Scaleup companies often create the vast majority of the new jobs in economies across the world. This makes policies that successfully support these fast-growing firms critically important.
Ross Brown and Colin Mason of the University of Strathclyde offer suggestions in a report focused on encouraging high-growth entrepreneurship in Scotland. Although they focus on Scottish policies, their conclusions can apply to other countries as well.
According to Brown and Mason, the first step toward implementing any policies to support fast-growing firms is identifying companies that are more likely to achieve high levels of growth.
In targeting high-growth firms through support programs, governments should be:
- More Selective. Significant support currently goes to firms with little growth ambition or potential.
- More Comprehensive. The quality of the support is more important than the quantity of firms the program supports.
- More Focused on Existing Firms. Those with a track record of growth are more likely to continue to succeed.
The authors propose that after target firms are identified, governments should consider incentivizing high-growth rates by awarding grants when companies reach growth milestones. Policymakers can also create initiatives that support projects between companies and potential customers, as many high-growth firms are “highly customer focused.” The researchers note that along with rewarding practices that promote growth, governments should reduce support for start-ups with less potential to increase in size.
To read the report written by Ross Brown and Colin Mason, please click here.
Contributed by Caroline Pringle.