Report identified 6 main gaps to focus on… THE SCALE-UP INITIATIVE Sherry Coutu CBE #scaleup 1.The Evidence Gap: public and private sector organisations identify, target and evaluate their support to scale-up companies. 2.The Skills Gap: improve the ecosystem so scale-ups can find employees with the skills they need 3.The Leadership Capacity gap: building their leadership capability 4.The Export Gap: accessing customers in other markets / home market 5.The Finance Gap: accessing the right combination of finance 6.The Infrastructure Gap: navigating infrastructure

20. | THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE KEY RECOMMENDATIONS Recommendation 1: RELEASE the names of scale-ups  Gov’t already holds the information so that local public and private stakeholders can identify, target and evaluate their support to scale-up companies, and evaluate their impact on UK economic growth. http://www.scaleupreport.com #scaleup

21. | THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE KEY RECOMMENDATIONS Recommendation 2 Publicly funded organisations seeking public funding should review and report on the extent to which the top 50 scale-ups in their areas are increasing their turnover and job growth from year to year with the objective of increasing the proportion of scale-ups with more than 250 employees by three per cent by 2025. http://www.scaleupreport.com #scaleup

22. | THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE KEY RECOMMENDATIONS Recommendation 3 50 % of public funding and promotion currently reserved for ‘entrepreneurship’ should be directed towards collaborative initiatives based on track-record http://www.scaleupreport.com #scaleup

23. | THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE KEY RECOMMENDATIONS Recommendation 4 A Minister should be made responsible for reversing the scale-up gap by 2025 a task-force appointed to deliver a scale-up report to the Prime Minister every November for the next five years. http://www.scaleupreport.com #scaleup

24. COMPLETED BY 442 CEOs OF COMPANIES RESPONDENTS WERE HIGH GROWTH CEOs (THAT WERE GROWING >20% PER ANNUM) 206

25. HOW FAST DID YOU GROW LAST YEAR?

26. 325 RESPONDENTS WERE CEOs OF COMPANIES EMPLOYING >10 EMPLOYEES 163 OF THESE WERE SCALE-UP CEOs (COMPANIES WITH >10 EMPLOYEES THAT ARE GROWING > 20% PA) 442 CEOs

27. SURVEY FINDINGS

28. “I would be able to grow my company faster if others could identify my company as a 'scale-up company” 88 % OF 163 SCALE-UPS POLLED 88% AGREE

29. “Are You in favour of the Government INTERNALLY sharing (with other government departments or agencies) the fact that your company is one the fastest growing companies in any sector?” 97 % OF 163 SCALE-UPS 97% WERE IN FAVOUR “It is good news for our employees, suppliers and customers to know that the company that they work with is the best and most successful in the market sector that they operate in.”

30. “Are you in favour of the Government EXTERNALLY sharing (with companies outside of Government) the fact that your company is one of the fastest growing companies in any sector?” 87 % OF 163 SCALE-UPS 87% WERE IN FAVOUR “It would be very useful if fellow scale-up organisations could identify one another as this would open up opportunities for collaboration and joint growth”

31. WHAT WE WILL DO Continue to work with government to look to release additional key HMRC data points, in an accessible form e.g through ODI. Good progress made in 2015 through Companies House Shine a spotlight on Scaling companies to enable better targeted support from LEPS, city councils, universities, schools, financiers, corporates etc

32. “I would be able to grow my company faster if universities and large corporates opened up their research and development facilities to me.” 69 % OF 163 SCALE-UPS AGREE 74 % OF 442 CEOs AGREE

33. “I would be able to grow my company faster if university graduates had the skills needed to meet my customer demand.” 82 % OF 163 SCALE-UPS AGREE 79 % OF 442 CEOs AGREE

34. WHAT WE WILL DO continue working with partners to Showcase scale-ups to universities and schools to enlighten students on where the opportunities of tomorrow are and the skills needed Have more individuals from scaling businesses part of education establishments and teaching pool Tailor specific R&D programmes and promote opportunities for scale-up companies

35. “I would be able to grow my company faster if the government were a customer.” 65% OF 163 SCALE-UPS AGREE OF 442 CEOs AGREE 65% 60% OF BUSINESSES WITH > 10 EMPLOYEES IF YOU INCLUDE MICROBUSINESS 64% “Our organisation has been a successful supplier to government for 20 years. Our contracts with government have played a key role in supporting our scale up.”

36. WHAT WE WILL DO Continue to support Government’s cutting red tape programme Encourage continuing digitalisation and simplification (e.g. doteveryone work) Encourage larger companies which are procuring with Government to support scaling businesses in their supply chain

37. “I would be able to grow my company faster if local and sub-national government made available publicly-owned offices and buildings on flexible, short-term contracts.” 77 % OF 163 SCALE-UPS AGREE 77 % OF 442 CEOs AGREE

38. WHAT WE WILL DO Work with local and regional public and private sector to develop, source and promote opportunities of dedicated space for scaling businesses