BACKGROUND

D2N2 is working to create a more prosperous and better connected economy in its region that is increasingly resilient and competitive. The LEP has a history of supporting established and new businesses through the local Growth Hub but the Driving Economic Growth alerted policymakers and Nottingham Trent University’s Business School to the advantage of targeting support towards selected scaling companies.

Following the DEG course D2N2 strengthened its relationship with Nottingham Business School leading to the creation of an ERDF-funded UpScaler Project following a pilot. The programme is delivered in a partnership by the University and the East Midlands Chamber. The DEG experience also highlighted the importance of creating a supportive ecosystem which has encouraged greater collaboration between stakeholders, including the East Midlands Chamber, the Midlands Engine Investment Fund, DIT and Enterprise Europe Network.

ONS data for 2017 shows that there are 1,025 scaleups in the Derby, Derbyshire, Nottingham and Nottinghamshire LEP: 365 are classified as scaleups due to rapid growth in their employees, 870 are classified as scaleups due to rapid growth in their turnover and 210 are scaleups that are increasing both employment and turnover simultaneously.

The ONS data reflects that across the four-year period from 2014 to 2017 the density of scaleups has increased by 3.22 per 100,000 of population per year, which is below the median of +3.90 per 100,000 of population.

SCALEUP PROGRAMMES

The UpScaler programme begins with a comprehensive diagnostic with one of two specialist business advisers. Participants are then signposted towards UpScaler activities, including a Leadership and Management Development programme targeting priorities, such as strategic and team development, leadership financial management and access to new markets. Participants also receive a monthly invitation to UpScaler Forums focussing on topics related to innovation and growth. The Forums provide an opportunity to learn from peers and tough questions provoke some very open discussion.

A choice of grant subsidy packages is also available. Participants can benefit from a subsidy of up to £1,500 towards the cost of an external coach or 20% towards the first-year cost of employing a recent graduate depending on their growth needs. They are also signposted towards other sources of advice and learning.

There are three eligible categories of business: scaleup businesses employing more than 10 people with turnover between £1million and £45million and annual growth of 20% or more for the past three years; potential scaleups as above but which have achieved growth of 10% or more for the last three years or 20% for the past two and ambitious businesses that demonstrate scaleup qualities. Business leaders are expected to commit to one day a month over 6-8 months to attend relevant workshops and 2-3 hours a month to attend the peer-to-peer forum.

IMPACT AND RESULTS SO FAR:

The UpScaler programme has incorporated research-based evaluation that will build on initial metrics and diagnostic materials. This will provide an objective measure of impact as the programme progresses.

LESSONS LEARNED:

It is early days and UpScaler’s first round of workshops is still underway but initial feedback has been very positive towards the approach of allowing two participants from each business to attend. Several colleagues regularly attend together, enabling them to take away agreed plans for the implementation of new approaches. This approach also helps them to dedicate time to working together on the business.

FUTURE PLANS

Funding is being sought to extend UpScaler for a further three years. Any extension to the programme will also further target female and ethnic minority entrepreneurs with scaleup potential currently under-represented among scaleup leaders.

LONGITUDINAL ANALYSIS

According to ScaleUp Institute analysis of data received directly from ONS for years 2014-2017, the following picture emerges on the local environment.

Local Authorities located within the Derby, Derbyshire, Nottingham and Nottinghamshire LEP have a moderate-low density of scaleups, and the trend between 2014 and 2017 reveals that the majority of the local authorities showed an increase in the density of scaleup businesses, but few showed an above median increase in scaleup density.

Scaleups by Density: Moderate

The vertical axis of this matrix shows where local authorities located in this LEP stand compared to the rest of the UK: 10 of the 17 local authorities have a below median density of scaleups measured by employment growth and 11 of the 17 local authorities have a below median density of scaleups measured by turnover growth.

Scaleup Trends Over Time: Needs Improvement 

The horizontal axis of this matrix shows whether the density of scaleups has increased or decreased over time relative to the rest of the UK: 9 of the 17 local authorities are below the median in terms of improving the density of scaleups by employment in their community and 10 of the 17 local authorities are below the median for scaleups by turnover.

The ScaleUp Institute will continue to monitor this closely in the coming years to track whether local initiatives move the dial in the right direction for increasing the density of scaleups.