A massive shift in focus and thinking is underway globally. It is a recognition that economic growth is not driven by large business or for that matter startups. It is driven by Scale Ups, the OECD describes these businesses as High Growth Firms (HGF). They have a multiplier effect on their community.
Start Ups are important to encourage, yet the failure rate is enormous. Employment rarely rises beyond 3 employees. Large business has a net negative growth in employment internationally. It’s the same in Australia. Neither drives sustainable economic growth at a local level.
In the UK and the US the focus and thinking has shifted to the true economic engine in any economy – the Scale Up (HGF). In November 2014 the Scaling Up Report UK was released. It is a compelling read. In the US, Scale Up America and efforts in Cities have been launched in 2015.
It started with Scale Up Milwaukee in 2013. Professor Daniel Isenberg wrote a great article “Focus Entrepreneurship Policy on Scale-Up, Not Start-Up. Harvard Business Review 2012”. He is a driving force with Scale Up Milwaukee and leads the Entrepreneurship Practice Program at Babson College.
A must read for anyone serious about business growth, and economic growth in their town or city, hot off the press is Town Inc. by Andrew M Davis. The book was released on September 15 and its tagline “Grow your business, Save your town, Leave your legacy”.
If you want your town or city to grow, then like any business you need to stand for something and you need to be different, not like every other town or city. The secret ingredient…you guessed it, focus on Scale Ups. Through Scale Ups you can foster local Start Ups with much greater success.
The book for business growth is Scaling Up by Verne Harnish – it provides a framework for driving accelerated, sustainable growth and high performance. It is not for the faint of heart. Scaling Up a business is much harder than Starting Up a business.
It comes down to building a ecosystem that supports growth all focused at a local level. As Milwaukee says they are fostering a growth obsessed and growth enabled region. Our towns, cities, business and government in Australia need to shift too to genuinely focus on growth and on Scale Ups.