High-growth firms are the key to future Scottish jobs

RESEARCH funded by Scottish Enterprise has found that intensifying support for fast-growing companies could have a transformational impact on the economy.

It found that 825 firms in Scotland identified as high-growth make up just 4 per cent of the total number but they make a bigger contribution to economic growth, collectively employing almost half a million people.

They also account for around half of all new private-sector employment, leading Scottish Enterprise to believe that increasing their number could help substantially in the creation of jobs.

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The research also highlighted some key findings around the characteristics of a high-growth firm, which could help enterprise agencies offer more tailored support to those with the potential to grow into the large scale companies. It found that they are a highly diverse range of companies and can be found in a wide range of industries, although most were not operating in "high technology" sectors;

They also vary in terms of their origins, size and age but the majority are knowledge-intensive, highly innovative and customer focused, with business models based around long-term relationships with customers;

They tend to have more international operations with an extended overseas presence than other companies and are usually concentrated around Scotland's cities.

Professor Colin Mason of Strathclyde University's Hunter Centre for Entrepreneurship said: "The most remarkable feature of our study of Scottish high-growth firms is their enormous variety. The obvious conclusion for policy makers is not to pre-judge the sources of high-growth firms within the economy, and that eligibility criteria for business support should be kept as open as possible."

The research also highlighted the clear role for government to nourish and support high-growth firms at an early stage of their growth.

While the majority of the companies had received support from the Scottish Government or Scottish Enterprise in the past, only 20 per cent were currently "account managed" by the agency, suggesting that early investment was crucial in helping them get to a stage where they no longer needed public-sector support.

Ross Brown of Scottish Enterprise said: "While there are some clear challenges in helping companies achieve the scale required of a high growth firm, the research underlines the scale of the opportunity and the importance of nurturing those companies that can develop into the big players of the future.

"While not all of the companies we work with will develop into a high-growth firm, if we are to have the biggest impact on Scotland's economy, we need to focus our efforts on those companies that have the ability and appetite to grow."