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Business Growth and Innovation

This report explores the wider impact of rapidly-growing firms in UK city-regions.

This report explores the wider impact of rapidly-growing firms in UK city-regions.

Key findings:

  • Not all businesses have the same impact on the UK’s prosperity. A small minority of high-growth firms does most to boost the economy and employment.
  • High-growth firms contribute to economic performance in several ways. Their wider effects on social and economic outcomes go beyond their own productivity, employment and innovation growth.
  • High-growth firms generate spillovers in their regions, creating jobs over and above their direct effect on employment. They are also major innovators, and innovation drives growth. 
  • This has several implications for policy-makers: to focus on the firms with the potential for significant growth; to target support at firms which have demonstrated some capacity or ambition to grow, regardless of their age; and to encourage innovation, and make sure the necessary finance is available.

Thriving businesses are vital to the UK's economic recovery. Business people, investors and policymakers agree that they create jobs, wealth and wider prosperity.

 

If government is to create the right conditions for businesses to grow, it must understand how this growth happens and what lies behind it.

 

This report examines business growth in UK cities, considering the wider benefits of growth businesses and the relationship between growth and innovation. It demonstrates the importance of innovation to business growth, as well as the considerable socio-economic benefits of high growth businesses.

 

Author
Geoff Mason, Kate Bishop and Catherine Robinson