Stimulating UK Economic Growth

Charlotte Keenan, head of our Office of Corporate Engagement in EMEA, discusses the importance of the UK’s Local Enterprise Partnership (LEP) Network in helping to build a thriving economic ecosystem for small businesses.  

High-growth small businesses are an essential driver of growth; they are the engine of the UK economy. Small businesses account for 60% of all private sector jobs and £1.75 trillion of revenue and so it is vital that we help these ambitious, growth businesses to grow and to scale.  

However, it was not long ago that the conversation on small business support looked very different. If we think back a few years, the business support agenda in government, the media and in business almost exclusively focused on start-ups and through years of investment, incubators, and launchpads, the UK had become the one of the best places in the world to start a business. But it was lagging far behind our peers in how to scale one.

Recognizing this huge gap in support for businesses at the next stage of growth, Goldman Sachs brought the 10,000 Small Businesses programme to the UK to help to play our part in growing and supporting the UK’s small businesses. Through a comprehensive, applied business education targeted at founders and CEOs, we sought to bring about further growth in the UK’s most promising small businesses. The impact has been remarkable. Graduates of the programme are growing their staff at 30% and increasing revenue at 80% per year. They are three times more likely to be creating jobs and two times more likely to be growing revenue than other UK small businesses. These businesses are driving forward the UK economy across every sector and in every region.

In 2011, we saw the LEP network come into existence, and quickly realized this network would be vital in bringing about further business growth given their local knowledge and expertise. By giving the power to local entrepreneurs and policy makers to make the best decisions, LEPs have become core bodies of highly-specific knowledge – the on-the-ground presence needed to boost Britain’s scaling businesses. In 2014, a game changing report was published; the ScaleUp Report further confirmed the fact that while the UK was one of the best places in the world to start a business, we were lagging behind the US and other leading economies in how we scale companies.  

Combined with our own research, and data gathered over a number of years of working with small businesses across the UK, we realised there was an opportunity to do more. Based on the credibility and success seen with the 10,000 Small Businesses programme and the extraordinary stories of change we had heard, we expanded our UK commitment in two ways: first, having run our programmes locally for the previous 5 years, we decided to consolidate across all regions, and working with existing university partners, together with the Oxford University Saïd Business School, we broadened the programme to the national stage, responding to demand and allowing businesses to participate from every part of the country, through an innovative, local and national, online and in-person learning model. Second, we became the founding partner of the ScaleUp Institute, the organization born out of the Scale Up report, and together brainstormed how best to share our learnings and best practice across the country with the goal of supporting more high growth small businesses.  

From those conversations came our training programme for LEP leaders, delivered through two “Driving Economic Growth” courses in 2016. We brought together key stakeholders and decision-makers from 31 LEPs throughout the year to give them the tools and skills to better support high growth small businesses in their LEPs.  We hope to work with the remaining LEPs this year. Participants presented their ideas for scale-up programmes at the end of the course, and took immediate steps in the following months to set up their scale-up initiatives.

There are some strong examples of the wide-spread activity going on across the country: in Manchester, the LEP has launched “Greater Connected”, a growth programme for leaders of digital, creative and technological small businesses looking to explore new markets. In the North-East, the LEP has been working with Entrepreneurs Forum’s “Leadership Academy” to build scale up leadership capacity. In Oxfordshire, a dedicated support team has been established to provide business advice to scale-ups. And in the Tees Valley, two programmes have been established to address the talent and leadership gaps specifically in scale-up businesses. We are also encouraged to see a number of LEPs/growth hubs putting in place ScaleUp 'champions/account managers' such as in Cambridge, the West of England, Swindon and Wiltshire. These examples have gone from being the exception to the norm. We have heard dozens of inspiring stories of LEPs building a stronger business environment and beginning to empower growth at its source: the local small business owner.

Of course, there is still work to be done. With its latest industrial strategy, the government has set us the challenge of providing more support for the UK’s small businesses. First and foremost, Goldman Sachs will continue to deliver 10,000 Small Businesses - a crucial educational resource - for hundreds more entrepreneurs. Second, having met and listened to feedback from LEP leaders across the country, we recognize the need to share the lessons from our own programmes more broadly.   We will support LEPs as they expand their work, sharing our evidence-supported lessons for how best to build business development programmes that are measurable, additive and cost-effective, with the aim of supporting even more UK entrepreneurs. We will work with these emergent local programmes to bring business owners onto the next stage of their journey through 10,000 Small Businesses.  Third, we will work with government and other partners, through the ScaleUp taskforce, to advocate for and support, and help deliver this core part of the Industrial Strategy.

Ultimately, Goldman Sachs is committed to continuing what we have done since the beginning of this journey: supporting individual, ambitious small business owners as they pursue their dreams through innovative, world-leading small businesses. Our commitment is strong and we intend to stand alongside small businesses even as Britain goes through a period of broader change.