In November 2014, the UK government received the independent Scale-up Report on UK Economic Growth that discussed the occurrence of a “scale-up gap” in Britain’s economy. Reason enough for NACUE to take a closer look at this report, to see what we can learn from it.
According to the report, scale-ups are companies that drive productivity, economic growth, and job creation in the long term for a nation’s economy. It is important to note that scale-ups are different from start-ups. Scale-ups emerge from start-ups once they solve the initial challenges that a start-up faces, such as market research, building a client base and product development.
The “scale-up gap” occurs when a UK company struggles to grow and larger foreign firms take over this firm at a significant discount to their potential. So why is it important to close the scale-up gap? Closing the scale-up gap can be a crucial part in driving productivity growth and ultimately raises the overall performance of the UK economy. In other words, the scale-up gap reduces the UK’s long-term competitive advantage because it is linked to productivity. Closing that gap will consequently boost the UK’s productivity and long-term competitive advantage. As a result, a place where both scale-ups and startups can flourish together will potentially result in jobs growth and economic growth per capita.
Here at NACUE, as a network that is devoted to supporting, creating, and advocating for student entrepreneurs, we strongly believe that closing the scale-up gap will help provide the building blocks for startups to eventually succeed and reach the level of scale-up. That is why the time to support these entrepreneurial societies is now. The success of scale-ups is paramount to the growth of the UK’s economy.
Although there are many challenges of scaling, it is imperative for collaboration to occur in order to push this agenda of “scaling-up” business forward. At NACUE, we identified this need for cross-collaboration and so regularly host events and advisory boards which bring together student entrepreneurs from a number of different institutions.
The best way for scale-ups to become an efficient entity relies solely on group efforts, with all the factors contributing to the core of its purpose. Therefore, perhaps the most valuable asset for scale-ups is the necessity of further collaboration with other businesses in times of need, accompanied by direct governmental action and involvement with scale-ups.
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