The number of high-growth firms (HGFs) in the UK has reached nearly 12,000 for the first time since the dotcom boom, according to Enterprise Research Centre (ERC).
London continues to have the largest number of HGFs among the English Local Enterprise Partnership (LEP) areas, but since the financial crisis, their growth has been far outpaced by those outside of the capital.
Excluding the capital, between 2009-2012 and 2012-2015, England saw a 36% rise in the number of high-growth firms, compared with London’s growth of 15%. In Scotland, the number rose slightly slower at 35% and Wales recorded growth of 38%.
The OECD defines a high-growth firms as a company with 10 or more employees, with annual average employment growth of 20% over a three-year period.
Liverpool has the highest proportion of HGFs outside the capital with 8.5% of all companies with 10 or more employees classified as high-growth, having reported growth of 56%
Despite considerable growth, this wasn’t the highest figure. The West of England LEP, which covers Bristol and Bath, saw the number of HGFs rise 62%, while Solent – covering Southampton and Portsmouth – reported increases of 64%.
Professor Mark Hart, deputy director of the Enterprise Research Centre, said: “The number of HGFs in the UK is now at its highest level in well over a decade and it’s particularly notable that both urban and rural parts of the English regions are seeing much more rapid rises in such firms than London.
“These are exactly the sort of firms we need more of in our economy, because they create a huge proportion of overall jobs relative to their small size in the business population.
“Some Local Enterprise Partnership areas appear to be creating the right environment in the recovery period for the emergence of more HGFs. We need to learn the lessons of what’s working to support fast-growing businesses in these areas so we can replicate it more widely.”
Irene Graham, CEO of the Scale-Up Institute, who was named in the top 50 most influential people in entrepreneurship on the Smith & Williamson Power 100, said: “Scaling businesses are vital to our local economies, driving jobs, productivity and opportunity. Supporting these high growth firms in their expansion is crucial. Our large corporates, financiers, universities, local authorities, advisors, and LEPs all have critical roles to play in leaning in to support scaling firms.
“We have a tremendous opportunity. Let’s make sure we are developing the skills, fostering the talent, and creating the international connections to enable the UK’s high growth firms to realise their fullest potential.”