Tracking the performance of high growth entrepreneurs

Existing evidence suggests that despite the provision of a high volume of free or low-cost support for entrepreneurs, the performance of Scottish high growth firms (HGFs) continues to lag behind that of other areas in the UK in terms of competiveness. The report aimed to explore this issue by generating a deeper understanding of Scottish entrepreneurial ecosystem dynamics and HGF behaviour.

The qualitative research methodology consisted of 18 semi-structured interviews with growing business owners based in and operating from Scotland, carried out over the period July-August 2016. Off the record interviews were also conducted with five policymakers, five business angels, and several academics. Analysis focused on three key themes: growth mindset; ecosystem engagement; and HGF activities.

In terms of growth mindset, three categories of HGF were identified: high growth aspiration firms; plateaued growth aspiration firms; and lifestyle constrained aspiration growth firms. The report notes that existing research has identified that only companies who combine high growth aspiration with an international outlook and innovation capabilities are likely to attain significant high growth, and suggests that as only a small number of the companies involved in the research displayed these qualities, questions could be raised around the allocation of support for those with lower growth aspirations. However, specific examples of how companies can move from low to high aspiration given the right conditions and support were identified. With regards to ecosystem engagement, three broad approaches were identified: non-strategic engagement; strategic engagement; and strategic non-engagement. The research located over 170 organisations providing support to HGFs. It is suggested that this volume of provision sometimes leads to navigational issues and information overload for HGFs, and that this can result in them disengaging with the ecosystem. It is also suggested that the system was not felt to be reactive enough to those entrepreneurs whose needs were out of sync with the available ecosystem support. The report suggests that the primary issue in Scotland is not the volume or quality of support available, but rather a need to more closely link the supply and demand of support. It is noted, however, that the majority of firms interviewed were happy with the support available to HGFs in Scotland, particularly in terms of the breadth and depth available and the quality.

The report makes several recommendations, including that: Scottish Enterprise (SE) and its partners should track the behaviour of entrepreneurs at increased levels of granularity in order to maximise the impact of the ecosystem; there should be a single, prominent landing page on SE’s website which allows companies to navigate the public support available to them according to their characteristics and intentions; and app-based technology should be used for in-the-moment interventions that provide rapid feedback and tailored support to growth entrepreneurs.