Growth companies in Scotland

This research was designed to identify the nature and extent of growth across the business base in Scotland. It sought to identify the locations in which companies achieve intermittent and sustained growth, what size these companies grow to, and what sectors they are in. It forms part of a series of research projects in support of the Development and Scaling portfolios.

The methodology consisted of analysis of data from the FAME database, using the following criteria: primary trading and/or registered office in Scotland; 20% turnover growth in at least one year between 2011-16; maximum turnover of £250m; and excluding estimates where no data is available.

The research found that between 2011-16 there were 2394 companies achieving 20% turnover growth once, with Financial & Business Services, Construction and Technology & Engineering the sectors with the most companies achieving this. Across Scotland, 28% of companies who achieved 20% growth in turnover in one year, went to on to achieve it in multiple years. Cities and urban areas were found to have the highest numbers of sustained and intermittent high-growth companies, although their conversion rates are below average. Companies in the £5-£10m turnover bracket are less likely to achieve high-growth and then to sustain it over multiple years. It appears that once companies reach the milestone of £10m+ turnover, the odds of sustaining growth of 20%+ increases. In terms of sectors, Financial & Business Services, and Construction were found to have particular challenges in converting to sustained growth in the £5-£10m turnover range, despite being the two most prevalent sectors across the whole range of growth companies; Technology & Engineering was found to have challenges in sustaining high-growth across every turnover band; Food & Drink, Textiles and Tourism companies also have difficulties, extending across each turnover bracket; and Companies in Food & Drink and Tourism begin to appear in greater numbers compared to other sectors in the 10-20% growth range. The local authority with the greatest number of companies identified as likely to achieve sustained high-growth of 20% (based on achieving 1 year of 20% and 2+ years between 10-20% growth) is West Lothian. The findings indicate that to create more sustained growth companies, a focus on urban areas is likely to yield positive results. The role less urban and more rural areas can play in building more sustained growth companies is also highlighted.

No recommendations were made.