scale up report deck for second home

17 April 2015

THE SCALE-UP REPORTON UK ECONOMIC GROWTH

Sherry Coutu CBE

#scaleup

http://www.scaleupreport.com

An independent report to the government


|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE

ENTREPRENEURSHIP

2000

Floated second Start-up

1986

Came to the UK to attend the

London School of Economics

1987

Became a Computer

Programmer

1991

Studied Business at Harvard

1994

Joined my first

‘start-up’

1995

Founded second Start-up

Sherry Coutu CBE < 2000

1997

first ‘startup’ sold

#scaleup

THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE#scaleup

“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


“First mover advantage doesn’t go to the first company that

launches, it goes to the first company that scales.”

Reid Hoffman, co-founder of Linkedin



“Whether making better use of the

information out there about which are

our most promising firms, or

coordinating support at a local level, the

report is packed full of straightforward

recommendations that point not only to

how Britain can pay its way in the world

but how it can do so in a way that

enables far more people than now can

build the life they want – that is why

Sherry’s insightful report is so important

and a real clarion call for policy

makers to act."Chuka Umunna MP and

Shadow Secretary for

Business, Innovations and

Skills


“This report makes a compelling

case for getting behind the UK’s

high growth ‘scale-ups’ and I hope

all political parties seriously

consider its recommendations.

These firms are already having a

transformational impact, we just

need more of them to grow.

Helping them access the talent

they need, develop their

leadership and access new

markets are the priorities.”

John Cridland,

Director-General

CBI


Will Hutton,

Principal of Hertford

College Oxford and Chair

of the Big Innovation

Centre

“Britain confronts a scale-up crisis,

and Sherry Coutu is to be warmly

congratulated on opening up an

issue that has for too long gone

unexplored and unremedied.

If the country is to capitalise on its

strengths and emergent

entrepreneurial culture then it is

vital that we construct the

ecosystem in which more start-ups

and young firms grow to maturity.

We need the debate which I hope

this report will trigger: but we also

need radical action”.


“This report is a welcome

contribution in the context of

Greater Manchester’s recent

devolution deal with

Government and will support

us as we look to deliver

targeted business support to

our local high growth firms.”

Mike Blackburn

Chair of Greater Manchester LEP

“Competitive advantage doesn’t go to the nations that focus on

creating companies, it goes to nations that focus on scaling

companies.”



Key Findings

http://issuu.com/endeavorglobal1/docs/what_do_the_best_entrepreneurs_want

THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE

Achieving additional

economic growth

does

not

require

significant

additional

funds

If coordinated by

local leaders

who

Collaborate

with

business and universities


http://issuu.com/endeavorglobal1/docs/what_do_the_best_entrepreneurs_want


Definition

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



https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/254552/13-92-business-population-estimates-2013-stats-release-4.pdf

#scaleup

|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE#scaleup


STARTUPS DO NOT CONTRIBUTE TO NATIONAL OUTPUT

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

This research also found that only a small group of start-ups achieve

significant growth in revenues – just one per cent have sales of more

than £1 million six years after they start

1 %It also found that the average new firm, despite the hype that surrounds

startups, made a negligible contribution to British productivity growth.

#scaleup

Methodology

8,923



SCALE-UPS ARE THROUGHOUT THE COUNTRY

Find them all here! http://www.scaleupbritain.com

Scale-ups are found in each of the 39 LEP areas

6,659 (75 per cent) are located outside 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

• Reference Appendix 3 and 4 in hand-outs….

#scaleup

http://www.scaleupbritain.com


The 3 year gross impact of moving 1% of businesses to HGF mode

(244% over 3 years)

Source: RBS Working Paper: Oct 2014 High Growth Firms and the Economy

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

+



GROSS Impact of closing the scale up gap in 20 years

1,400,000,000,000


NET Impact of closing the scale up gap in 20 years

225,000,000,000



100 %

Net New Jobs created in Europe in the past 5 years were from companies less than 5 years old….


THE PACE OF CHANGE IN OUR ECONOMIES IS HIGH AND INCREASING


990,000

.

Source: Adzuna


THERE ARE A LARGE NUMBER OF ‘OPEN POSITIONS’

#scaleup


1M

Number of new science,

engineering and tech

professionals required in the UK

by 2020 (Royal Society 2014)

5.8M

Number of people forecast to

be needed in the app economy

by 2018 (OECD)

THE SKILLS GAP IS SET TO GET LARGER….

#scaleup

|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBETHE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE


#scaleup



KEY RECOMMENDATIONS

Recommendation 1:

“National data sets should be made available

so that local public and private organisations

can identify, target and evaluate their support

to scale-up companies, and evaluate their

impact on UK economic growth.”


#scaleup

Demand the data so that you can have an accurate measure of what is going on



KEY RECOMMENDATIONS

Recommendation 4

A Minister should be made responsible for

reversing the scale-up gap by 2025 with

cross-departmental resources allocated,

independent bodies named to monitor and

a task-force appointed to deliver a scale-up

report to the Prime Minister every

November for the next five years.


