This report looks at the vital role fast-growth businesses will play in UK economic recovery, and outlines some key priorities for policymakers.
- Just 6 per cent of high growth companies generated half of the UK's employment growth between 2002 and 2008.
- In order to support and encourage more high-growth firms, economic policy should focus on the following:
- Removing the obstacles to growth, such as excessive regulation of highly skilled immigrants and land use in dynamic clusters.
- Ensuring access to finance for growing businesses, especially venture capital and expansion capital, which are particularly important for growing businesses.
- Investing in a skilled and creative workforce.
- Using research and university funding, and planning policy, to encourage strong and wide ranging networks between researchers and businesses that encourage the flow of knowledge and information.
- Harnessing government procurement to provide a market for innovative offerings from business.
The uncertain recovery has put economic growth at the top of the political agenda. And in particular, high-growth businesses have become big economic news.
NESTA’s 2009 report, ‘The Vital 6 per cent’, highlighted that just 6 per cent of fast-growing UK businesses generated the lion’s share of employment growth in the UK between 2002 and 2008. These businesses can be found across all sectors, and they span established firms and start-ups, small businesses and large organisations.
This finding has attracted the attention of policymakers and commentators, and has become an important part of the debate on economic growth in the UK.
This new summary argues that high-growth businesses remain vital to the economy, despite the recession, and that the government’s policy for fostering economic growth needs to have high-growth businesses and their particular needs at its heart.