Infrastructure

The evidence clearly points to scaleups flourishing when they can cluster in sectoral groups and hubs. This was one of the major conclusions of the ScaleUp Institute’s research with Arup into the drivers of local scaleup growth. Hubs enable businesses to progress and grow faster through facilitating access to shared resources, knowledge, collaborative opportunities, investors and a range of support.

This evidence is particularly strong in the life sciences sector where programmes like the endorsed Alderley Park and Babraham Research Campus have been extremely effective in creating a community approach. The ScaleUp Institute has been very pleased to see more developments of this approach, such as ScaleSpace based in London’s White City and supported by Imperial College London.

These exemplars provide clear demonstrations of the power of hubs to help scaling businesses deliver growth and innovation by harnessing access to research facilities, technical expertise, mentorship and peer-to-peer networking alongside flexible office or lab space. 

Recent evaluation of Babraham’s economic impact showed that companies estimated being located on the Campus had on average accelerated their fundraising by three months and increased the amount of funds raised to date by 10%. In addition, the number of employees is estimated to be around 20% larger than it otherwise may have been due to the Campus location. Alderley Park is now home to more than 200 businesses and members of its accelerator have access to a 250+ expert mentor network and workshops. Its Oncology Development Programme featured last year has made strong progress in its first year with six selected companies selected set to innovate and disrupt oncology research.

Our other endorsed programmes also share characteristics that promote growth: access to flexible infrastructure that can expand as businesses scale further, opportunities to network with peers, share expertise and access to experts as well as intensive coaching. Many turned to virtual programming during the pandemic but are beginning to reintroduce in-person programmes as conditions allow.

NatWest normally delivers its Entrepreneur Accelerator in 12 hubs across the country. During the pandemic it continued to offer networking events, workshops and 1:1 coaching virtually but is now beginning to reintroduce in-person events. During 2021 new content was introduced focussed on building back with themes such as accessing new markets and cultivating an effective team designed to help growth post pandemic and four sector-specific accelerators were launched – high growth, fintech, purpose-led and climate. Further specialist accelerators – sector and regional – are planned.

Barclays Eagle Labs now provides a network of 24 incubators offering mentoring and co-working as well as office space for ambitious high-growth businesses with a strong focus on collaboration and prototyping. The successful launch and delivery of the Barclays Black Founder Accelerator in 2020 saw 25 Black founder-led companies go through the programme. In 2021 Barclays expanded the programme to support 40 businesses, the second cohort begins in November 2021.

As the 2021 survey demonstrates, scaleups are highly innovative. They are significant adopters of new technologies, and many work in partnership with others to develop new products and services. Nine in ten have engaged in some form of innovation related activity; three out of four scaleups have introduced a new or significantly improved product, process or service in the last three years. A similar proportion have invested in areas linked to innovation.

In 2019 we endorsed the FCA Sandbox for the innovative ‘space’ it has created to help growing financial service companies test their businesses models and for the impact it is having for these businesses both at home and internationally. Following the success of a pilot during the Covid lockdown a second cohort of a digital sandbox will be running at the end of 2021 focused on the theme of sustainability/climate change to support the UK’s green finance ambitions. In addition, in response to the Kalifa Fintech Review, which reinforced the importance of clusters to the growth of the fintech scaleup economy, and with which the ScaleUp Institute was fully engaged, the FCA is now establishing a ScaleBox to enable fintechs at the next stage of growth to accelerate their journey and speed products to market. 

We identified Digital Catapult as one to watch for its provision of physical and digital facilities and advanced technology testbeds. In the last year it had worked with a consortium of digital creators to create mixed reality training resources for healthcare workers dealing with Covid-19 and within a few weeks the consortium had developed 2D videos and volumetric holographic videos as well as a platform for global distribution of the content. Digital Catapult which supports scaling and pipeline businesses adopt advanced digital solutions will shortly be expanding its offer by launching a grow accelerator to better support the needs of scaleups.

We also continue to monitor other initiatives that link working space with mentoring, skills training and leadership education. In 2020 Engine Shed based in Bristol was named “Hottest Accelerator in Europe” and in 2021 it announced that it was expanding its focus by launching a specialised programme for local high-growth fintech companies.

Cambridge Cluster Insights (formerly Cambridge Cluster Map) continues to develop. As well as providing visibility of scaleups in its area it has developed an SME Observatory in collaboration with Metro Dynamics to help the Cambridgeshire and Peterborough Combined Authority identify scaleup and other high-growth businesses to be targeted by its Business Growth Service.

One to Watch Level39 is currently home to 178 pipeline and scaling businesses who are encouraged to work with one another, buy from one another and collaborate. The digital event series launched during the pandemic Level39 has continued on topical themes such as fintech, blockchain and cryptocurrency. 

These endorsed programmes and the Ones to Watch offer important lessons in how to create the conditions that nurture scaling companies that will propel them to the next stage. There are excellent signs that these approaches are expanding and developing further.