The recent Industrial Strategy Green Paper set a welcome tone – engaging directly with the benefits that scaleup businesses have for UK wide productivity and economic growth.
Although the rapidly approaching General Election has been a surprise, it does not change the fact that continuing work to develop a clear Industrial Strategy is an important task for the incoming Government in June – regardless of its makeup. It also doesn’t change the fact that scaleup businesses should be at the heart of a strategy intended to boost productivity and maximise growth.
Indeed, the appointment of a Scaleup Champion at Ministerial level which we have consistently called for, has been a strong signal that making the UK a good place to grow a business, as well as to start one, is firmly on the agenda and we hope such a role will continue in whatever new Government is formed.
In our response to the Industrial Strategy we reminded Government that scaling businesses consistently face the same challenges as they look to continue their growth:
- Building leadership capacity;
- Accessing the right talent and skills, including on an international level, to grow;
- Getting the right access to markets both on an international and domestic level, and;
- Attracting appropriate finance and risk capital.
Our key messages are :
Build on what works – Building on what exists today at an institutional and local level, and learning from existing good practice, is essential. This means making best use of, and strengthening the LEP Network, Growth Hubs, Innovate UK, Catapult Centres and Knowledge Transfer Partnerships.
Make effective use of existing data sources – Government should continue work to enhance openness and usability of data. The use of HMRC data – with Companies House – to help identify fast growing firms more quickly is central to improving the ability of private sector partners and the broader public/private eco-system of support to ‘lean in’ to provide help and guidance as firms need it. This includes the opportunity to develop a scaleup ‘status’/ ‘market test’.
Leverage procurement and export opportunities – Government should recognise the role that it can play in acting as an ‘anchor’ customer learning from its US counterparts, and through encouraging corporations it buys from to make clearer efforts to support fast growth firms through their supply chain. DIT effort should be focussed most on fast growing firms and those exporting already rather than purely new businesses exporting.
Make it simple to navigate – Building on some of the developments since the 2016 Driving Economic Growth course, to create a network of scaleup “navigators,” (as per the Scottish account manager and private sector models) embedded into the LEP-Growth Hubs and product specialisations (e.g DIT, Innovate UK), could be extremely beneficial. This would operate in a similar manner to private sector business relationship models and would make it easier for time-pressed leadership teams from fast growing firms to navigate their local ecosystem. In addition, mirroring of the Ministerial role at a local level through LEP chairs or Mayoral offices would also valuable.
Align the skills and research agendas to scaleups – build on Careers & Enterprise Company work; ensure schools and scaleups are on LEP Skills and main Boards; encourage even better connections between educational establishments, LEPs, Growth Hubs, Business Schools and local scaleups (consider how to build on Small Business Charter work) so that local needs are spotted and acted upon. Teachers will need ongoing support, and objectives should be aligned so that schools and businesses can work better together.
The significant investment the Government makes through UKRI and the Challenge Fund must ensure our research and innovation drives are closely connected to scaling businesses – and sectors. It should be mandated that those accessing such funding must ensure engagement with scaleups, including the opening up of research facilities and deployment of students to projects with scaling businesses.
Create infrastructure capacity for growth – Fast-growth businesses need to identify available real estate quickly. The Government, working with LEPs and cities, should consider an online digital tool, along the lines of the ‘Workspaces’ finder tool developed by the London Enterprise Panel Growth Hub, to showcase such real estate, making it easier for scaleups to identify available offices quickly and efficiently.
Capacity is also provided through ensuring the cost of doing business in the UK is optimal across industry sectors – it will be crucial to maintain an oversight of this compared to international benchmarks if we are to remain at the forefront of cutting edge industrial developments. The Government must also continue its Digital drive and deliver upon the recently announced Digital Strategy and Digital Skills Partnership – these are all crucial elements to the foundations of the Industrial Strategy to ensure productivity, growth and opportunity is fostered and optimised across all geographies, sectors and generations.
Co-ordination between initiatives will be vital to ensure the outcomes are optimised – It will be key for any future Patient Capital review to focus upon how we broaden the investor base, both institutional and retail, as well as how we continue to address regional and sector equity disparities, alongside broader fiscal and regulatory barriers, as part of a comprehensive strategy to improve the attractiveness of our capital markets. As we move towards Brexit, assessing the role and access to EIB and EIF schemes will be necessary, alongside how the role of the British Business Bank should evolve. The supply side is of course only one side of the equation and it will be equally imperative to increase the knowledge of scaleup business leaders in the forms and avenues to growth capital.
Our over-riding message to an incoming Government – whatever the make-up of that may be – is that a stable policy environment is essential. Maintaining a Ministerial representative, and continuing progress towards practical solutions for scaleups, harnessed through a taskforce that should be allowed to complete its work, will reap the biggest rewards for job creation, productivity and growth in local economies and across the UK.