#scaleup

Check www.scaleupbritain.com to see how your LEP is doing on scale-ups




LEPS ARE BEING TRACKED by REGION… http://www.scaleupbritain.com



Scale-ups ARE BEING TRACKED by LEP… http://www.scaleupbritain.com



Scale-ups ARE BEING TRACKED by MP… http://www.founders4schools.org.uk/LEPS


AND ARE BEING TRACKED LOCALLY… http://www.scaleupbritain.com



Scale-up Leader Search by LEP flow


AND ARE BEING TRACKED by LEP… http://www.founders4schools.org.uk/leps

Julie Deane: Cambridge Satchel Company

Inspired by her children being bullied at school, Julie started up

her own company so she could afford to send her children to

private school

Lucinda Bruce Gardyne from Genius

Foods

Inspired by her child’s

allergy to gluten and her

passion for chemistry,

Lucinda set about creating

a loaf so her eight year old

son Robin, who had a

wheat allergy, could dip

bread soldiers in his boiled

eggs at breakfast.

Kate Ryder from Maven

Maven is the first

telemedicine platform for

women, offering on-

demand video

appointments with health

and wellness providers

including OB/GYNs,

pediatricians, nurse

practitioners,

nutritionists, lactation

consultants, mental

health providers, physical

therapists, and doulas.

https://www.linkedin.com/profile/view?id=118294936&trk=hp-identity-name


KEY RECOMMENDATIONS

#scaleup

Do you know the 50

fastest growing

companies in your

Local Area?


KEY RECOMMENDATIONS

#scaleup

What resources are

devoted to helping

schools, colleges and

universities engage

with your ‘ fast 50’.


Message *

When you (or MPs) speak publicly, the words and phrases you use influence people.

Here I suggest that you use and avoid the following words:

Words to use: growth, growing, achievement, success, sales, customers, scale-up,

becoming big, exporting, global, challenge, markets.

Words and phrases to avoid during the same message:

small business, self-employment, micro-enterprise… “are the pillar of our economy.”

(Comment: Need to distinguish between small business and entrepreneurship:

entrepreneurship is inherently about growth, and only 1-6% of small businesses grow to

even a very modest extent—everywhere in the world).

Have your speech writers (or communications director) ensure that these words are

repeated in different contexts and different media

* Adapted from Dan Isenberg’s advice to Mayors in US cities.


LISTEN *….

Does your MP have a monthly breakfast with 6-8 scale-up entrepreneurs in small

groups.

Make sure some of them, not all, are growth driven, not small mom-and-pops. Not the

big ones that are shrinking…

• Scale-up photo on your site.

• Encourage the entrepreneurs to tweet about the meeting.

• Talk about how you can help them with the talent they need to accept more

customer orders so they can create more jobs and economic growth locally (which

you can tax).

• Adapted from Dan Isenberg’s advice to Mayors in US cities.


Visit*

Does your school invite at least one scale-up venture a month to speak to current

students? Do they feature scale-ups at career fairs (or do they only invite

accounting firms, law firms and big companies?)

Avoid the “usual suspects.” Photographs, web site recaps, are all good.

Why not use the website http://www.Founders4schools.org.uk to find out?

The advantage here is that these founders are all running businesses with more than

£ 1 million in turnover and that these businesses are growing.


Visit*

Does your MP visit at least one scale-up venture a month for 15-20 minutes (or more,

but 15-20 are sufficient to strongly complement the words you use).

Avoid the “usual suspects.” Photographs, web site recaps, are all good.

Why not use the website http://www.Founders4schools.org.uk to help you decide?

The advantage here is that these founders are all running businesses with more than £

1 million in turnover and that these businesses are growing.


Celebrate *…

Have one of your staff, or someone in the community, alert your community

continually to wins – big sales, new sales contracts, new stores opening up

and new marketing partners are the top priorities and convey the right

message – growth, growth growth.

If you win an award, call them up, mention it in the press, have your office put

out a press release, invite your local MP for a handshake and a photo.

Do this at your school or university



Convene *

The number one issue for scale-up entrepreneurs is access to skills (schools &

universities are not producing enough skilled people at the moment).

• Help your schools with that!

the number two issue is help holding together the senior leadership teams to

cope with the practicalities of growing a business from 100 staff to 500 staff in a

year or two.

• encourage the creation / roll-out of initiatives that help scale-ups get people

with the skills they need).



Learn more*

• There are some great 3 day exec ed courses available on ‘how to

supercharge your Local Economy’ The best one I know runs 11-13 May

in Boston and there will be representatives from 17 other countries also

studying best practice practical lessons on how to improve the proportion of

scale-ups in their area.

• Start today by visiting some of the websites I mentioned

• http://www.scaleupreport.com (case studies a good resource)

• http://www.scaleupbritain.com (your fast 50)

If you know a teacher, school governor, parent or a student, point them at

• http://www.founders4schools.org.uk/leps so they can get in touch with

your ‘fast 50’ for classroom talks, workshops, career fairs or work

experience…



http://www.founders4schools.org.uk/leps

THE SCALE-UP REPORTON UK ECONOMIC GROWTH

Sherry Coutu CBE

#scaleup


An independent report to the government


Economy & Finance

scale up report deck for second home