Benefits of high-growth ecosystems in the UK
Alongside ambitious companies, high-growth ecosystems are supported by incubators, accelerators, investors and universities. When a new business is surrounded by a healthy network of resources as well as opportunities for funding and partnerships, it stands a better chance of surviving and growing rapidly. Founders of high-growth businesses may then go on to become angel investors or mentors for seed-stage businesses, leading to circular success in the ecosystem. The UK’s reputation of a strong ecosystem for innovative startups also attracts founders from Europe and beyond, bringing in further entrepreneurs, ideas, jobs and economic benefits.
A major benefit of a high-growth ecosystem is national and regional economic growth. The ecosystem supports businesses to grow quickly with increased revenues. Over 7,500 high-growth businesses in the UK reported turnover of more than £5m in their most recent accounts. Innovative businesses with a secure revenue are also more likely to attract investors, increasing the flow of funding. High-growth tech companies raised £57b in equity investment between 2011 and 2020. Fast-growing startups also have the economic benefits of stimulating local economies, by using office space, offering jobs, making partnerships and providing healthy competition to encourage continual innovation.
A healthy ecosystem allows business to grow quickly, which can help create jobs — sometimes at a faster rate than large established firms. High-growth companies in the tech sector alone currently employ more than 300,000 workers in the UK. Startups usually offer skilled jobs or take on graduates into training programmes, creating more talent in the workforce. High-growth companies launching outside the UK’s current major employment areas, such as London, encourage professionals to move to other regions which stimulates local development. Over the longer term, a strong ecosystem supports the retaining of top talent in the country and may even attract further talent from overseas.
High-growth businesses are usually innovative and look to invest time and funding into new ideas. An ecosystem surrounding young agile businesses can encourage development of cutting-edge technologies and novel products, with means of support such as financial investment, access to costly tools and equipment, access to office space, or simply mentoring and advice. A strong high-growth ecosystem means companies can pave the way to new markets, bringing huge potential value to the economy through positive disruption. New products and services can hugely benefit society, whether that is a pioneering medical technology to treat individuals, or new software that helps another young high-growth business to evolve and expand.