scale up report deck for second home
TRANSCRIPT
17 April 2015
THE SCALE-UP REPORTON UK ECONOMIC GROWTH
Sherry Coutu CBE
#scaleup
http://www.scaleupreport.com
An independent report to the government
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
ENTREPRENEURSHIP
2000
Floated second Start-up
1986
Came to the UK to attend the
London School of Economics
1987
Became a Computer
Programmer
1991
Studied Business at Harvard
1994
Joined my first
‘start-up’
1995
Founded second Start-up
Sherry Coutu CBE < 2000
1997
first ‘startup’ sold
#scaleup
“We want nothing less than to make the UK the technology centre
of Europe. This is the path we need to take to create new jobs,
new growth and new prosperity in every corner of our country.”
George Osborne, Chancellor of the Exchequer
THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE#scaleup
“First mover advantage doesn’t go to the first company that
launches, it goes to the first company that scales.”
Reid Hoffman, co-founder of Linkedin
THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE#scaleup
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
“Whether making better use of the
information out there about which are
our most promising firms, or
coordinating support at a local level, the
report is packed full of straightforward
recommendations that point not only to
how Britain can pay its way in the world
but how it can do so in a way that
enables far more people than now can
build the life they want – that is why
Sherry’s insightful report is so important
and a real clarion call for policy
makers to act."Chuka Umunna MP and
Shadow Secretary for
Business, Innovations and
Skills
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
“This report makes a compelling
case for getting behind the UK’s
high growth ‘scale-ups’ and I hope
all political parties seriously
consider its recommendations.
These firms are already having a
transformational impact, we just
need more of them to grow.
Helping them access the talent
they need, develop their
leadership and access new
markets are the priorities.”
John Cridland,
Director-General
CBI
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
Will Hutton,
Principal of Hertford
College Oxford and Chair
of the Big Innovation
Centre
“Britain confronts a scale-up crisis,
and Sherry Coutu is to be warmly
congratulated on opening up an
issue that has for too long gone
unexplored and unremedied.
If the country is to capitalise on its
strengths and emergent
entrepreneurial culture then it is
vital that we construct the
ecosystem in which more start-ups
and young firms grow to maturity.
We need the debate which I hope
this report will trigger: but we also
need radical action”.
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
“This report is a welcome
contribution in the context of
Greater Manchester’s recent
devolution deal with
Government and will support
us as we look to deliver
targeted business support to
our local high growth firms.”
Mike Blackburn
Chair of Greater Manchester LEP
“Competitive advantage doesn’t go to the nations that focus on
creating companies, it goes to nations that focus on scaling
companies.”
THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE#scaleup
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
Key Findings
http://issuu.com/endeavorglobal1/docs/what_do_the_best_entrepreneurs_want
THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
Achieving additional
economic growth
does
not
require
significant
additional
funds
If coordinated by
local leaders
who
Collaborate
with
business and universities
http://www.scaleupreport.com
Definition
A ‘scale-up’ is an enterprise with average annual
growth in employees or turnover greater than 20 per
cent per annum over a three year period, and with
more than 10 employees at the beginning of the
period
THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE#scaleup
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/254552/13-92-business-population-estimates-2013-stats-release-4.pdf
#scaleup
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
STARTUPS DO NOT CONTRIBUTE TO NATIONAL OUTPUT
Research by the academic David Storey has found that the median
annual sales of a six-year-old firm in the UK are less than £23,000
This research also found that only a small group of start-ups achieve
significant growth in revenues – just one per cent have sales of more
than £1 million six years after they start
1 %It also found that the average new firm, despite the hype that surrounds
startups, made a negligible contribution to British productivity growth.
#scaleup
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
SCALE-UPS ARE THROUGHOUT THE COUNTRY
Find them all here! http://www.scaleupbritain.com
Scale-ups are found in each of the 39 LEP areas
6,659 (75 per cent) are located outside London.
On average a LEP will have approximately 228
scale-ups in their area.
