Background

The past year has been challenging for companies across the Leeds City Region with confidence dropping off in the face of macroeconomic and exporting challenges. Despite this the region’s scaleup and wider SME community remains robust. Leeds maintains a strong and diverse scaleup base that spans sectors and geographic areas. In July 2022, Leeds City Region’s Strategic Growth Survey showed that 84 per cent of businesses expect an increase in employment in the next 12 months and while business confidence about the future was high this was beginning to show a slight tailing off from levels prior to start of 2022, echoing findings from the Annual ScaleUp Survey.

Competition from larger brands regionally and nationally makes finding, recruiting and retaining the talent to grow a business a major challenge for scaleups in the region. Working with local universities and business schools, the Combined Authority aims to address the digital skills shortage by leveraging the clustering of the region’s seven universities’ talent pool. Despite material and supply chain challenges, the region’s manufacturing sector remains strong. 

A sector focused approach remains central to Leeds City Region’s scaleup support with its Growth Hub acting as the central access point for business support. A team of 16 Growth Managers proactively target companies with growth ambitions, referring them into scaleup programmes. Key developments include a shift in focus to quantifying and incentivising productivity, and employment support to upskill existing staff and recruitment.  Sector focused support is delivered through targeted accelerator programmes, mentoring and access to finance. 

ONS data for 2020 shows that there are 1,095 scaleups in the Leeds City Region LEP: 415 are classified as scaleups due to rapid growth in their employees, 880 are classified as scaleups due to rapid growth in their turnover and 200 are scaleups that are increasing both employment and turnover simultaneously.

The ONS data reflects that across the four-year period from 2017 to 2020 the density of scaleups has decreased by -1.99 per 100,000 of population per year.

SCALEUP PROGRAMMES

A range of structured support for scaling and ambitious early stage businesses looking to scale up is delivered and supported by the Leeds City Region LEP and the West Yorkshire Combined Authority. 

The ​​Manufacturing Growth Programme and the Manufacturing Champions Programme deliver targeted support for manufacturing scaleups. The Growth Programme is delivered across Yorkshire, the Midlands and parts of the South East. Launched in 2016, it provides support via a dedicated Manufacturing Growth Manager focused on helping scaleups to develop and enhance their growth plans, identify opportunities for growth and connect with experts from across the ecosystem. Manufacturing Champions was launched in 2020 and is delivered in partnership with the University of Huddersfield. It gives scaleups access to an integrated package of advisory support and financial assistance to accelerate growth. The University element consists of a three-year blended package of bespoke and intensive support including mentoring, coaching, technology adoption and peer learning as well as grant finance. 

Made Smarter is tailored to early stage and scaleup manufacturers who want to adopt innovative new Industry 4.0 technologies. Focused primarily on productivity it also features a wider package of support including leadership, management, digital tools and intensive technical advice as well as capital investment.

The Strategic Business Growth Programme is an integrated package of one-to-one advisory support, along with financial assistance for scaleups. Participating businesses undergo a growth diagnostic to match them with a specialist Growth Coach and support is tailored to their scaling needs. Participants receive dedicated relationship management from the programme’s Strategic Growth Manager. The programme which is currently matchfunded by the ERDF is due to run until June 2023.  

The recently launched Foresight West Yorkshire SME Investment Fund, managed by Foresight Group LLP, is a £20m programme providing equity and debt investments of up to £2m to scaling companies in West Yorkshire to support economic growth and job creation. It is targeted at growth companies based in region who demonstrate strong growth potential and have the potential to become Net Zero by 2038. 

The AD:VENTURE programme offers a mix of tailored business support to boost growth and develop early-stage ambitious businesses under three years old. This includes financial and mentoring support as well as intensive support and guidance on key themes such as innovation, product development and access to talent. The Northern Max Business Accelerator is an expansion of the AD:VENTURE programme which aims to develop and grow the scaling pipeline in the technology sector in Bradford and Leeds. This year the fourth cohort will start this programme.

Offered by the Leeds University, the Exceptional NED training programme has been designed to enable experienced business executives to gain the skills and knowledge to become an effective Non-Executive Director (NED) through a blend of workshop sessions and 3 month placement as a NED at a local scaleup. On completion of the programme, participants will be awarded a certificate and the opportunity to apply to join the national NED network.

Scaleups can also access growth support through regional delivery of Help to Grow:Management. This supports leaders to develop a bespoke business growth plan with tailored support from one-to-one mentoring and peer learning.

There are also a range of more public and private programmes across the Yorkshire and the Humber region – find out more on the scaleup support finder here. 

IMPACT AND RESULTS

To date, the Strategic Business Growth programme has supported 665 ambitious and scaling businesses and created 1,139 new jobs.  25 scaling businesses have been awarded approximately £450,000 capital-related investment funding to accelerate growth.

Since 2106, the Manufacturing Growth programme has completed 887 strategic business reviews, allocated £1.4m in grants and supported in the creation of 962 jobs. 

Since November 2021, Made Smarter has supported 135 businesses with digital road-maps and intensive technical support, and invested £154k in 18 Industry 4.0 projects. 

FUTURE PLANS

A continued focus on innovation, skills and capital investment will underpin future scaleup support along with a sharper focus on productivity.  This includes developing a transformational digital programme, looking towards a higher level of support for participating scaleups. A new £4.5m business productivity programme of advisory and financial support will be running from October 2022 to March 2024. The programme aims to assist businesses with improving productivity, to bridge  the productivity gap between West Yorkshire and the UK average. Advisory support will focus on better benchmarking and measuring productivity, while new funds providing grants of up to £50k per business to invest in new technologies will be available for scaling businesses.

LONGITUDINAL ANALYSIS

According to ScaleUp Institute analysis of data received directly from ONS for years 2017-2020, the following picture emerges on the local environment.

Local Authorities located within the Leeds City Region LEP have a moderate density of scaleups, and the trend between 2017 and 2020 reveals that none of the local authorities showed an increase in the density of scaleup businesses, and the majority showed an above median increase in scaleup density.

Scaleups by Density: Needs Improvement

The vertical axis of this matrix shows where local authorities located in this LEP stand compared to the rest of the UK: 3 of the 5 local authorities have a below median density of scaleups measured by employment growth and 4 of the 5 local authorities have a below median density of scaleups measured by turnover growth.

Scaleup Trends Over Time: Moderate

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: 3 of the 5 local authorities are above the median in terms of improving the density of scaleups by employment in their community and 3 of the 5 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.