Tracking the Performance of High Growth Entrepreneurs

The Scottish entrepreneurial support ecosystem contains an enviable depth and breadth of free or low-cost support for entrepreneurs. Yet, despite this generous provision, the performance of Scottish HGFs lags other areas of the UK in competitiveness. Our report seeks to explore this issue by generating a deeper understanding of ecosystem dynamics and HGF behaviour. To develop this insight, we spoke to a broad range of HGFs, angel investors and policymakers to identify the issues that should be addressed by key stakeholders in the ecosystem. We examine three key themes in our analysis: growth mindset, ecosystem engagement and HGF activities. Firstly, in terms of growth mindset, we identified three categories of HGF in our study. These were high-growth aspiration firms, plateaued-growth aspiration firms and lifestyle-constrained aspiration growth firms. Prior research by the Enterprise Research Centre suggests that only those with high-growth aspiration coupled with an international outlook and innovation capabilities are likely to attain significant high growth. Only a small number of our research cohort possessed these qualities (for the time being), raising some questions around the allocation of support resources to those with lower growth aspirations. On a more positive note, we identified specific examples of how companies can move from low aspiration to high-aspiration given the right conditions and support. In terms of ecosystem engagement, we identified a range of both positive and negative experiences. Our research counted over 170 different organisations who are providing support to HGFs. Understandably, this volume of support led to navigational issues and information overload that often, unexpectedly, resulted in disengagement with the ecosystem. The system was also not felt to be reactive enough to entrepreneurs whose needs were often out of sync with the ecosystem support on offer. We identified three broad approaches towards ecosystem engagement, with firms falling into either: non-strategic engagement, strategic engagement, or strategic non-engagement categories. Our report suggests that the primary issue in Scotland is not the volume or quality of support on offer, but rather it concerns more closely linking the supply and demand of support. We argue that this demand can be more readily matched by developing a longitudinal, real-time tracking system that provides rich, predictive insight into what is a very dynamic business environment. We propose using an innovative methodology called Ecological Momentary Assessment, to address many of the cognitive biases identified in extant research. This form of sampling, captures temporal dynamics in such a manner that would allow stakeholders to configure ecosystem activities in response to behavioural patterns, hence closing the supply and demand gap. A potentially unique method of positively influencing growth aspiration, would be to implement an Ecological Momentary Intervention system that provides in-the-moment support for entrepreneurs and reinforces existing interventions. This would address the criticism that the ecosystem is not sufficiently responsive for HGFs.