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Growth businesses in Scotland 2016-20


This is an update to previous research which considered growth businesses in Scotland from 2011-16. This continues to look further into growth than simply applying the usual ‘high-growth’ definition and maintain the inclusion of the concept of ‘sustained’ growth, across turnover data from 2011-16. The intention of the research was to update the previous evidence and assess any changes to the key messages found in the original research. The principal finding which emerged was the prevalence of growth ‘bottlenecks’ in Scotland. These bottlenecks were in a) Achieving one year medium or high growth. Only 7% of companies in Scotland achieved and sustained any form of 10%+ turnover growth against 26% in rUK. And b) Sustaining growth, especially sustained high growth. 14% of all growth companies achieved further higher growth compared to 37% in rUK. Only 3% of all £1m-£70m companies in Scotland sustained high-growth, vs 18% in rUK. These appeared, when from comparing this analysis with other research (such as investigating trends in MSBs over the last decade), to be long-standing challenges in the Scottish economy. This analysis contributed to establishing a narrative around growth in the economy: "High growth is most common in smaller, younger companies (of less than £4m in turnover). The bottlenecks emerge among £5m-£10m companies which means Scotland has a greater percentage of its growth companies with turnover under £5m compared to rUK, and a lower proportion in every subsequent bracket. This suggests that despite having a strong entrepreneurial and startup system there is an inability to sustain high-growth performance. The ultimate consequence of this are fewer Scottish MSBs than achieved elsewhere."


The method used was exactly as before. Companies House turnover data was used, within criteria, cleansed and analysed.


The principal finding is that the gap between Scotland and rUK has closed significantly, as more businesses achieve sustained high growth in Scotland. However, a gap remains. Scotland continues to be better in early-stage growth but still tails off in comparison to rUK from £5m onwards – although this is slowly changing. Still too many businesses are not achieving or sustaining growth - which remains the key challenge. Up to 20 years trading is when businesses are more likely to achieve and sustain growth. Amongst businesses trading for more than 20 years, higher and more sustained growth is more common amongst older businesses (emerging from 70+ years trading and peaking at those over 100 years). Many sectors with a greater share of growth businesses have the line of best growth fit, with their highest percentages seen in the higher and more sustained rates of growth – Financial & Business Services, Technology & Engineering, Energy (including renewables), and Professional, Scientific and Technical. However, some of the more frequently found sectors with growth businesses appear to be split, with the similar percentages achieving the higher and more sustained growth, as well as the lower and unsustained growth levels. The geographic composition of Scotland’s growth businesses confirms previous research which indicated that the major cities and urban areas performed better, but within them, City of Edinburgh and its region is seeing growth accelerate more than elsewhere. Edinburgh and the South-East has been the principal driver of higher and more sustained growth across Scotland. Glasgow City Region has the second highest percentage in all growth categories but sees more among lower and unsustained growth than in higher, more sustained categories. Aberdeen City and Shire sees strong levels of high growth, which corroborated by the performance in the Energy sector, indicates the region has rebounded from the severe downturn seen in the 2011-16 figures.


There were no recommendations made. The research, its findings and implications are presented to assist policymakers.

Author Scottish Enterprise
Published Year 2021
Report Type Research
  • Sectors
    Chemical sciences, Construction, Digital markets and enabling technologies, Energy, Food and drink, Financial and business services, Forest industries, Life Sciences, Textiles, Tourism
  • Enterprise
    High growth entrepreneurship