28 March 2012
Suzanne Mawson, University of Strathclyde
Dr. Ross Brown, Scottish Enterprise

• Scottish Enterprise research on high growth firms
• High growth firms in the Scottish context
• Current business growth policy and SE interventions
• Research Findings
• HGF growth process
• Role of trigger points in the growth process
• Policy implications

• High growth firms have risen up the policy agenda in
Scotland
• Ongoing Scottish Enterprise programme of inter-linked research on HGFs
• Outputs to date:
1. High Growth Firms in Scotland
2. High-Tech, High Growth Firms in Scotland
3. Enablers of high growth – the role of customer value

• Identified around 1500 HGFs in Scotland; 13.5% of the 10+ employee business base (using OECD turnover criteria)
• Cover most sectors, particularly services
• Older and larger companies – few true “gazelles” (Acs et al.,
2008)
• Firms are predominantly B2B rather than B2C
• Strong focus on end-user engagement

• Focus on young firms (sometimes pre-revenue) with a new technology
• Focus on smaller firms (those with the opportunity to grow and become “companies of scale”)
• Focus on technology (and related sectors e.g. Life sciences, computer games and “enabling technologies”)
• Interventions are generic and reactive to firm needs – financial support, general R&D assistance
• In common with much support for HGFs, strong focus on
R&D support (OECD, 2010)

• Segmented approach, working with 2000 firms with the greatest potential for growth
• High Growth Start-Up Unit to support firms with growth potential in the earliest stages of growth
• However, most support for these firms is generic rather than bespoke
• Transactional (R&D grants, soft loans etc) forms of support dominant rather than relational (strategic advice, peer support etc.)
• The majority of support is provided either before or after a time of high growth

• Growth is not linear and predictable as per traditional lifecycle models of growth (e.g. Churchill & Lewis, 1983;
Greiner, 1972), but rather unstable and inconsistent (Levie &
Lichtenstein, 2010)
• Most HGFs appear to have a “stepped” growth pattern – periods of low / modest growth punctuated with periods of high growth (Garnsey et al., 2006)
• These periods of growth often result from an identifiable
“trigger point”
• Trigger points are a new way of understanding business growth

• A growth trigger is “a systemic change to the structure and workings of a firm which provides a critical opportunity for altering that firm’s growth trajectory” (Brown & Mawson, forthcoming)
• Triggers reconfigure a company, providing the catalyst for it to undertake a period of rapid, transformative growth
• Triggers can catapult moderately performing businesses or
“trundlers ” into a high performing businesses or “ flyers ”
(Storey, 1994)

Endogenous Exogenous Co-Determined
New product/service offering Technological development Entry into a joint venture
Change in company ownership (e.g. MBO, MBI, employee-share ownership)
Acquisition of another firm
Government regulatory issues
Macroeconomic changes
Change in management or
Board personnel
Development of a new production process
Implementation of new management systems
Changes to public policy
Access to public sector assistance (e.g. R&D or capital expenditure grants)
Product failure in the marketplace
Acquisition by another firm
Major new capital investment
Adoption (or adaptation) of new business models
Injection of risk capital or new bank funding
Receipt of a major contract or obtaining a new customer

Source: Brown and Mawson (Forthcoming)

• Previous policy support for HGFs has (largely) been around transactional forms of assistance common to most SME support (see
OECD, 2010)
• Policy makers may have been guilty of ‘looking in the wrong places’ for
HGFs (Mason and Brown, forthcoming)
• Many are not technology-intensive businesses - but they are highly innovative
• Newer more customised forms of support are now required
• Supporting high growth entrepreneurship is not the same as supporting new venture creation
• Need to focus on existing businesses as main source of future HGFs
(Acs et al, 2008; Brown and Mason, 2012)

• Interventions for existing businesses may differ from support currently targeted a new ventures
• No longer just an issue of how to support HGFs, but rather when
• There needs to be a temporal element in business support - how can interventions for HGFs be best sequenced
• Support when a firm experiences a growth trigger
• Newer forms of support around assistance with MBOs etc.
• Comprehensive support during the post-trigger transition phase
• E.g. Scottish Enterprise’s “Companies of Scale” programme
• CofS works intensively with companies to help companies better understand and help navigate the growth journey

Acs, Z. J., Parsons, W. and Tracy, S. (2008), “High-Impact Firms: Gazelles Revisited”, Office of Advocacy of the US
Small Business Administration (SBA), Washington, DC.
Brown, R. C. and Mason, C. (2012), “Raising the Batting Average: Re-Orientating Regional Industrial Policy to Generate
More High Growth Firms”, Local Economy, Vol. 27 1. pp. 33-49.
Brown, R. and Mawson, S. (Forthcoming), “Trigger Points and High Growth Firms: A Conceptualisation and Review of
Public Policy Implications”, Journal of Small Business and Enterprise Development.
Churchill, N.C. and Lewis, V.L. (1983), “The Five Stages of Small Business Growth”, Harvard Business Review, Vol. 61
No. 3, pp. 30-50.
Garnsey, E., Stam, E. and Heffernan, P. (2006), “New firm growth: Exploring processes and paths”, Industry and
Innovation, Vol. 13 No. 1, pp. 1-20.
Greiner, L.E. (1972), “Evolution and revolution as organizations grow”, Harvard Business Review, Vol. 50 No. 4, pp. 37-
46.
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Approach to Entrepreneurship”, Entrepreneurship Theory and Practice, Vol. 34 No. 2, pp. 317-350.
Mason, C. and Brown, R. C. (2012), “Creating good public policy to support high growth firms”, Small Business
Economics , (forthcoming).
OECD (2010), High-growth enterprises: What governments can do to make a difference , OECD studies on SMEs and entrepreneurship, Organisation for Economic Cooperation and Development (OECD), Paris.