Scaleup Identification – Data

Data held by the Government – particularly HMRC – has the power to stimulate economic growth. The ScaleUp Institute has long made a powerful case that SMEs are not homogenous and over the past few years the Government has begun to recognise the value of this approach in harnessing resources toward our high growth potential and scaling firms.

Recognising this should form a clear part of the Government’s future National Data Strategy¹. The work which we have undertaken as part of the DECA² project alongside HMRC, BEIS, the Cabinet Office and the Behavioural Insights Team to look at more effective use of data has shown clear results³.

Our 2020 Scaleup Business survey shows that 61% of scaleups want a single point of contact to act as a relationship manager, and 54% want proactive engagement about new initiatives. This is exactly what has been shown to work by the DECA project.

As the Government recognises,⁴ much of the transformative potential of data lies in the potential for linkage and re-use of datasets across organisations, domains and sectors. This is especially true within Government itself. Whilst it is essential to recognise the wider impacts of personal and private sector data within our economy, Government often still falls short at effective use of data within its own ‘walled garden’, particularly in relation to business specific data and appropriate data sharing between departments. Initiatives to look creatively at how to best share data between departments, as outlined above, are not yet standard practice. As there are not well-trodden paths to interdepartmental collaboration in this area, departments often still need to overcome significant internal barriers.

Developing the right processes to allow data such as HMRC VAT returns and National Insurance information to be used effectively across government as part of stimulating economic growth can be transformational, particularly in a time of economic recovery.

The use of this data should be coupled with targeted programmes to tackle the five main broad scaleup challenges which we detail in this chapter allowing for more granular segmentation. Consideration should also be given to the best way to devolve access to this data to appropriate local institutions, to provide a ‘data backbone’ allowing for proactive engagement at a local level. This also opens up wider possibilities to fast track services for scaleups, including a fast-track Scaleup Visa programme within particular areas; targeted procurement policies where administrative hurdles can be reduced to boost growth; quicker identification of export opportunities; and smoother access to growth capital. This data will also help to enable local ecosystems to develop stronger clustering environments with corporate entities and support scaleup businesses more effectively as they grow.

Alongside this, we continue to call for the development of Scaleup Status as a formal business classification to aid in the creation of a comprehensive national CRM to sit behind each of the engagements that take place. This will make significant inroads in enabling businesses to navigate interventions and access the right service at the right time: simplifying the process, reducing friction and accelerating opportunities. 

SUMMARY

Covid-19 has shown the real power of local engagement. Whilst virtual meetings have reduced travel substantially, local areas and local institutions such as LEPs, Growth Hubs and Local Authorities have been front line delivery organisations and awareness of them has increased during this period. It is right that local areas are empowered to engage directly with businesses, and data remains fundamental to ensure that these communities can crowd local ecosystems together and engage with scaling companies on a timely basis . 

This work should now continue at pace. It should be expanded to include focused messaging on exports, innovation and finance as well as evolved to include private sector support, and better fast tracking of visa applications. We also want to see progress on identifying how government datasets can be opened up on a more timely and public basis. If necessary, this should include legislative change.

RECOMMENDATIONS

1. USE DATA TO IDENTIFY AND FACILITATE CONNECTION TO, AND ACCESS BY, SCALEUPS 

The forthcoming National Data Strategy must specifically create clear protocols for the effective sharing of business data held within HMRC between national and local government agencies – for the purpose of enabling targeted engagement of scaling firms to gain access to the expanse of relevant Government support programmes, including procurement, Innovate UK, export, finance and visa services. It should build upon the recent work of the ScaleUp Institute with Government on the targeting of engagement, and tap into datasets that combine ONS, Companies House and HMRC data points to enable stakeholders to fast track solutions to scaleup leaders.

Further, we believe a verification process should be developed allowing local and national stakeholders in the private sector to verify the ‘scaleup status’ of a business, enabling wider services and fast-track solutions to be applied.

If necessary, legislation should be passed to enable this strategy to be implemented effectively and be factored into the delivery of the National Data Strategy. In the meantime, the scaleup data pilots initiated with Government should be continued and built upon.

6. SEGMENT SCALEUPS LOCALLY & NATIONALLY

The Government – in any initiatives including the forthcoming Industrial Strategy Refresh, Business Support Review and Comprehensive Spending Review (expected 2021) – should ensure that there is distinct segmentation of scaleups as a ‘sector’ and that funding for impactful business support (whether it be mentors, leadership or networks) has a significant focus and segmentation towards our scaleup businesses who are generators of wealth, exports and productivity to the UK economy. No gap in scaleup support provision should be allowed to arise in light of the UK’s changing relationship with the EU.