A very small number of high growth firms can have a major significant impact on a regional economy.
In 2015 in the UK 22,500 out of 5.3 million firms created 40% of all new jobs – wow!
It is estimated that the North East has 600 of these “scale-up” firms. We need to identify, encourage and work with firms that are experiencing or want to experience rapid growth (over 20% increase per annum in sales or new jobs).
Does the North East want an exciting and better business future? Do you want an exciting and better business future? These are questions I asked myself after taking part, with a small team from the North East, in a three day scale-up event, in Manchester.
It was led by Dan Isenberg, a leading professor in entrepreneurial ecosystems. We considered what makes a vibrant entrepreneurial ecosystem, and in particular the three C’s: communication, capacity to grow, and cash – communicating the success of growing firms, as success breeds success; capacity to grow in terms of management knowledge and skills; and cash in terms of funding, finance and investment.
It was highlighted that the most important factor in triggering growth is the desire and motivation to grow. Has the North East got enough entrepreneurs with real growth ambition?
What came across powerfully was that creating more start-ups is not the sole answer to generating a more vibrant economy. There is a clear distinction between being an entrepreneur and being self-employed. In the North East we may have lost sight of this distinction. There is a need to make a policy shift to put more emphasis on scale-ups.
The North East LEP is facilitating a follow-up to this event and is working with local business people and academics to gauge a way forward. I can’t wait to find out more and I believe more is on the way from the North East LEP. The future is definitely scale-ups.
A scale-up is an entrepreneurial business that wants to grow fast and profitably. Are you such a business?
Roy Stanley, North East Entrepreneur