National innovation strategy: scorecard - 2024 update

7. High Growth Businesses (Businesses with Average Annualised Employee Count Growth Greater than 20% per Annum over a Three-year Period)

7.1 Ecosystem

• Commercialise

7.2 Performance Assessment

• Performance Improving

7.3 Description

• Evidence shows high growth companies generate a disproportionate number of jobs and innovations. A measure of the percentage of Scottish businesses that are considered “High Growth” can therefore be an indicative of the health of the innovation ecosystem.
• As per the definition used in the Office for National Statistics (ONS) Business Demography statistical release, high growth businesses have average annualised employee count growth greater than 20% per annum over a three-year period. This business count is then taken as a percentage of all active Scottish businesses with more than 10 employees.
• Performance assessment threshold is +/-0.1 pp as per National Performance Framework (NPF).

7.4 Time Series

• The share of “High Growth” businesses in Scotland has been on a downward trend from 2018 to 2021. The number of “High Growth” firms rose in 2022 – with similar trends seen across all 12 UK regions.

7.5 Current Performance

• 3.2% of Scottish businesses recorded as “High Growth” businesses in 2022.
• The proportion of businesses with average annualised employee count growth greater than 20% per annum over a three-year period increased by 0.2 pp in 2022.

7.6 Previous Year Performance

• In 2021, 3.0% of Scottish businesses were identified as “High Growth” businesses.
• The number of “High Growth” enterprises in Scotland and in every UK region except North East fell in 2021 on the previous year.

7.7 UK Regional Benchmark

• Scotland ranks 11^th for “High Growth” businesses in the UK.

7.8 International Benchmark

• Using the EU definition of “High Growth” (>10%), Scotland is 24^th amongst the EU27.

7.9 About the Data

• Current Dataset: Office of National Statistics (ONS): Business demography, UK: 2022 (Released 22 November 2023)
• Next Release: 18 November 2024