Back growth firms – not just trendy start-ups MPs told
BUSINESS leaders will this week warn politicians they need to support growing firms and not focus only on fashionable start-ups.
The call will come at the second Future of Growth summit from campaigns firm Seven Hills, with demands for a focus on existing firms from the Confederation of British Industry and business bosses.
A report by investor and entrepreneur Sherry Coutu identifies ‘scaleups’ as key to growth – firms with more than ten staff and annual growth of 20 per cent or more, such as London-based Brompton Bicycle. She said that if the number of such firms could be boosted by just 1 per cent, it would create 238,000 jobs and add £38billion to the economy within three years.
John Cridland, director-general of the CBI, who has long called for a greater focus on medium-sized firms, will also be speaking at the debate, as will Lord Young, David Cameron’s enterprise adviser.
Cridland, who said last month he was stepping down after five years leading the CBI, is expected to renew calls for support for a UK ‘Mittelstand’ – modelled on Germany’s thriving base of medium-sized firms – to boost jobs and the economy.
He said: ‘If small businesses are the backbone of the economy, fast-growing scale-up firms are the muscle to power it. They need confidence and
capital to go from strength to strength. Schemes such as the Business Growth Service and UK Trade & Investment’s export support are helping, and must be developed further. We also need more finance options.’
Sarah Wood is one of the bosses attending on Wednesday. She considers the company she co-founded, advertising technology firm Unruly, a scale-up and said: ‘The UK is a great place to do business, but we are left behind the US in the extent to which our companies scale up.’
Start-ups attract a disproportionate level of support, critics argue. Venture capital into London’s tech start-ups more than doubled in 2014, the capital’s investment promotion firm London & Partners has said. Lloyds has announced it will help 1,000 start-ups pass the £1 million turnover barrier by their third birthday, in its new 2015 Small and Medium-sized Enterprise Charter.
Meanwhile, the Forum of Private Business launched its manifesto for small business last week.
It highlighted the importance of establishing a regulator and code of conduct to govern the relationship between suppliers and retailers. It also called for an EU directive on late payment to be heeded and called for a freeze in business rates.