Explore the ScaleUp Annual Review 2023

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Corporate collaboration checklist

Eight in ten of scaleups primarily sell to other businesses or government (B2B), with large corporates representing their largest client base. However only three in ten are selling to or supplying national government with a similar proportion to local government entities.  When analysing the procurement activity of government with our visible scaleup population we see that 978 visible scaling businesses won at least one government contract in 2022, however they continue to represent a small proportion of the contracts awarded (see the ScaleUp Procurement Index 2023 for more details). 

Scaleups are focused on building these key marketplaces though and there is considerable appetite to do much more – scaleups want to double their sales to Government over coming years. 4 in 10 want to sell more to large corporates.

Despite this, there remains too much friction in the system which needs addressing, over recent years scaleup leaders have consistently cited complex procurement processes, the time it takes to win a contract and finding opportunities to bid for as considerable barriers to working both with Government and corporates. 

Being able to access key decision makers and having an account management structure would go some way to alleviating these challenges, with many scaleups also believing that large corporates and government bodies should have dedicated resources and funds for working with high growth innovative businesses like theirs. 5 in 10 scaleups want to have the opportunity to “meet the buyer” and showcase their goods and services and 4 in 10 want clearer guidance on how to become prime contractors. 

There remains much to do but large corporates and government at all levels can adopt a range of tools and adapt their processes to ease this friction.

Ten Key Dos for Collaborating with Scaleups: 

  1. Create a dedicated Open Innovation Unit with direct reporting to the CEO, CIO or Chief Digital Officer.
  2. Run some form of Accelerator or Hub.
  3. Implement a fast-track procurement process.
  4. Offer co-working spaces.
  5. Use competition tools.
  6. Share resources for free.
  7. Fund proof-of-concept and co-development programmes.
  8. Use challenge-based approaches to solve specific problems, more usually framed as a tightly-specified goal rather than a broad area of interest. 
  9. Connect businesses with end-user customers to enable them to test, improve and promote their goods and services. 
  10. Build internal entrepreneurship schemes into an open innovation process; these include creating spinouts, generating new ideas for exploitation and providing opportunities for talented staff to remain within the organisation.

Features of a Fast-track Procurement Process: 

  1. Reduce the time taken to register as a new supplier (fewer than two weeks).
  2. Pay suppliers promptly (always within three months and in some cases within one week).
  3. Avoid asking for ISO certification or financial indemnities because of the burdens these impose.
  4. Establish dedicated legal teams or fast-track processes for start-ups and early stage growth companies, potentially including template agreements, tailored due diligence processes and technical upskilling programmes.
  5. Create mechanisms for scouting firms.
  6. Recognise that most barriers to open innovation are internal and work to find a balance between corporate culture and short-termism in decision-making.