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The number of scale-up businesses in the UK rose to a record 35,510 in 2017, according to the ScaleUp Institute.

Drawn from the most recent Office for National Statistics (ONS) data for 2017, there was a 3.7% rise on 2016 with 1,300 new high-growth businesses.

Defined as a business with turnover growth of over 20% every year for three years, the overall number of scale-ups has grown by 35% over the past five years.

The figures show that scale-ups generated £1.3 trillion in turnover in 2016, up 34% from 2016. In comparison, all small and medium-sized enterprises (SMEs) turnover was £1.9 trillion.

The ScaleUp Institute praised the widespread growth of scale-ups across the country. All Local Enterprise Partnerships (LEPs) and devolved nations are experiencing a growth rate of greater than one additional scale-up per 100,000 people.

Irene Graham, CEO of the ScaleUp Institute said: “Scale-ups are the engine drivers of local economies. They are twice as innovative as large firms, employ twice as many apprentices, are twice as likely to be operating in international markets, and significantly, they create high-quality jobs. On average, scale-ups are 42% more productive than their peers.

“Their aspirations remain high. According to our recent Scaleup Survey, eight out of ten expect to scale again in 2019, generating £1.5bn more in turnover and creating an extra 7,000 jobs.”

Irene Graham added: “It is is encouraging that scaleup numbers are increasing across the UK but it is equally important to note that the rate of growth has slowed from its average annualised rate of 9.3% between 2013 and 2016. The increase in scaleup numbers is driven by having more businesses scaling in turnover, whilst the numbers of those scaling by employment or by both factors has seen a slight decline.

“As this constitutes the first full year of data since the EU referendum of 2016 we will watch closely to see how the decision to leave the EU has affected scaleup confidence, their ability to scale and the ecosystem’s ability to evolve to meet the needs of scaling businesses.”

She said that “large disparities” in scaleup numbers persist at a regional level – the fastest growing regions grow their number of scaleups almost five times faster than the slowest.

“Scale-ups continue to face major challenges on five fronts: gaps in talent and skills, access to markets at home and overseas, opportunities to develop leadership, a need for more funding and a lack of flexible infrastructure,” she concluded.

“This latest data reinforces the need for continued concerted efforts at a local, regional and national level to address scaling challenges so we are able to meet the Brexit headwinds ahead and achieve sustainable scaleup growth.”