BACKGROUND

The South East Midlands Local Enterprise Partnership (SEMLEP) area covers six local authorities and contributes £51bn to the national economy. It has a number of showcase sectors with a strong presence in the region and a significant potential for growth. 

These include the creative and cultural, advanced manufacturing and precision engineering, logistics and high-performance technology sectors. These sectors, and key clusters including the Silverstone Technology cluster, create a powerful ecosystem for scaleups and are more likely to contain scaleup businesses.  There is a particularly strong scaleup base in logistics and high performance technology. 

Data shows that scaleups in the South East Midlands are more likely to innovate than other local businesses and have strong links with the region’s universities and colleges. In particular, scaleups are more likely to be involved in collaborative research and development. The region is well served by academia including the Universities of Bedfordshire, Northampton, and Cranfield and the Open University.

Access to skills is a particular issue for scaleups in the South East Midlands and is the key barrier to growth. The overwhelming majority (93%) of scaleups carried vacancies over the past year. Science, engineering and production skills are in particular demand across the ecosystem. SEMLEP scaleups also continue to feel the impact of the pandemic as a growth inhibitor. Access to finance and investment to support growth is key demand along with more local government support and improvements to local infrastructure. Despite these challenges, the overwhelming majority of SEM scaleups report stable or improved performance over the past year and are optimistic about future growth.

SEMLEP’s scaleup support is delivered through a growth hub model with specialist advisers working with scaleup leaders to identify the right suite of support to meet their growth challenges.

ONS data for 2020 shows that there are 800 scaleups in the South East Midlands LEP: 295 are classified as scaleups due to rapid growth in their employees, 650 are classified as scaleups due to rapid growth in their turnover and 145 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 -2.53 per 100,000 of population per year.

SCALEUP PROGRAMMES

SEMLEP offers a range of support for scaleups and pre-scalers through its Growth Hub including its flagship Growth Curve programme.

The Growth Curve programme is run by the SEMLEP’s Growth Hub in partnership with the Universities of Bedfordshire and Northamptonshire and Cranfield University. As part of the programme, businesses take part in a specialist university masterclass, receive one-to-one support from a high growth business adviser and have access to a grant programme and peer network. The programme is tailored to help scaleups overcome current challenges including the ongoing impact of the pandemic on the South East Midlands ecosystem.

Masterclasses form the core of the programme and draw on the region’s academic expertise with the syllabus tailored to meet the needs of individual scaleups by Growth Curve Business Advisers. Masterclasses equip scaleup leaders with growth strategies, supporting them to plan objectives and new initiatives and ensuring they are well placed for further growth. Capital and Revenue growth grants of up to £50k are available to participating scaleups on a 25 percent match basis. 

Launched in March 2022, the Green Recovery and Innovation Grant scheme supports scaleups to develop innovation plans and plan their decarbonisation journey.  It offers specialist support and grants between £1k and £10K to enable scaling businesses to realising plans. Grants are designed to support innovation and decarbonisation initiatives with a particular focus on projects that create a significant, positive impact on the scaleup’s future. 

The Growth Hub partners with a range of organisations to deliver further support for South East Midlands scaling buinsesses including:

• Cranfield’s Business Growth Programme is the longest-established leadership programme for ambitious owner-managed businesses in the UK combining the latest academic thinking with peer-to-peer learning and facilitated conversations around relevant topics for business owners.
• Cranfield Ready for Scale, based on the model of Cranfield’s SUI endorsed Business Growth Programme, the programme takes scaling and pre-scaleup business leaders through a 12-week Growth Plan process to critically review their business and develop a clear vision for future growth and the steps and networks needed to achieve it. 
• The NatWest Entrepreneur Accelerator supports business leaders to scale their businesses to the next level. Its programme of wrap around support includes one to one coaching with experienced Acceleration Managers, a thought leadership and events programme and access to a network of like-minded peers, supported by Ecosystem Managers

The Growth Hub also offers workshops and webinars covering a range of business growth topics along with sector specialist support for scaleups in the region’s key showcase clusters. Further financial support is available to scaleups through the Midlands Engine Investment Fund (MEIF) which providescommercially focussed finance through Small Business Loans, Debt Finance, Proof of concept and Equity Finance funds. Angel investment is delivered through Central Arc Angels.

The Hub refers to scaleups on a number of other national and specialist programmes including Barclays Eagle Labs, Vistage, Innovate UK EDGE and DIT.  

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

IMPACT AND RESULTS

The Growth Curve Programme has engaged with 709 businesses. These have noted an average annual growth in turnover of 34% . 67 businesses received £592,667.64 in grant funding and have attracted £997,642.38 in investment. 

Since 2018, MEIF has invested £188m with an additional £283m in private sector funds in 828 investments, and has now supported over 582 businesses, with manufacturing continuing to be the most active sector. Additional £50m has been allocated to take the current MEIF to £300m, ensuring continuity of funding whilst the next generation becomes operational.

FUTURE PLANS

Future scaleup support will be informed by the success of Growth Curve. New work on innovation infrastructure will also benefit scaleups and SEMLEP is also planning a new grant programme to support capital investment to support growth. Ongoing partnerships across the support ecosystem will continue to provide mentoring and offer new opportunities for peer learning through a structured programme launching soon. 

As part of the Spending Review 2021, the Chancellor also announced a new £400m MEIF to be delivered by the British Business Bank to continue supporting businesses accessing finance in the Midlands.

SEMLEP support has equipped us to grow. It’s allowed us to open up to a different sector of customer. For us, that’s key. Lawrence Archard, Founder –  Factoree

What it did was give us the confidence and strength to develop and grow our business when a lot of people were hiding under a rock. Simon Hollis, Co-Owner – Go Beyond Challenge Ltd

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 South East Midlands LEP have a moderate density of scaleups, and the trend between 2017 and 2020 reveals that few 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: 3 of the 6 local authorities have an above median density of scaleups measured by employment growth and 3 of the 6 local authorities have an above 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: 3 of the 6 local authorities are above the median in terms of improving the density of scaleups by employment in their community and 4 of the 6 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.