Explore the ScaleUp Annual Review 2021

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Access to Markets

The ability to enter new markets – both at home and abroad – continues to be the most critical issue for scaleup leaders particularly as they emerge from the Covid pandemic and tussle with new trading relationships after the end of the Brexit transition period in January 2021.

Scaleups have highlighted access to domestic and international markets as the number one challenge to further growth in the 2021 Scaleup Survey.  More than three-quarters (78%) said that better access is a vital or very important factor for their future growth.  

And their ability to access those markets will play a significant part in the UK’s future trading position as they see themselves very much as international businesses.  Just over half (57%) of scaleups currently export and 65% are seeking to engage in (more) international trade in the coming year.  They see valuable opportunities in North America, Australasia, the Middle East, China, India and other parts of Asia. While the EU remains an important current and future market, 62% have told us they aspire to export more to countries outside the bloc. 

Given this international dimension they make a powerful case for more support to realise their ambitions.  Particular challenges are: finding local support or partners in overseas markets (cited by 45%), limited access to customers overseas (44%) and not having the people or the right talent to win overseas sales (40%).

Against this background it is pleasing to see the continued development of the Mayor of London’s International Business Programme which we have endorsed since 2017.  Alongside its highly structured support for businesses in the capital seeking new markets it has launched a programme within a programme for companies with an interest in India and China.  This provides a 12-month “deep-dive” with specific content and mentoring as well as monthly sessions with in-market teams and specific client engagement opportunities. At present the highly-curated project is in the pilot stage but could be developed for other markets. 

This year we also identify Greater Manchester’s Global Scale-up programme as One to Watch for its role in breaking down the barriers to access international markets for scaling businesses in the North West building on learnings from the Mayor’s International Business Programme in London. The four stage programme features an account management structure to ensure the outcomes and experience are bespoke to each participant’s needs. Following discussions at the 2020 ScaleUp Review launch, it has also continued to build relationships with the London programme and this year the two collaborated to launch REACH – the London and Manchester: Race Ethnicity And Cultural Heritage Virtual Trade Mission to North America. Find out more about the lessons from these two international programmes in the insight, Tales from two cities.  

Another standout endorsed programme is Silicon Valley Comes to the UK (SVC2UK).  Alongside its year-round series of events that bring together students, policymakers and first-time CEOs with serial entrepreneurs and investors from the US and the UK and bespoke mentoring service, SVC2UK has launched a specific programme for women founders.  HERizons will work annually with a cohort of 15 female entrepreneurs for a full year to help them secure series A investment; it will also include a trade mission to Silicon Valley. 

Although scaleups are productive and innovative businesses than their peers, collaboration rates remain stubbornly low. In responses to the 2021 Scaleup Survey almost 6 in 10 scaleups said they were selling B2B to large corporates but far fewer (3 in 10) have worked with them to develop a new product or service and it is a similar picture with Government where only 4 in 10 have sold directly to the local or national Government and just 2 in 10 have collaborated on a product or service.

The ScaleUp Institute’s ongoing analysis with Tussell of Public Procurement activity emphasises this. Across 2020 Visible scaleups were awarded £1.9bn of public sector contracts, but amounted to only 2% of all suppliers to government. The first half of 2021 shows some progress with this cohort of scaleups so far winning £1.36bn of contracts, however this remains only a very small proportion (1.8%) of the total value of all awards. 

Rates of collaboration and procurement from scaleup must increase if we are to improve the access to markets – and it is a win-win solution as these ambitious businesses offer such high levels of innovation.  To achieve better collaboration both government and corporations need to simplify their process, raise awareness of opportunities and accelerate the time it takes to negotiate and sign contracts. There is also a need to implement more effectively the use of the SBRI across departments; the Social Value Act; dedicated objectivised procurement officers; and meet the buyer opportunities. 

As SUI data reflects, 4 in 10 scaleups sit within supply chains to government and large corporates and we continue to encourage initiatives that work with companies in the supply chain in addressing their scaleup needs. It is therefore pleasing to see progression in the Sharing in Growth (SiG) programme which works now across the aerospace and offshore wind industries. Further action is still needed to benefit scaleups in supply chains for other sectors, an opportunity exists to enhance support and collaboration between suppliers as currently only 1 in 10 are offered connectivity to their peers through a formal, curated network within the supply chain. 

There is also a need to raise awareness among larger corporates about the real business benefits offered by working with scaleups.  The Open Innovation Fellowship launched in 2020 by London and Partners in collaboration with the Royal College of Art, is one such example but more needs to be done.

We also continue to observe the development of Match-Maker Ventures (MMV) whose 120 Match Makers are working in more than 40 counties to guide businesses and established corporates to each other. 

As the economy emerges from Covid and new trading relations are brokered post Brexit we encourage the ecosystem to act swiftly to introduce more programmes that help scaleup achieve their ambition to grow both at home and overseas. 

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