The scale of the opportunity
Think tank: Social Market Foundation
Author(s): John Asthana Gibson
November 8, 2023
This report from UK think tank the Social Market Foundation digs deeper into the characteristics of ‘scale-ups’ and their significant contribution to the British economy.
Building on the findings of a previous SMF report (Full Scale, published in September 2023) investigating the barriers to the expansion of ‘scale-ups’, this briefing digs deeper into the characteristics of ‘scale-ups’ and their significant contribution to the British economy, providing fresh evidence to support our recommendations to encourage scale-up growth.
There are significant barriers hindering the growth of scale-up companies, and removing them would boost productivity and economic growth. This is because scale-ups make an outsized contribution to the UK economy. They make up just 1% of SME firms, but account for 8% of SME employment and 22% of SME turnover. These companies are among the most innovative and productive in the economy, but they are not evenly distributed across sectors or regions. Scale-ups are concentrated in London, with nearly a quarter based in the capital, and are disproportionately concentrated in health and social care and information and communication technology industries. Given the likely benefits, the government should implement a range of reforms to improve scale-up growth and spread clusters of high-growth companies more evenly around the country.
The report’s recommendations include establishing a cross-governmental Scale-ups Unit, charged with coordinating government policy and improving data on scale-up companies; identifying key sectors to prioritise and identify a geographic hub for each sector; as well as reforming immigration rules and investing in skills.