These in turn can be grouped into the Number of
scale-ups companies that employ between
• 10 and 49 employees,
• 50 and 250 employees,
• >250 employees
• Reference Appendix 3 and 4 in hand-outs….
#scaleup
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
The 3 year gross impact of moving 1% of businesses to HGF mode
(244% over 3 years)
Source: RBS Working Paper: Oct 2014 High Growth Firms and the Economy
As a simple illustration of the potential impact of
high-growth firms, RBS undertook an analysis to
determine the economy wide impact of one per
cent of all businesses with over 10 employees
shifting from a stable growth state into high-
growth mode.
This would see the total population of HGFs in
the UK increase from 10,200 (4.6 per cent of
total business population with 10 or more
employees) to 12,440 (5.6 per cent of total
business population with 10 or more employees).
At the end of year three this would result in 2,240
businesses making this shift and the creation of
238,000 jobs and almost £39 billion in additional
turnover.
39 * 20 years = 780 billion before you take
into account productivity effects
£ 768 billion
£ 780 billion
+
http://www.scaleupreport.com
GROSS Impact of closing the scale up gap in 20 years
1,400,000,000,000
THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE#scaleup
NET Impact of closing the scale up gap in 20 years
225,000,000,000
THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE#scaleup
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
100 %
Net New Jobs created in Europe in the past 5 years were from companies less than 5 years old….
THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
THE PACE OF CHANGE IN OUR ECONOMIES IS HIGH AND INCREASING
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
990,000
.
Source: Adzuna
THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
THERE ARE A LARGE NUMBER OF ‘OPEN POSITIONS’
#scaleup
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
1M
Number of new science,
engineering and tech
professionals required in the UK
by 2020 (Royal Society 2014)
5.8M
Number of people forecast to
be needed in the app economy
by 2018 (OECD)
THE SKILLS GAP IS SET TO GET LARGER….
#scaleup
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBETHE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
http://www.scaleupreport.com
#scaleup
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
KEY RECOMMENDATIONS
Recommendation 1:
“National data sets should be made available
so that local public and private organisations
can identify, target and evaluate their support
to scale-up companies, and evaluate their
impact on UK economic growth.”
http://www.scaleupreport.com
#scaleup
Demand the data so that you can have an accurate measure of what is going on
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
KEY RECOMMENDATIONS
Recommendation 4
A Minister should be made responsible for
reversing the scale-up gap by 2025 with
cross-departmental resources allocated,
independent bodies named to monitor and
a task-force appointed to deliver a scale-up
report to the Prime Minister every
November for the next five years.
http://www.scaleupreport.com
#scaleup
Check www.scaleupbritain.com to see how your LEP is doing on scale-ups
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
LEPS ARE BEING TRACKED by REGION… http://www.scaleupbritain.com
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
Scale-ups ARE BEING TRACKED by LEP… http://www.scaleupbritain.com
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
Scale-ups ARE BEING TRACKED by MP… http://www.founders4schools.org.uk/LEPS
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
AND ARE BEING TRACKED LOCALLY… http://www.scaleupbritain.com
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
AND ARE BEING TRACKED by LEP… http://www.founders4schools.org.uk/leps
Julie Deane: Cambridge Satchel Company
Inspired by her children being bullied at school, Julie started up
her own company so she could afford to send her children to
private school
Lucinda Bruce Gardyne from Genius
Foods
Inspired by her child’s
allergy to gluten and her
passion for chemistry,
Lucinda set about creating
a loaf so her eight year old
son Robin, who had a
wheat allergy, could dip
bread soldiers in his boiled
eggs at breakfast.
Kate Ryder from Maven
Maven is the first
telemedicine platform for
women, offering on-
demand video
appointments with health
and wellness providers
including OB/GYNs,
pediatricians, nurse
practitioners,
nutritionists, lactation
consultants, mental
health providers, physical
therapists, and doulas.
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
KEY RECOMMENDATIONS
#scaleup
Do you know the 50
fastest growing
companies in your
Local Area?
