Given the longevity and success of Henry Mintzberg’s Strategy Safari (2002) perhaps it’s not surprising that researchers and policymakers have broken cover to explore the savannah in search of entrepreneurship. More specifically, they are looking for the small firms that grow into medium-sized firms and create the much needed economic development and those all important new jobs? We aren’t talking about the few big corporates (ponderous elephants) or numerous small companies (cheeky meerkats) but the few high growth start-ups that create new jobs – the Gazelles.
In the UK, Nesta reported on ‘The vital 6 per cent‘ in October 2009 suggesting that the 6% of UK businesses with the highest growth rates generated 50% of the new jobs. In the US, the Kaufman Foundation highlighted the importance of these gazelles in their ‘High Growth Firms and the Future of the America Economy‘ report in March 2010 and then widely reported elsewhere – BusinessWeek and The Economist. Put simply, gazelles are just the top 1% of new businesses that create 40% of the new jobs (in the US that’s 88 per year) compared to the average of only 2 to 3 new jobs.
This is all very well but what are policy implications of this? The most obvious one is – focus initiatives at these gazelles rather than all small businesses. The problem is how do you spot and then nurture them? Just like the real things they are well camouflaged and hard to find!
Two UK initiatives that attempt to do this leap to mind:
- The Goldman Sachs’ 10,000 Small Businesses initiative
- The Winning Pitch’s Growth Accelerator
But doing is not the same as understanding. Thankfully, we just about to start an ESRC-funded research project investigating how high growth entrepreneurs grow their business by looking at entrepreneurial cognition (gazelle thinking). The research team led by Professor Lynn Martin and Dr Clare Schofield at the Centre for Enterprise at Manchester Metropolitan University with myself from Leeds University Business School.
The project entitled ‘Sharing and building university and business perspectives of how to enable high growth in small firms’ will shed new light on how to support high growth SME owner-managers. Project partners are Northwest company, Winning Pitch, which supports ambitious SME owner-managers though growth coaching and recently won the contract for the BIS-funded Business Accelerator programme for the North of England.
So, it looks like I’m off on safari …
Professor Nigel Lockett FRSA
Professor of Enterprise at Leeds University Business School