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
KEY RECOMMENDATIONS
#scaleup
What resources are
devoted to helping
schools, colleges and
universities engage
with your ‘ fast 50’.
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
Message *
When you (or MPs) speak publicly, the words and phrases you use influence people.
Here I suggest that you use and avoid the following words:
Words to use: growth, growing, achievement, success, sales, customers, scale-up,
becoming big, exporting, global, challenge, markets.
Words and phrases to avoid during the same message:
small business, self-employment, micro-enterprise… “are the pillar of our economy.”
(Comment: Need to distinguish between small business and entrepreneurship:
entrepreneurship is inherently about growth, and only 1-6% of small businesses grow to
even a very modest extent—everywhere in the world).
Have your speech writers (or communications director) ensure that these words are
repeated in different contexts and different media
* Adapted from Dan Isenberg’s advice to Mayors in US cities.
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
LISTEN *….
Does your MP have a monthly breakfast with 6-8 scale-up entrepreneurs in small
groups.
Make sure some of them, not all, are growth driven, not small mom-and-pops. Not the
big ones that are shrinking…
• Scale-up photo on your site.
• Encourage the entrepreneurs to tweet about the meeting.
• Talk about how you can help them with the talent they need to accept more
customer orders so they can create more jobs and economic growth locally (which
you can tax).
• Adapted from Dan Isenberg’s advice to Mayors in US cities.
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
Visit*
Does your school invite at least one scale-up venture a month to speak to current
students? Do they feature scale-ups at career fairs (or do they only invite
accounting firms, law firms and big companies?)
Avoid the “usual suspects.” Photographs, web site recaps, are all good.
Why not use the website http://www.Founders4schools.org.uk to find out?
The advantage here is that these founders are all running businesses with more than
£ 1 million in turnover and that these businesses are growing.
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
Visit*
Does your MP visit at least one scale-up venture a month for 15-20 minutes (or more,
but 15-20 are sufficient to strongly complement the words you use).
Avoid the “usual suspects.” Photographs, web site recaps, are all good.
Why not use the website http://www.Founders4schools.org.uk to help you decide?
The advantage here is that these founders are all running businesses with more than £
1 million in turnover and that these businesses are growing.
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
Celebrate *…
Have one of your staff, or someone in the community, alert your community
continually to wins – big sales, new sales contracts, new stores opening up
and new marketing partners are the top priorities and convey the right
message – growth, growth growth.
If you win an award, call them up, mention it in the press, have your office put
out a press release, invite your local MP for a handshake and a photo.
Do this at your school or university
* Adapted from Dan Isenberg’s advice to Mayors in US cities.
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
Convene *
The number one issue for scale-up entrepreneurs is access to skills (schools &
universities are not producing enough skilled people at the moment).
• Help your schools with that!
the number two issue is help holding together the senior leadership teams to
cope with the practicalities of growing a business from 100 staff to 500 staff in a
year or two.
• encourage the creation / roll-out of initiatives that help scale-ups get people
with the skills they need).
* Adapted from Dan Isenberg’s advice to Mayors in US cities.
|THE SCALE-UP REPORT ON UK ECONOMIC GROWTH Sherry Coutu CBE
Learn more*
• There are some great 3 day exec ed courses available on ‘how to
supercharge your Local Economy’ The best one I know runs 11-13 May
in Boston and there will be representatives from 17 other countries also
studying best practice practical lessons on how to improve the proportion of
scale-ups in their area.
• Start today by visiting some of the websites I mentioned
• http://www.scaleupreport.com (case studies a good resource)
• http://www.scaleupbritain.com (your fast 50)
If you know a teacher, school governor, parent or a student, point them at
• http://www.founders4schools.org.uk/leps so they can get in touch with
your ‘fast 50’ for classroom talks, workshops, career fairs or work
experience…
THE SCALE-UP REPORTON UK ECONOMIC GROWTH
Sherry Coutu CBE
#scaleup
http://www.scaleupreport.com
An independent report to the government